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on Evolutionary Economics |
| By: | Deborah A. Cobb-Clark; Sarah C. Dahmann; Daniel A. Kamhöfer; Hannah Schildberg-Hörisch |
| Abstract: | We propose a broadly applicable empirical approach to classify individuals as time-consistent versus native or sophisticated regarding their self-control limitations. Operationalizing our approach based on nationally representative data reveals that self-control problems are pervasive and that most people are at least partly aware of their limited self-control. Compared to naifs, sophisticates have higher IQs, better educated parents, and are more likely to take up commitment devices. Accounting for both the level and awareness of self-control limitations has predictive power beyond one-dimensional notions of self-control that neglect awareness. Importantly, sophistication fully compensates for self-control problems when choices involve immediate costs and later benefits. Raising people’s awareness of their own self-control limitations may thus assist them in overcoming any adverse consequences. |
| Keywords: | self-control; sophistication; naiveté; commitment devices; present bias |
| JEL: | D91 D01 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1144&r= |
| By: | Alberto Palermo (Institute for Labour Law and Industrial Relations in the European Union (IAAEU), Trier University); Clemens Buchen (WHU – Otto Beisheim School of Management) |
| Abstract: | We relax the common assumption of homogeneous beliefs in principal-agent relationships with adverse selection. Principals are competitors in the product market and write contracts also on the base of an expected aggregate. The model is a version of a cobweb model. In an evolutionary learning set-up, which is imitative, principals can have different beliefs about the distribution of agents' types in the population. The resulting nonlinear dynamic system is studied. Convergence to a uniform belief depends on the relative size of the bias in beliefs. |
| Keywords: | Evolutionary game theory, imitation equilibrium, heterogeneous beliefs, adverse selection, cobweb model |
| JEL: | C61 C73 D82 D83 E32 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:iaa:dpaper:202103&r= |
| By: | Pandey, Siddhi Gyan (Jindal School of Liberal Arts and Humanities, O.P. Jindal Global University) |
| Abstract: | Situations that require individuals to mutually cooperate are often analysed as coordination games. This paper proposes a model of cooperative network formation where the network is formed through the process of the coordination game being played between multiple agents. Additionally, network effects are modelled in by the fact that the benefit to any agent from a mutually cooperative link is enhanced, over a base value, by a factor of her trustworthiness or reputation as observed by her partner in that link. Within this framework, evolution of cooperative networks is analysed in the presence of altruistic agents, through repeated interaction between myopically best responding agents in a finite population. Properties of networks that sustain as Nash equilibrium are also analysed. |
| Keywords: | coordination game ; network formation ; game theory ; social networks |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:npf:wpaper:21/346&r= |