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on Evolutionary Economics |
| By: | Christiansen, Anna Gade (Department of Economics, Copenhagen Business School); Llorca, Manuel (Department of Economics, Copenhagen Business School); Jamasb, Tooraj (Department of Economics, Copenhagen Business School); Zhao, Tian (School of Economics and Management, Beihang University, China) |
| Abstract: | This paper investigates how energy networks in the European Union can be encouraged to increase innovation to reach the decarbonisation goals. We design and analyse a tripar-tite evolutionary game model with the European Commission, national energy regulators, and energy network companies being the groups of players in the game. We find that the only evolutionary stable state of the game is where the three groups of players choose cooperation strategies. For the Commission and the national regulatory authorities, induc-ing innovation involves adopting new policy and regulatory mechanisms, respectively. For the energy networks, it involves investing in innovation with decarbonisation goals. We assume that the initial probability of the Commission choosing its cooperation strategy is relatively high and the initial probabilities of the regulators and the energy networks choosing cooperation strategies is relatively low. Numerical simulations suggest that the convergence rate to the evolutionary stable state can be increased if the Commission in-creases the probability of energy networks receiving external funding and penalty im-posed on regulators to adapt their incentive mechanisms to induce innovation. The Com-mission clearly plays a key role in reaching the stable state. |
| Keywords: | Energy networks; innovation; regulation; green transition; tripartite evolutionary game |
| JEL: | C70 L50 L90 O30 Q40 Q50 |
| Date: | 2024–06–24 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:cbsnow:2024_011 |
| By: | Boczoń, Marta; Vespa, Emanuel; Weidman, Taylor; Wilson, Alistair J |
| Abstract: | Abstract: In repeated games, where both collusive and noncollusive outcomes can be supported as equilibria, it is crucial to understand the likelihood of selection for each type of equilibrium. Controlled experiments have empirically validated a selection criterion for the two-player repeated prisoner’s dilemma: the basin of attraction for always defect. This prediction device uses the game primitives to measure the set of beliefs for which an agent would prefer to unconditionally defect rather than attempt conditional cooperation. This belief measure reflects strategic uncertainty over others’ actions, where the prediction is for noncooperative outcomes when the basin measure is full, and cooperative outcomes when empty. We expand this selection notion to multi-player social dilemmas and experimentally test the predictions, manipulating both the total number of players and the payoff tensions. Our results affirm the model as a tool for predicting long-term cooperation, while also speaking to some limitations when dealing with first-time encounters. |
| Keywords: | Economics, Applied Economics, Economic Theory, Applied economics, Econometrics, Economic theory |
| Date: | 2024–07–05 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:ucsdec:qt7pk7c4gb |
| By: | Alexandre Truc (Université Côte d'Azur, CNRS, GREDEG, France); Muriel Dal Pont Legrand (Université Côte d'Azur, CNRS, GREDEG, France) |
| Abstract: | In the present paper, we investigate the diffusion of agent-based models (ABMs) in economics using a quantitative approach to better understand how the introduction of this tool in economics influenced the structure of the field as well as research programs in recent years. Our analysis shows that the proliferation of ABMs has resulted in the emergence of diverse research subfields rather than one unified research program. Most notably, we highlight how interdisciplinarity plays a pivotal role in understanding the diversity of ways in which agent-based models are integrated into economics. While in some cases ABMs are used by economists as an imported tool to address disciplinary-oriented questions in dedicated subfields journals, in other cases ABMs are a vehicle for more interdisciplinary transfers and interactions (e.g., interdisciplinary co-authorship) that are more challenging to the traditional frontiers of economics. |
| Keywords: | Agent-Based, Interdisciplinarity, Social Network Analysis |
| JEL: | B2 B21 B4 D9 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:gre:wpaper:2024-19 |
| By: | Fabian Herweg; Svenja Hippel; Daniel Müller; Fabio Römeis |
| Abstract: | We investigate whether violations of canonical axioms of choice under risk are mistakes or a manifestation of true preferences. First, we elicit axiom and gamble preferences and then allow subjects to revise their potentially conflicting preferences. Among the behavioral patterns that allow for a clear-cut interpretation on the decision level, we find that roughly 70% of axiom viola-tions are intentional whereas only 30% are mistakes. On the subject level we can clearly categorize almost half of our subjects. Among those, roughly 24%are rational expected utility maximizers, 24% make occasional mistakes, and 52% refute the normative value of these axioms. |
| Keywords: | axiomatic rationality, choice under risk, context-dependent preferences, mistakes, regret theory |
| JEL: | C91 D01 D81 D91 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11166 |
| By: | Tariq Khan |
| Abstract: | The location of Western Civilization defined nations in Europe and in the United States within the largest global pollen environments on the planet is proposed as a key factor leading to their success. Environments with dense pollen concentrations will cause large up and down changes in serum histamine directly causing reductions and increases in brain serotonin i.e., a larger serotonin slope, linked to higher levels of creativity. The pollen ecosystem in northern latitude nations is thus considered the hidden driver of the success of these populations as the biochemical interaction between histamine and serotonin leads to a creativity pump that is proposed as the fundamental driver of intelligence in micro and macro human populations. |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2406.13563 |
| By: | Jonathan Gehle; Ferdinand A. von Siemens; Ferdinand von Siemens |
| Abstract: | We investigate how heterogeneous social preferences affect the communication of painful information in social relationships. We characterize the existence conditions for a pooling equilibrium in which individuals conceal painful information because revealing the latter would signal that they are selfish, thereby leading to a loss of trust. We also find that compassionate individuals may then be more tempted to reveal bad news than selfish individuals because they benefit less from an intact social relationship. Moreover, there may be multiple equilibria with different degrees of information disclosure and standard equilibrium refinements have no bite. Coordination on an inefficient equilibrium could therefore lead to severe information frictions, even if the pain of receiving bad news is quite small. |
| Keywords: | communication, painful information, social preferences, trust |
| JEL: | D82 D83 D91 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11181 |
| By: | Yuan Gu; Chao Hung Chan |
| Abstract: | This paper proposes a model of decision-making under uncertainty in which an agent is constrained in her cognitive ability to consider complex acts. We identify the complexity of an act according to the corresponding partition of state space. The agent ranks acts according to the expected utility net of complexity cost. A key feature of this model is that the agent is able to update her complexity cost function after the arrival of new information. The main result characterizes axiomatically an updating rule for complexity cost function, the Minimal Complexity Aversion representation. According to this rule, the agent measures the complexity cost of an act conditional on the new information by using the cost of another act that gives exactly the same partition of the event but with the lowest ex-ante cost. |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2406.18463 |
| By: | Giuliano, Paola (University of California, Los Angeles); Spilimbergo, Antonio (International Monetary Fund) |
| Abstract: | A growing body of work has shown that aggregate shocks affect the formation of preferences and beliefs. This article reviews evidence from sociology, social psychology, and economics to assess the relevance of aggregate shocks, whether the period in which they are experienced matters, and whether they alter preferences and beliefs permanently. We review the literature on recessions, inflation experiences, trade shocks, and aggregate non-economic shocks including migrations, wars, terrorist attacks, pandemics, and natural disasters. For each aggregate shock, we discuss the main empirical methodologies, their limitations, and their comparability across studies, outlining possible mechanisms whenever available. A few conclusions emerge consistently across the reviewed papers. First, aggregate shocks impact many preferences and beliefs, including political preferences, risk attitudes, and trust in institutions. Second, the effect of shocks experienced during young adulthood is stronger and longer lasting. Third, negative aggregate economic shocks generally move preferences and beliefs to the right of the political spectrum, while the effects of non-economic adverse shocks are more heterogeneous and depend on the context. |
| Keywords: | aggregate shocks, preferences, beliefs |
| JEL: | E00 P00 Z1 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17110 |