|
on Evolutionary Economics |
| By: | Kevin He (University of Pennsylvania); Jonathan Libgober (University of Southern California) |
| Abstract: | We extend the indirect evolutionary approach to the selection of (possibly misspecified) models. Agents with different models match in pairs to play a stage game, where models define feasible beliefs about game parameters and about others’ strategies. In equilibrium, each agent adopts the feasible belief that best fits their data and plays optimally given their beliefs. We define the stability of the resident model by comparing its equilibrium payoff with that of the entrant model, and provide conditions under which the correctly specified resident model can only be destabilized by misspecified entrant models that contain multiple feasible beliefs (that is, entrant models that permit inference). We also show that entrants may do well in their matches against the residents only when the entrant population is large, due to the endogeneity of misspecified beliefs. Applications include the selection of demand-elasticity misperception in Cournot duopoly and the emergence of analogy-based reasoning in centipede games. |
| Keywords: | misspecified Bayesian learning, endogenous misspecifications, evolutionary stability, analogy classes |
| Date: | 2025–09–19 |
| URL: | https://d.repec.org/n?u=RePEc:pen:papers:25-020 |
| By: | Roland Bénabou; Luca Henkel |
| Abstract: | We review the economic literature on self-image, which conceptualizes identity as a set of beliefs about one’s core traits, values, goals, and social ties. Self-image concerns lead individuals to process information and make choices in non-standard ways that help affirm and protect certain valued identities. We first present the main cognitive mechanisms involved within a simple unifying framework. We then survey the extensive laboratory, online, and field experimental literature on the nature and behavioral implications of self-image concerns. We discuss in particular how they give rise to information and decision avoidance, motivated memory and beliefs, excuse-driven behavior, preferences for truth-telling, hypothetical bias, moral cleansing and moral licensing, collective identities, political preferences, and other forms of self-signaling or self-deception. We subsequently discuss common empirical strategies used to identify self-image concerns, as well as the threats to their validity and how to alleviate them. We conclude by outlining open questions and directions for future research on the belief-based approach to identity. |
| JEL: | D64 D82 D91 Z13 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34297 |
| By: | Boris Gershman; Tinatin Mumladze |
| Abstract: | Empirical research on culture and institutions in economics often relies on cross-cultural data to examine historical or contemporary variation in traits across ethnolinguistic groups. We argue that this work has not adequately addressed the problem of cultural non-independence due to common ancestry and show how phylogenetic regression, along with newly available global language trees, can be used to directly account for this issue. Our analysis focuses on Murdock's Ethnographic Atlas (EA), a widely used database of preindustrial societies, with broader implications for any cross-cultural study. First, we show that various economic, institutional, and cultural characteristics in the EA exhibit substantial phylogenetic signal - they tend to be more similar among societies with closer ancestral ties. Second, through simulations in a sample resembling the EA, we demonstrate that phylogenetic correlation leads to severe inefficiency of the standard OLS estimator and unacceptably high type I error rates, even when clustered standard errors are used. Phylogenetic generalized least squares (PGLS), exploiting the information on shared ancestry contained in language trees, improves estimation accuracy and enables reliable hypothesis testing. Third, we revisit some of the recently published results in a phylogenetic regression framework. In many specifications, PGLS estimates differ markedly from their OLS counterparts, indicating a smaller magnitude and weaker statistical significance of relevant coefficients. |
| Keywords: | Common ancestry, Cross-cultural analysis, Culture, Cultural non-independence, Ethnographic Atlas, Institutions, Phylogenetic comparative methods |
| JEL: | C10 O10 N30 Z12 Z13 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:amu:wpaper:2025-02 |
| By: | Martínez Martínez, Ismael; Normann, Hans-Theo |
| Abstract: | We analyze infinitely repeated multiplayer prisoner's dilemmas in continuous-time experiments. As the number of players changes, our design keeps the payoffs of the all-defection, all-cooperation, and unilateral- defection and -cooperation outcomes constant, thus controlling for the minimum discount factor required for cooperation to be an equilibrium. For all group sizes, we study three different variants of the prisoner's dilemma. In further treatments, we allow actions to be chosen from a continuous set. We find that cooperation rates decrease with the number of players, a result that we can attribute to the increased strategic uncertainty in larger groups. The different payoff matrices also affect cooperation. For the payoff matrices with lower levels of cooperation, the group-size effect is weaker. The availability of a continuous action set strongly reduces cooperation rates. |
| Keywords: | cooperation, dilemma, experiment |
| JEL: | C72 C73 C92 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:dicedp:327128 |
| By: | Ille, Sebastian; Carrera, Edgar J. Sanchez |
| Abstract: | With the increasing demand for sustainable products, greenwashing has become more prevalent and sophisticated over the past decade. To better understand the incentives for firms to greenwash, we develop an evolutionary game-theoretic model in which firms may choose to mimic green behavior without having to bear the cost linked to green investment and production. We provide the conditions for the different evolutionarily stable equilibria. In a second step, we extend the model using agent-based simulations to incorporate path-dependent investment/production costs, history-dependent mimicry effectiveness, peer effects, and localized firm interactions. We show that the simpler model with random matching offers good approximations of the equilibrium conditions in more complex setups, but market segmentation supports green investment and production in contrast to higher penalties. While curtailing opportunities to pretend green behavior boosts green production, we also find that increasing cost efficiencies encourage firms to engage in green production, even in the face of increasingly sophisticated deceptive strategies. Based on our results, we suggest trio-targeted policies that reduce the (initial) costs of green investment/production, curtail opportunities to mimic green behavior, and support segmentation. |
| Keywords: | climate change; non-linear macroeconomic models; greenwashing; corporate sustainability |
| JEL: | C7 D2 Q5 |
| Date: | 2025–08–03 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126152 |