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on Evolutionary Economics |
| By: | Nicolas Jacquemet (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Stéphane Luchini; Jason Shogren; Adam Zylbersztejn |
| Abstract: | Under incomplete contracts, the mutual belief in reciprocity facilitates how traders create value through economic exchange. Creating such beliefs among strangers can be challenging even when they are allowed to communicate, because communication is cheap. In this paper, we first extend the literature showing that a truth-telling oath increases honesty to a sequential trust game with pre-play, fixed-form, and cheap-talk communication. Our results confirm that the oath creates more trust and cooperative behavior thanks to an improvement in communication; but we also show that the oath induces selection into communication -it makes people more wary of using communication, precisely because communication speaks louder under oath. We next designed additional treatments featuring mild and deterrent fines for deception to measure the monetary equivalent of the non-monetary incentives implemented by a truth-telling oath. We find that the oath is behaviorally equivalent to mild fines. The deterrent fine induces the highest level of cooperation. Altogether, these results confirm that allowing for interactions under oath within a trust game with communication creates significantly more economic value than the identical exchange institutions without the oath. |
| Keywords: | Trust game, cooperation, communication, commitment, deception, fine, oath |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:hal:pseptp:halshs-04722343 |
| By: | Sheyan Lalmohammed |
| Abstract: | The integration of artificial intelligence (AI) into economic systems represents a transformative shift in decision-making frameworks, introducing novel dynamics between human and AI agents. This paper proposes a welfare model that incorporates both game-theoretic and behavioral dimensions to optimize interactions within human-AI ecosystems. By leveraging agent-based modeling (ABM), we simulate these interactions, accounting for trust evolution, perceived risks, and cognitive costs. The framework redefines welfare as the aggregate utility of interactions, adjusted for collaboration synergies, efficiency penalties, and equity considerations. Dynamic trust is modeled using Bayesian updating mechanisms, while synergies between agents are quantified through a collaboration index rooted in cooperative game theory. Results reveal that trust-building and skill development are pivotal to maximizing welfare, while sensitivity analyses highlight the trade-offs between AI complexity, equity, and efficiency. This research provides actionable insights for policymakers and system designers, emphasizing the importance of equitable AI adoption and fostering sustainable human-AI collaborations. |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2501.15317 |
| By: | Roberto Galbiati (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Emeric Henry (Institut d'Études Politiques [IEP] - Paris); Nicolas Jacquemet (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Formal enforcement punishing defectors can sustain cooperation by changing incentives. In this paper, we introduce a second effect of enforcement: it can also affect the capacity to learn about the group's cooperativeness. Indeed, in contexts with strong enforcement, it is difficult to tell apart those who cooperate because of the threat of fines from those who are intrinsically cooperative types. Whenever a group is intrinsically cooperative, enforcement will thus have a negative dynamic effect on cooperation because it slows down learning about prevalent values in the group that would occur under a weaker enforcement. We provide theoretical and experimental evidence in support of this mechanism. Using a lab experiment with independent interactions and random rematching, we observe that, in early interactions, having faced an environment with fines in the past decreases current cooperation. We further show that this results from the interaction between enforcement and learning: the effect of having met cooperative partners has a stronger effect on current cooperation when this happened in an environment with no enforcement. Replacing one signal of deviation without fine by a signal of cooperation without fine in a player's history increases current cooperation by 10%; while replacing it by a signal of cooperation with fine increases current cooperation by only 5%. |
| Keywords: | Enforcement, social values, cooperation, learning, spillovers, repeated games, experiments |
| Date: | 2024–03 |
| URL: | https://d.repec.org/n?u=RePEc:hal:pseptp:hal-04511257 |
| By: | Julia M. Puaschunder (Columbia University, New York, United States) |
| Abstract: | Discounting is a hallmark in economic theory and practice. Discounting future value of options determines human behavior and market pricing. Behavioral economics adds information about human discounting peculiarities, such as the present bias and hyperbolic discounting. An ample account of discounting research finds people focus on the present more than on the past and the future. Hyperbolic discounting describes the discounting function as hyperbola around the present moment. This tendency to overvalue the current now has been found to hold for human beings with applications to many domains. For looking back at previous times, the present bias helps cope with loss and sorrow. For planning the future, the present bias and hyperbolic discounting though are often found to lead to suboptimal choices over time. This paper presents evidence that human discounting varies by age. Data is presented about time perception of time use over time, which shows a varying pattern for different age groups. The paper then brings forward the need for further research on age-dependent discounting and discusses the role of imagination and changing one’s time perspective throughout life. Elder people are assumed to live more in the past and thinking about future generations, hence a lower present bias is speculated to be present in elders. |
| Keywords: | behavioral economics, discounting, elder, future generations, hyperbolic discounting, present bias, time discounting, younger |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:smo:raiswp:0418 |
| By: | Nigus, Halefom; Mohnen, Pierre (RS: GSBE other - not theme-related research, QE Econometrics); Nillesen, Eleonora (RS: GSBE UM-BIC, Maastricht Graduate School of Governance, RS: GSBE MGSoG); Di Falco, S. |
| Abstract: | Using two lab-in-the-field experiments, we study whether initial transgression promote subsequent anti-social behavior. In the first stage subjects participated in an experimental market game. In the second stage, subjects were given an opportunity to participate in antisocial experiment. We find that subjects who impose a negative externality on uninvolved third parties in the market game are also more likely to burn their partner's income in the second experiment. This finding is consistent with a conscience-numbing effect but could possibly also be explained by participants' preferences for consistency. |
| JEL: | C93 D03 D62 D63 M14 |
| Date: | 2023–08–14 |
| URL: | https://d.repec.org/n?u=RePEc:unm:unumer:2023027 |