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on Evolutionary Economics |
| By: | Kenju Kamei; Louis Putterman |
| Abstract: | Previous research has shown that opportunities for two-sided partner choice in finitely repeated social dilemma games can promote cooperation through a combination of sorting and opportunistic signaling, with late period defections by selfish players causing an end-game decline. How such experience would affect play of subsequent finitely-repeated games remains unclear. In each of six treatments that vary the cooperation premium and the informational basis for reputation formation, we let sets of subjects play sequences of finitely-repeated voluntary contribution games to study the competing forces of (a) learning about the benefits of reputation, and (b) learning about backward unraveling. We find, inter alia, that with a high cooperation premium and good information, investment in reputation grows across sets of finitely-repeated games. |
| Keywords: | cooperation, reputation, voluntary contribution, public goods, sorting, endogenous grouping, group formation, experiment |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:bro:econwp:2013-8&r=evo |
| By: | Alesina, Alberto F; Giuliano, Paola |
| Abstract: | We study the role of the most primitive institution in society: the family. Its organization and relationship between generations shape values formation, economic outcomes and influences national institutions. We use a measure of family ties, constructed from the World Values Survey, to review and extend the literature on the effect of family ties on economic behavior and economic attitudes. We show that strong family ties are negatively correlated with generalized trust; they imply more household production and less participation in the labor market of women, young adult and elderly. They are correlated with lower interest and participation in political activities and prefer labor market regulation and welfare systems based upon the family rather than the market or the government. Strong family ties may interfere with activities leading to faster growth, but they may provide relief from stress, support to family members and increased wellbeing. We argue that the value regarding the strength of family relationships are very persistent over time, more so than institutions like labor market regulation or welfare systems. |
| Keywords: | cultural economics; family values; growth; institutions; labor market regulations |
| JEL: | J2 J6 O4 O5 Z1 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9483&r=evo |
| By: | Choy, James (Department of Economics, University of Warwick) |
| Abstract: | Many societies are divided into multiple smaller groups. The defining feature of these groups is that certain kinds of interaction are more likely to take place within a group than across groups. I build a model in which group divisions are enforced through a reputational penalty for interacting with members of different groups. Agents who interact with members of different groups find that they can support lower levels of cooperation in the future. The model explains why agents may be punished by the other members of their group for interacting with members of different groups and why agents are punished for interacting with members of some groups but not others. I test the empirical implication that there should be less cooperation among members of groups that make up a larger percentage of their communities. I discuss the origin and possible future of social division. JEL classification: Cooperation ; Caste ; Social Institution JEL codes: C7 ; O12 ; O17 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:1011&r=evo |
| By: | Gurdal, Mehmet (Bogazici University); Miller, Joshua B. (Bocconi University); Rustichini, Aldo (University of Minnesota) |
| Abstract: | We provide experimental evidence that subjects blame others based on events they are not responsible for. In our experiment an agent chooses between a lottery and a safe asset; payment from the chosen option goes to a principal who then decides how much to allocate between the agent and a third party. We observe widespread blame: regardless of their choice, agents are blamed by principals for the outcome of the lottery, an event they are not responsible for. We provide an explanation of this apparently irrational behavior with a delegated-expertise principal-agent model, the subjects’ salient perturbation of the environment. |
| Keywords: | Experiments; Rationality; Fairness |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:cge:warwcg:157&r=evo |
| By: | Catia Batista (Faculdade de Economia, Universidade Nova de Lisboa and IZA); Dan Silverman (Arizona State University and NBER); Dean Yang (Department of Economics and Gerald R. Ford School of Public Policy, University of Michigan, NBER, and BREAD) |
| Abstract: | We investigate the determinants of giving in a lab-in-the-field experiment with large stakes. Study participants in urban Mozambique play dictator games where their counterpart is the closest person to them outside their household. Dictators share more with counterparts when they have the option of giving in kind (in the form of goods), compared to giving that must be in cash. Qualitative post-experiment responses suggest that this effect is driven by a desire to control how recipients use gifted resources. Standard economic determinants such as the rate of return to giving and the size of the endowment also affect giving, but the effects of even large changes in these determinants are significantly smaller than the effect of the in-kind option. Our results support theories of giving where the utility of givers depends on the composition (not just the level) of gift-recipient expenditures, and givers thus seek control over transferred resources. |
| Keywords: | sharing, altruism, giving, dictator game, inter-household transfers, Mozambique |
| JEL: | C92 C93 D01 D03 D64 O17 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:nor:wpaper:2013020&r=evo |
| By: | Enrico Spolaore; Romain Wacziarg |
| Abstract: | What obstacles prevent the most productive technologies from spreading to less developed economies from the world's technological frontier? In this paper, we seek to shed light on this question by quantifying the geographic and human barriers to the transmission of technologies. We argue that the intergenerational transmission of human traits, particularly culturally transmitted traits, has led to divergence between populations over the course of history. In turn, this divergence has introduced barriers to the diffusion of technologies across societies. We provide measures of historical and genealogical distances between populations, and document how such distances, relative to the world's technological frontier, act as barriers to the diffusion of development and of specific innovations. We provide an interpretation of these results in the context of an emerging literature seeking to understand variation in economic development as the result of factors rooted deep in history. |
| Keywords: | Long-run growth, genetic distance, intergenerational transmission, diffusion of innovations |
| JEL: | O11 O33 O40 O57 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:tuf:tuftec:0775&r=evo |
| By: | Keith M. Marzilli Ericson; Andreas Fuster |
| Abstract: | The endowment effect is among the best known findings in behavioral economics, and has been used as evidence for theories of reference-dependent preferences and loss aversion. However, a recent literature has questioned the robustness of the effect in the laboratory, as well as its relevance in the field. In this review, we provide a summary of the evidence, and describe recent theoretical developments that can potentially reconcile the different findings, with a focus on expectation-based reference points. We also survey recent work from psychology that provides either alternatives to or refinements of the usual loss aversion explanation. We argue that loss aversion is still the leading paradigm for understanding the endowment effect, but that given the rich psychology behind the effect, a version of the theory that encompasses multiple reference points may be required. |
| JEL: | C91 D03 D11 D87 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19384&r=evo |
| By: | Michalopoulos, Stelios (Brown University and NBER); Papaioannou, Elias (London Business School, NBER and CEPR) |
| Abstract: | We examine the long-run consequences of the scramble for Africa among European powers in the late 19th century and uncover the following empirical regularities. First, utilizing information on the spatial distribution of African ethnicities before colonization, we show that apart from the land mass and water area of an ethnicity’s historical homeland, no other geographic, economic, and historical trait, including proxies of pre-colonial conflict, predicts partitioning by the national borders. Second, we exploit a detailed geo-referenced database that records various types of conflict across African regions and show that civil conflict is concentrated in the historical homeland of partitioned ethnicities. We also document that violence against civilians (child soldiering, village burning, abductions, rapes) and territorial changes between rebel groups, militias, and government forces are more prevalent in the homelands of split groups. These results are robust to a rich set of local controls, the inclusion of country fixed effects and ethnic-family fixed effects. The uncovered evidence brings in the foreground the violent repercussions of an important aspect of European colonization, that of ethnic partitioning. |
| Keywords: | Africa, Borders, Ethnicities, Conflict, Development, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:cge:warwcg:161&r=evo |
| By: | Kevin X.D. Huang; Zheng Liu; John Q. Zhu |
| Abstract: | This paper studies the empirical relevance of temptation and self-control using household-level data from the Consumer Expenditure Survey. We construct an infinite-horizon consumption-savings model that allows, but does not require, temptation and self-control in preferences. In the presence of temptation, a wealth-consumption ratio, in addition to consumption growth, becomes a determinant of the asset-pricing kernel, and the importance of this additional pricing factor depends on the strength of temptation. To identify the presence of temptation, we exploit an implication of the theory that a more tempted individual should be more likely to hold commitment assets such as IRA or 401(k) accounts. Our estimation provides empirical support for temptation preferences. Based on our estimates, we explore some quantitative implications of this class of preferences for capital accumulation in a neoclassical growth model and the welfare cost of the business cycle |
| Keywords: | Consumption (Economics) ; Consumer behavior |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:2013-23&r=evo |