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on Evolutionary Economics |
| By: | Thierry Vignolo |
| Abstract: | This paper investigates imitation and selective matching in reputational games with an outside option. We identify two classes of such games, which are ultimatum and trust games. By selective matching we mean that short-runplayers have the possibility of selecting the long-run player they play against. We find that selective matching (unlike random matching) favors the equilibrium associated to reputation in the ultimatum game but not in the trust game. |
| Keywords: | Reputation; Long-run equilibria; Selective matching; Games with an outside option |
| JEL: | C72 C73 L1 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:eui:euiwps:eco2007/31&r=evo |
| By: | Hitoshi Matsushima (Faculty of Economics, University of Tokyo) |
| Abstract: | This paper incorporates behavioral economics into implementation theory. We use mechanisms that are strictly detail-free. We assume that each agent dislikes telling a white lie when such lying does not serve her/his material interest. We present a permissive result wherein by using just a single detail-free mechanism, any alternative can be uniquely implemented in iterative dominance as long as the agents regard this alternative as being socially desirable. |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:tky:fseres:2007cf523&r=evo |
| By: | Jose Apesteguia; Miguel A. Ballester |
| Abstract: | Extensive field and experimental evidence in a variety of environments show that behavior depends on a reference point. This paper provides an axiomatic characterization of this dependence. We proceed by imposing gradually more structure on both choice correspondences and preference relations, requiring increasingly higher levels of rationality, and freeing the decision-maker from certain types of inconsistencies. The appropriate degree of behavioral structure will depend on the phenomenon that is to be modeled. Lastly, we provide two applications of our work: one to model the status-quo bias, and another to model addictive behavior. |
| Keywords: | Individual rationality, reference-dependence, rationalization, path independence, status-quo bias, addiction, habit formation, LeeX |
| JEL: | A12 B41 D11 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1056&r=evo |