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on Evolutionary Economics |
| By: | Elaine Liu (University of Houston); Juanjuan Meng (Peking University Guanghua School of Management); Joseph Wang (National Taiwan University) |
| Abstract: | This paper investigates how Confucianism affects individual decision making in Taiwan and in China and whether the Cultural Revolution in China, which denounced Confucian teaching, has had a long-lasting impact. We found that Chinese subjects in our experiments became less accepting of Confucian values, such that they became more risk loving, less loss averse, and more impatient after being primed with Confucianism, whereas Taiwanese subjects became more trustworthy and more patient after being primed by Confucianism. Combining the evidence from the incentivized laboratory experiments and subjective survey measures, we found evidence that Chinese subjects and Taiwanese subjects reacted differently to Confucianism. |
| Keywords: | social norm, Confucianism, time preferences, risk aversion, trust |
| JEL: | C91 Z10 |
| Date: | 2013–07–18 |
| URL: | http://d.repec.org/n?u=RePEc:hou:wpaper:2013-199-49&r=evo |
| By: | Drouvelis, Michalis (University of Birmingham); Powdthavee, Nattavudh (London School of Economics) |
| Abstract: | What determines people's moral judgments of selfish behaviors? Here we study whether people's normative views in trust and gift exchange games, which underlie many situations of economic and social significance, are themselves functions of positive emotions. We used experimental survey methods to investigate people's moral judgments empirically, and explored whether we could influence subsequent judgments by deliberately making some individuals happier. We found that moral judgments of selfish behaviors in the economic context depend strongly on other people's behaviors, but their relationships are significantly moderated by an increase in happiness for the person making the judgment. |
| Keywords: | happiness, moral judgments, trust games, gift exchange games |
| JEL: | C91 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7495&r=evo |
| By: | Holger Herz; Dmitry Taubinsky |
| Abstract: | People's desire for fair transactions can play an important role in negotiations, organizations, and markets. In this paper, we show that markets can also shape what people consider to be a fair transaction. We propose a simple and generally-applicable model of path-dependent fairness preferences, in which past experiences shape preferences, and we experimentally test the model's predictions. We find that previous exposure to competitive pressure substantially and persistently reduces subjects' fairness concerns, making them more likely to accept low offers. Consistent with our theory, we also find that past experience has little effect on subjects' inclinations to treat others unfairly. |
| Keywords: | Social preferences, reference points, fairness, bargaining |
| JEL: | C78 C91 D01 D03 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:zur:econwp:128&r=evo |
| By: | Erik O. Kimbrough (Simon Fraser University); Alexander Vostroknutov (Maastricht University) |
| Abstract: | We study a novel, repeated common pool resource game in which current resource stocks depend on resource extraction in previous periods. Our model shows that for a sufficiently high regrowth rate, there is no commons dilemma: the resource will be preserved indefinitely in equilibrium. Lower growth rates lead to depletion. Laboratory tests of the model indicate that favorable ecological characteristics are necessary but insufficient to encourage effective CPR governance. However, using a method developed in Kimbrough and Vostroknutov (2013), we identify behavioral types ex ante by observing individual willingness to follow a costly rule, and we show that assortative matching on type facilitates CPR management. |
| Keywords: | cooperation, common pool resource game, rule-following, experimental economics. |
| JEL: | C9 C7 D7 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:sfu:sfudps:dp13-06&r=evo |
| By: | Beraldo, Sergio; Filoso, Valerio; Marco, Stimolo |
| Abstract: | Conformity behavior, i.e. the agreement between an individual's choices and the prevailing behavior of a reference group, is a commonly observed phenomenon. Though some types of social interactions may give raise to specific incentives to adopt either a majoritarian or a contrarian behavior, we want to investigate whether the same behavioral pattern emerges even when no economic motivator is present. To accomplish this task, we employ an experimental Vickrey median price auction designed to provide incentives to reveal individual preferences truthfully. Whereas we feed the control group with just the median price, we give out additional information on other players' bids for those in the treated groups. These informations are designed to provide hints at revising individual bids. Our main results point to a strong tendency of the individuals to adapt their behavior to those of the individuals which can be observed. Moreover, although a clear shaping effect (a regression toward the median price) does emerge for the control group, the provision of information about the actual behavior of a sample of the relevant group is able to minimize or neutralize the shaping effect. Specifically, we find that players adjust to a divergence between their bids and the average bid of a reference group by a factor of 47.4\%—87.3\%. These figures point to a relevant role for conformity in group behavior. |
| Keywords: | Endogenous preferences, shaping effect, social conformity, Vickrey auction |
| JEL: | C91 C92 D44 |
| Date: | 2013–07–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:48539&r=evo |
| By: | Daniel Ladley; Ian Wilkinson; Louise Young |
| Abstract: | Cooperative relations, within and between firms, play important roles in business. How to produce such relations, however, is less well understood. Building on work in evolutionary biology we examine the conditions under which group based incentives result in better performance than individual based incentives. We find that when individual and group interests are not aligned, group incentive systems lead to both higher group and individual performance. Hybrid reward systems, with both group and individual components, are found on average to be inferior to pure group based systems, but superior for some specific cases. |
| Keywords: | Emergence of cooperation, Incentive systems, Iterated games, Group selection |
| JEL: | D00 M52 C63 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:lec:leecon:13/14&r=evo |
| By: | Barnett, Richard (Department of Economics & International Business LeBow College of Business Drexel University); Bhattacharya, Joydeep (Department of Economics Iowa State University); Puhakka, Mikko (Department of Economics University of Oulu) |
| Abstract: | Evidence supports the notion that those who grow up to be patient do better than those who do not. Parents can inculcate the virtue of delayed gratification in their children by taking the right actions. We study a model in which parents, for selfish reasons, invest resources to raise patient children. In the model, patience raises the marginal return to human capital acquisition giving the patient young an incentive to spend more on their own education at the expense of investment in their own progeny’s patience. This dynamic generates intergenerational patience cycles. |
| Keywords: | patience; delayed gratification; preference transmission; human capital |
| JEL: | E20 J24 |
| Date: | 2012–08–24 |
| URL: | http://d.repec.org/n?u=RePEc:ris:drxlwp:2012_007&r=evo |
| By: | Michele Berardi |
| Abstract: | In this paper we investigate the possibility of sunspot equilibria to emerge from a process of learning and adaptation on agents' beliefs. To such end, we consider both …finite state Markov sunspots and sunspots in autoregressive form and derive conditions for the existence of an heterogeneous equilibrium where only a fraction of agents condition their forecasts on the sunspot: such conditions impose restrictions across primitive parameters, which are the equivalent, in a heterogeneous setting, of the resonant conditions found in the literature for homogeneous equilibria. We then show that evolutionary dynamics on predictor selection imply that such restrictions need to evolve endogenously with population shares, and argue that such requirement questions the possibility of sunspot equilibria to emerge through a process of evolution and adaptation on agents' beliefs. It follows that, in order for a sunspot equilibrium to obtain, all agents must simultaneously coordinate on using the same sunspot variable at the same time. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:man:cgbcrp:186&r=evo |