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Individual Autonomy in Evolutionary Game Theory: Defending Sugden against Ross's accusation of eliminativism
No full textIn this paper, I provide a defence of Robert Sugden’s contribution to
evolutionary game theory against Donald Ross’s accusation of eliminating the
individual’s autonomy by denying the explanatory role of rationality, utility maximization and rational beliefs. In this regard, I claim that Sugden’s methodological
remarks on evolutionary game theory do not imply a characterization of real agents
as automata. On the methodological level, Sugden claims that it is not correct to
conceive the empirical phenomenon of social evolution in terms of normative
concepts, whose empirical status is not obvious. However, Sugden proposes a
theory that explains the agent’s behaviour in terms of inductive reasoning, adaptive
beliefs, salience and pattern recognition. The latter are psychological features that
describe the way agents manage to self-determine their own actions. From these
clarifications, I draw the conclusion that Ross’s critique misunderstands Sugden’s
contribution both on the methodological and empirical level
Endogenous Preferences and Conformity: Evidence From a Pilot Experiment
Full text linkConformity 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
On inequality, growth and trust: some evidence from the lab
No full textIn a novel experimental design, we investigate the impact of exogenous variation in economic growth and inequality on trusting behaviour. In addition to a control with uniform endowment, three treatments were implemented where the initial endowment is exogenously changed to produce inequality and three growth scenarios where average endowments increase (boom), decrease (recession) or remain unaltered (steady state). We find that aggregate trust and trustworthiness both decrease due to the induced heterogeneity in endowments. Also, trust (but not trustworthiness) decreases (increases) due to recessions (booms). The impact of inequality on trust is greatest in a recession and absent in a boom. These aggregate effects are driven mainly by the reactions of those who, after treatment, end up at the bottom of the endowment distribution. These findings are close in sign and in the order of magnitude to those reported in observational studies on the relationship between growth, inequality and trust
The shaping power of market prices and individual choices on preferences. An experimental investigation
Full text linkWe repeatedly elicited individuals' Willingness to Accept (WTA) evaluations for an
auctioned bad in an experimental setting in which truthful revelation is the (weakly)
dominant strategy. We investigate whether the observation of supposedly irrelevant
signals (the market price, the asks at either the bottom or the top of the
distribution of asks) affect the elicited values. Our experimental sample was made
up of 162 subjects partitioned in 18 independent markets characterized by different
informational conditions. Our analysis provide two main findings. First, individuals’
WTA evaluations are remarkably driven by a strong although unexpected tendency
to conform to the asks either at the bottom or the top of the distribution by a factor
of 44-66\%. Second, although a clear tendency to adapt one's own ask to the
market price (Shaping effect) emerges when no other information is being
provided, the provision of information about the actual behavior of well identified
(groups of) individuals more than halves its magnitude, suggesting that this effect
may also qualify as a peculiar case of conformity. We conjecture that in the context
at hand conformity emerges as an adaptive response to a problem of preferences
imprecision. Our results are identified by means of a methodology not yet employed
in the field, which helps in distinguishing between the dynamic and the asymptotic
features of preference formation in the presence of either adaptive or rational
expectations. The overall evidence suggests a decisive role for market interactions
in the definition of preferences
Endogenous Preferences and Conformity: Evidence From a Pilot Experiment
Full text linkConformity 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
Neutralizing the Tentacles of Organized Crime. Assessment of an Anti-Crime Measure in Fighting Mafia Violence
Full text linkOrganized crime reinforces its corrupting influence on politics through violent intimidation. Anti-crime measures that increase the cost of corruption but not of the exercise of violence might accordingly lead mafia-style organizations to retaliate by resorting to violence in lieu of bribery. On the other hand, anti-corruption measures might also induce criminal clans to go inactive, owing to the higher “entry barriers” to the “business” of influencing politics, which would reduce violence. To determine which of these possible effects is prevalent, we undertake an empirical assessment of the impact of city council dissolution for mafia influence as prescribed by Decree Law 164/1991 in discouraging violence against politicians in the period 2010-2019. Our difference-in-differences analysis shows that in the dissolved municipalities the enforcement of the Law reduces violence, the effect persisting for two electoral rounds. Also, we find spillover effects moderating violence in undissolved neighboring municipalities. These findings are robust to a series of endogeneity tests
Growth in One (Short) Lesson
No full textThis paper argues that the economic theorizing about growth leads to one simple conclusion: the key notion is innovation, and the history of growth can be aptly synthesized as the history of successful innovation. Innovation includes technological progress and entrepreneurship, which in turn depend on tolerance, interaction, and – more generally – a favourable institutional
environment. Besides the importance a community assigns to credibility and reputation and from a public policy perspective we emphasize the role of both contract enforcement and protection of property rights as necessary, even though not sufficient, conditions for growth
Neutralizing the Tentacles of Organised Crime. An Assessment of an Anti-Crime Measure in Fighting Mafia’s Use of Violence.
No full textOrganised crime tightens its corrupting influence on politics through violent intimidation. Anti-crime measures that increase the cost of corruption but not of the exercise of violence might accordingly lead mafia-style organizations to retaliate by resorting to violence in lieu of bribery. On the other hand, this kind of anti-crime measure might also induce criminal clans to go inactive, owing to the lower expected payoff from the “business” of influencing politics, which would reduce violence. To determine which of these possible effects is prevalent, we undertake an empirical assessment of the impact of city council dissolution for mafia influence in Italy as prescribed by Decree Law 164/1991 in discouraging violence against politicians in the period 2010-2019. Our difference-in-differences analysis shows that in the dissolved municipalities the enforcement of the Law reduces violence and that the effect persists (at least) for two electoral rounds. The most likely driving channel of this result is the renewed pool of politicians elected after compulsory administration. These findings are robust to a series of endogeneity tests
Public subsidies and cooperation in research and development. Evidence from the lab
Full text linkWe implement an experimental design based on a duopoly game in which subjects choose whether to cooperate in Research and Development (R&D) activities. We first conduct six experimental markets that differ in both the levels of knowledge spillovers and the intensity of competition. Consistently with the theory, we find that the probability of cooperation increases in the level of spillovers and decreases in that of market competition. We then replicate the experimental markets by providing subsidies to subjects who cooperate. Subsidies relevantly increase the probability of cooperation in focus markets, causing, however, a sensible reduction of R&D investments. Overall, our evidence suggests that, depending on the characteristics of the market, the use of public subsidies might be redundant, for firms would anyway joined their R&D efforts; or counterproductive, inducing firms to significantly reduce R&D investments compared to the non-cooperative scenario
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