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on Evolutionary Economics |
| By: | Markus Dertwinkel-Kalt; Vincent Eulenberg; Christoph Feldhaus; Jonas Frey; Kevin Breuer; Ben Bruske; Flynn Fehre; Penelope Hoffmann; Cederik Höfs; Nico Klocke; Lucas Schnack; Florian Strunk; Moritz Thiele; Annika Walter; Julia Weinberg; Konstantin Zörner |
| Abstract: | In social dilemmas, cooperation failures often arise due to the absence of mechanisms that prevent free-riding and enhance cooperation. Given the critical role these mechanisms play in sustaining cooperation, why are they so frequently missing? To explore this, we conducted an online experiment testing whether individuals choose to implement such cooperation-inducing mechanisms and why they might refrain from doing so. Participants were introduced to the rules of two public goods games, one of which includes a cooperation-inducing mechanism, while the other does not. Regarding the likelihood of successful cooperation, we found that participants were overly optimistic in the absence of the mechanism and overly pessimistic in its presence. As a result, a majority of subjects preferred the game without the cooperation-inducing mechanism. However, when we corrected participants' beliefs about the actual payoffs obtained in the two games, a majority shifted their preference toward the game with the cooperation-inducing mechanisms in place. |
| Keywords: | free riding, equilibrium effects, misspecified beliefs, spectator design |
| JEL: | D90 D01 C91 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11999 |
| By: | Zijian Zark Wang |
| Abstract: | When decision makers evaluate a sequence of rewards, they may pay more attention to larger rewards and, given attention is limited, less attention to smaller rewards. They may also become less attentive to each reward when attention is spread over a longer period of time. Such reductions in attention could lead to greater discounting of the rewards' values. This paper introduces a novel theory of time discounting based on these assumptions. The resulting discount factors in the theory follow a distribution similar to the multinomial logit function. We characterize such discount factors using two approaches: one based on information maximizing exploration and the other based on the optimal discounting framework. The theory can explain a wide range of anomalies, including the hidden-zero effect, S-shaped value function, and intertemporal correlation aversion. Also, it specifies new mediators for some well-known psychological effects, such as the common difference effect, risk aversion over time lotteries, and the present bias. |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2505.13016 |