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on Evolutionary Economics |
| By: | Stephanie Rosenkranz; Utz Weitzel |
| Abstract: | In this paper we characterize a situation in which non-calculative trust has to play a role in the decision to cooperate. We then analyze the given situation in game theoretical terms and distinguish those aspects of players' decisions that are cooperative from those that may be interpreted as being trustful. We argue that the cooperative aspect relates to incentives while the trustful (and thus non-calculative) aspect of the decision is related to the framing of the situation. |
| Keywords: | trust, framing, focal points, alliances, cooperation |
| JEL: | C72 D80 D74 Z13 |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:use:tkiwps:0512&r=evo |
| By: | Eran A. Guse |
| Abstract: | This paper studies a game theoretic model where agents choose between two updating rules to predict a future endogenous variable. Agents rationally choose between these predictors based on relative performance. Conditions for evolutionary stability and stability under learning are found for the Nash solutions and corresponding parameter equilibria. Stability conditions are contingent upon parameter values and the initial distribution of heterogeneity. However, when the cost of using the more advanced updating rule is sufficiently large, all agents will asymptotically use the more parsimonious, or Minimum State Variable (MSV), updating rule. |
| Keywords: | Adaptive Learning; Evolutionary Dynamics; Heterogeneous Expectations; Multiple Equilibria; Rational Expectations. |
| JEL: | C62 D84 E37 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:0547&r=evo |
| By: | Peter Duersch (Department of Economics, University of Heidelberg); Albert Kolb (Department of Economics, University of Bonn); Joerg Oechssler (Department of Economics, University of Heidelberg); Burkhard Schipper (Department of Economics, University of California) |
| Abstract: | We use an experiment to explore how subjects learn to play against computers which are programmed to follow one of a number of standard learning algorithms. The learning theories are (unbeknown to subjects) a best response process, fictitious play, imitation, reinforcement learning, and a trial & error process. We test whether subjects try to influence those algorithms to their advantage in a forward-looking way (strategic teaching). We find that strategic teaching occurs frequently and that all learning algorithms are subject to exploitation with the notable exception of imitation. The experiment was conducted, both, on the internet and in the usual laboratory setting. We find some systematic differences, which however can be traced to the different incentives structures rather than the experimental environment. |
| Keywords: | learning; fictitious play; imitation; reinforcement; trial & error; strategic teaching; Cournot duopoly; experiments; internet. |
| JEL: | C72 C91 C92 D43 L13 |
| Date: | 2005–10–25 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpga:0510012&r=evo |
| By: | Xavier Vilà |
| Abstract: | We analyze the classical Bertrand model when consumers exhibit some strategic behavior in deciding from which seller they will buy. We use two related but different tools. Both consider a probabilistic learning (or evolutionary) mechanism, and in the two of them consumers' behavior in uences the competition between the sellers. The results obtained show that, in general, developing some sort of loyalty is a good strategy for the buyers as it works in their best interest. First, we consider a learning procedure described by a deterministic dynamic system and, using strong simplifying assumptions, we can produce a description of the process behavior. Second, we use nite automata to represent the strategies played by the agents and an adaptive process based on genetic algorithms to simulate the stochastic process of learning. By doing so we can relax some of the strong assumptions used in the rst approach and still obtain the same basic results. It is suggested that the limitations of the rst approach (analytical) provide a good motivation for the second approach (Agent-Based). Indeed, although both approaches address the same problem, the use of Agent-Based computational techniques allows us to relax hypothesis and overcome the limitations of the analytical approach. |
| Keywords: | Agent-Based Computational Economics, Evolutionary Game Theory, Imperfect Competition |
| JEL: | C6 C7 D4 |
| Date: | 2005–10–25 |
| URL: | http://d.repec.org/n?u=RePEc:aub:autbar:654.05&r=evo |
| By: | Brian Loasby |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:esi:evopap:2005-13&r=evo |
| By: | Jose Apestgeguia (Department of Economics, Public University of Navarre. josej.apesteguia@unavarra.es); Steffen Huck (Department of Economics and ELSE, University College London. s.huck@ucl.ac.uk); Jörg Oechssler (Department of Economics, University of Heidelberg. oechssler@uni-hd.de) |
| Abstract: | We introduce a generalized theoretical approach to study imitation and subject it to rigorous experimental testing. In our theoretical analysis we find that the different predictions of previous imitation models are due to different informational assumptions, not to different behavioral rules. It is more important whom one imitates rather than how. In a laboratory experiment we test the different theories by systematically varying information conditions. We find significant effects of seemingly innocent changes in information. Moreover, the generalized imitation model predicts the differences between treatments well. The data provide support for imitation on the individual level, both in terms of choice and in terms of perception. But imitation is not unconditional. Rather individuals' propensity to imitate more successful actions is increasing in payoff differences. |
| Keywords: | Evolutionary game theory; Stochastic stability; Imitation; Cournot markets; Information; Experiments; Simulations |
| JEL: | C72 C91 C92 D43 L13 |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:54&r=evo |
| By: | Pablo Brañas-Garza (Department of Economic Theory and Economic History, University of Granada); Miguel Angel Durán (Department of Economic Theory and Economic History, University of Granada); María Paz Espinosa (Universidad del País Vasco) |
| Abstract: | This paper explores new motivations behind giving. Specifically, it focuses on personal involvement and responsibility to explain why decision makers give positive amounts in dictatorial decisons. The experiment is designed to uncover these motivations. Subjects face the problem of a dictator's allocation of an indivisible pie P to one of two players; indivisibility creates an extremely unequal outcome and the dictator is given a chance to correct this outcome at a cost. The willingness to pay to correct the outcome is examined under different scenarios so that we learn about several features concerning preferences. |
| Keywords: | Fairness, Dictator game, Moral cost. |
| JEL: | C91 D63 D64 |
| Date: | 2005–10–17 |
| URL: | http://d.repec.org/n?u=RePEc:gra:wpaper:05/21&r=evo |
| By: | Matthias Benz |
| Abstract: | This paper aims at showing the relevance of procedural utility for economics: people do not only care about outcomes, as usually assumed in economics, they also value the processes and conditions leading to outcomes. The psychological foundations of procedural utility are outlined and it is discussed how the concept differs from other related approaches in economics, like outcome utility, outcome fairness or intentions. Institutions at the level of society and fair procedures are shown to be sources of procedural utility, and novel empirical evidence on the role of procedural utility in important areas of the economy, polity and society is presented. |
| Keywords: | procedural utility, outcome utility, institutions, procedural fairness, outcome fairness, intentions |
| JEL: | C78 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:zur:iewwpx:256&r=evo |