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on Evolutionary Economics |
| By: | Dreber, Anna (Dept. of Economics, Stockholm School of Economics); Ellingsen, Tore (Dept. of Economics, Stockholm School of Economics); Johannesson, Magnus (Dept. of Economics, Stockholm School of Economics); Rand, David (Harvard University) |
| Abstract: | Many previous experiments document that behavior in multi-person settings responds to the name of the game and the labeling of strategies. Usually these studies cannot tell whether frames affect preferences or beliefs. In this Dictator game study, we investigate whether social framing effects are also present when only one of the subjects makes a decision, in which case the frame may only affect preferences. We find that behavior is insensitive to social framing. |
| Keywords: | beliefs; preferences; framing effects; altruism; cooperation |
| JEL: | C70 C91 D64 |
| Date: | 2011–09–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:hastef:0738&r=evo |
| By: | Breitmoser, Yves; Tan, Jonathan H.W. |
| Abstract: | We show and explain how generosity beyond that explainable by social preferences can manifest in bargaining. We analyze an ultimata game with two parties vying to coalesce with a randomly chosen proposer. They simultaneously demand shares of the surplus. The proposer must then make an offer that meets at least one demand, or else the game either continues with a new round or breaks down with all earning zero. Self-interest, altruism, and inequity aversion univocally predict miniscule demands due to inter-party competition; proposers thus obtain the lion's share. We experimentally observe that proposers coalesce with the less demanding party by strategically matching demands, like ultimatum bargaining, but also give non-strategically to the other party, like dictator giving. The observations are incompatible with concave utilities, as implied by social preferences, but are compatible with reference dependent preferences. |
| Keywords: | demand commitment; ultimata bargaining; non-cooperative; laboratory experiment; social preferences; reference dependence |
| JEL: | C78 D72 C72 C91 |
| Date: | 2011–09–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:33613&r=evo |
| By: | Oechssler, Jörg |
| Abstract: | A well—known result from the theory of finitely repeated games states that if the stage game has a unique equilibrium, then there is a unique subgame perfect equilibrium in the finitely repeated game in which the equilibrium of the stage game is being played in every period. Here I show that this result does in general not hold anymore if players have social preferences of the form frequently assumed in the recent literature, for example in the inequity aversion models of Fehr and Schmidt (1999) or Bolton and Ockenfels (2000). In fact, repeating the unique stage game equilibrium may not be a subgame perfect equilibrium at all. |
| Keywords: | social preferences; finitely repeated games; inequity aversion; ERC |
| Date: | 2011–09–22 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0515&r=evo |
| By: | Pablo Brañas-Garza (Universidad de Granada, Spain); Teresa García-Muño (Universidad de Granada, Spain); Roberto Hernán (Economic Science Institute, Chapman University, USA) |
| Abstract: | This paper analyzes cognitive effort in 6 different one-shot p-beauty games. We use both Raven and Cognitive Reflection tests to identify subjects' abilities. We find that the Raven test does not provide any insight on beauty contest game playing but CRT does: subjects with higher scores on this test are more prone to play dominant strategies. |
| Keywords: | Beauty Contest Game, Raven, Cognitive Reflection Test |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:11-08&r=evo |
| By: | Müller, Julia; Schwieren, Christiane |
| Abstract: | The beauty contest game has been used to analyze how many steps of reasoning subjects are able to perform. A common finding is that a majority seem to have low levels of reasoning. We use eye-tracking to investigate not only the number chosen in the game, but also the strategies in use and the numbers contemplated. We can show that not all cases that are seemingly level-1 or level-2 thinking indeed are {they might be highly sophisticated adaptations to beliefs about other people's limited reasoning abilities. |
| Keywords: | beauty contest game; levels of reasoning; level-k model; strategic reason ing; cognitive hierarchy |
| Date: | 2011–09–22 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0516&r=evo |
| By: | Chetan Dave; Stefan Dodds; Sheryl Ball; Rachel Croson |
| Abstract: | A foundational paradox in social choice theory is that liberalism (freedom of action) and Pareto efficiency, the standard in evaluating economic outcomes, can conflict with each other (Sen 1970). We capture this tension in a series of sequential Battle of the Sexes game experiments. We find that most individuals are willing to waive rights to achieve efficient outcomes. In addition efficiency is higher when participants may claim new rights than when they may relinquish them or when only one player possesses them. This evidence may help resolve the tensions between efficiency and liberty that lie at the heart of social choice and political philosophy. |
| Keywords: | Pareto Optimality, Sen’s Paradox, Social Choice, Minimal Liberalism, preferences, rights, Battle of the Sexes game  |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:vpi:wpaper:e07-30&r=evo |
| By: | Andersson, Ola (Research Institute of Industrial Economics (IFN)); Wengström, Erik (Lund University) |
| Abstract: | It is well known that communication often serves as a facilitator for cooperation in static games. Yet, communication can serve entirely different purposes in dynamic settings as communication during the game may work as a means for renegotiation, potentially undermining the credibility of cooperative strategies. To explore this issue, this paper experimentally investigates cooperation and non-binding communication in a two-stage game. More specifically, two treatments are considered: one with only pre-play communication and one where subjects can also communicate intra-play between the stages of the game. The results highlight a nontrivial difference concerning the effects of pre-play communication between the two treatments. Pre-play communication only has a significant impact on cooperation when no intra-play communication is possible. The results suggest that the credibility of pre-play messages may depend crucially on future communication opportunities. |
| Keywords: | Communication; Cooperation; Renegotiation; Experiments |
| JEL: | C72 C92 |
| Date: | 2011–09–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0883&r=evo |
| By: | Kuhn, Peter J. (University of California, Santa Barbara); Villeval, Marie Claire (CNRS, GATE) |
| Abstract: | Are women disproportionately attracted to work environments where cooperation rather than competition is rewarded? This paper reports the results of a real-effort experiment in which participants choose between an individual compensation scheme and a team-based payment scheme. We find that women are more likely than men to select team-based compensation in our baseline treatment, but women and men join teams with equal frequency when we add an efficiency advantage to team production. Using a simple structural discrete choice framework to reconcile these facts, we show that three elements can explain the observed patterns in the team-entry gender gap: (1) a gender gap in confidence in others (i.e. women are less pessimistic about their prospective teammates' relative ability), (2) a greater responsiveness among men to instrumental reasons for joining teams, and (3) a greater "pure" preference for working in a team environment among women. |
| Keywords: | gender, cooperation, self-selection, confidence, experiment |
| JEL: | C91 J16 J24 J31 M5 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5999&r=evo |
| By: | Claude Ménard (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I); Shirley Mary M. (RCI - Ronald Coase Institute - Ronald Coase Institute) |
| Abstract: | Douglass North, along with Ronald Coase and Oliver Williamson, transformed the early intuitions of new institutional economics into powerful conceptual and analytical tools that spawned a robust base of empirical research. NIE arose in response to questions not well explained by standard neoclassical models, such as make or buy and why rich or poor? Today NIE is a success story by many measures: four Nobel laureates in under 20 years, increasing penetration of mainstream journals, and significant impact on major policy debates from anti-trust law to development aid. This paper provides a succinct overview of North's evolving ideas about institutions and explains how North's work shaped the emerging field of new institutional economics and had a potent impact on economics and the social sciences more broadly. North provides a powerful example of how persistent and well placed confidence and hard work can productively transform the status quo. North's influence continues strong and his enthusiasm for exploring new frontiers and cooperating across artificial academic boundaries has never waned. |
| Keywords: | New Institutional Economics, institutions, transaction costs, development and growth |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00624297&r=evo |
| By: | Eva-Maria Steiger (Max Planck Institute of Economics, Jena); Ro'i Zultan |
| Abstract: | Transparency in teams can induce cooperation. We study contribution decisions by agents when previous decisions can be observed. We find that an information chain, in which each agent directly observes only the decision of her immediate predecessor, is at least as effective as a fully-transparent protocol in inducing cooperation under increasing returns to scale. In a comparable social dilemma, the information chain leads to high cooperation both when compared to a non-transparent protocol for early movers, and when compared to a fully-transparent protocol for late movers. we conclude that information chains facilitate cooperation by balancing positive and negative reciprocity. |
| Keywords: | team production, public goods, incentives, externality, information, transparency, conditional cooperation |
| JEL: | C72 C92 D21 J31 M52 |
| Date: | 2011–09–23 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2011-040&r=evo |