Individual autonomy in evolutionary game theory: defending Sugden against Ross’s accusation of eliminativism

In 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.     

It’s a match! Simulating compatibility-based learning in a network of networks

In this article, we develop a new way to capture knowledge diffusion and assimilation in innovation networks by means of an agent-based simulation model. The model incorporates three essential characteristics of knowledge that have not been covered entirely by previous diffusion models: the network character of knowledge, compatibility of new knowledge with already existing knowledge, and the fact that transmission of knowledge requires some form of attention. We employ a network-of- networks approach, where agents are located within an innovation network and each agent itself contains another network composed of knowledge units (KUs). Since social learning is a path-dependent process, in our model, KUs are exchanged among agents and integrated into their respective knowledge networks depending on the received KUs’ compatibility with the currently focused ones. Thereby, we are also able to endogenize attributes such as absorptive capacity that have been treated as an exogenous parameter in some of the previous diffusion models. We use our model to simulate and analyze various scenarios, including cases for different degrees of knowledge diversity and cognitive distance among agents as well as knowledge exploitation vs. exploration strategies. Here, the model is able to distinguish between two levels of knowledge diversity: heterogeneity within and between agents. Additionally, our simulation results give fresh impetus to debates about the interplay of innovation network structure and knowledge diffusion. In summary, our article proposes a novel way of modeling knowledge diffusion, thereby contributing to an advancement of the economics of innovation and knowledge.     

When is the risk of cooperation worth taking? The prisoner’s dilemma as a game of multiple motives

This experimental article helps to understand the motives behind cooperation in the prisoner’s dilemma. It manipulates the pay-off in case both players defect in a two-player, one-shot prisoner’s dilemma and explains the degree of cooperation by a combination of four motives: efficiency, conditional cooperation, fear and greed. All motives are significant but some become only significant if one controls for all remaining ones. This seems to be the reason why earlier attempts at explaining choices in the prisoner’s dilemma with personality have not been successful.     

The adoption and termination of profit sharing for employees: does management’s attitude play a role?

Examinations on the determinants of profit sharing usually focus on objective firm characteristics. Using data from manufacturing firms in Germany, this study shows that managers’ subjective attitudes towards profit sharing also play an important role in the adoption and termination of this payment scheme. Positive management attitudes are associated with an increased likelihood of adopting profit sharing. While to some extent this entails failed experimentation, positive managerial attitudes also substantially contribute to a sustained use of profit sharing. The pattern of results holds even when controlling for a variety of objective firm characteristics.     

Playing the trust game with other people’s money

We experimentally investigate to what extent people trust and honor trust when they are playing with other people’s money (OPM). We adopt the well-known trust game by Berg et al. (in Games Econ. Behav. 10:122–142, 1995), with the difference that the trustor (sender) who sends money to the trustee (receiver) does this on behalf of a third party. We find that senders who make decisions on behalf of others do not behave significantly different from senders in our baseline trust game who manage their own money. But receivers return significantly less money when senders send a third party’s money. As a result, trust is only profitable in the baseline trust game, but not in the OPM treatment. The treatment effect among the receivers is gender specific. Women return significantly less money in OPM than in baseline, while there is no such treatment effect among men. Moreover, women return significantly less than men in the OPM treatment.     

The effect of a wife’s retirement on her husband’s mental health

This article examines the effect of wives’ retirement on their husband’s mental health in Australia. By exploiting the exogenous variations in women’s retirement induced by the age pension qualifying ages, we find that spousal retirement status has a positive impact on the mental health of older men. This beneficial impact is found to strengthen with wives’ time spent in retirement. We show that wife’s retirement affects the constituents of her husband’s mental well-being in different ways. We also have identified four channels for the positive linkage between older women’s retirement and the mental health of their spouse.     

The control of game form recognition in experiments: understanding dominant strategy failures in a simple two person “guessing” game

This paper focuses on instructions and procedures as the reasons that subjects fail to behave according to the predictions of game theory in two-person “guessing game” (beauty contest game) experiments. In this game, two individuals simultaneously choose a number between 0 and 100. The winner is the person whose chosen number is the closest to 2/3 of the average of the two numbers. The weakly dominant strategy is zero. Because of the simplicity of the game, the widespread failure of subjects to choose the weakly dominant strategy has been interpreted as evidence of some fundamental inability to behave strategically. By contrast, we find that subjects’ behavior reflects a lack of understanding of the game form, which we define as the relationships between possible choices, outcomes and payoffs. To a surprising degree, subjects seem to have little understanding of the experimental environment in which they are participating. If subjects do not understand the game form, the experimental control needed for testing game theory is lost. The experiments reported here demonstrate that the failure to act strategically is related to how the game is presented. We test how well subjects are able to recognize the game under a variety of different presentations of the game. Some subjects fail to recognize the game form when it is presented abstractly. When the game is transformed into a simple isomorphic game and presented in a familiar context, subjects do choose weakly dominant strategies. While our results confirm the ability of subjects to make strategic decisions, they also emphasize the need to understand the limitations of experimental subjects’ ability to grasp the game as the experimenter intends. Given these limitations, we provide suggestions for better experimental control.     

‘Give me a chance!’ An experiment in social decision under risk

This paper reports the results of a ‘probabilistic dictator game’ experiment in which subjects were given an option to share chances to win a prize with a dummy player. Using a within-subject design we manipulated two aspects of the decision, the relative cost of sharing and the nature of the lottery: the draws were either independent for the two players (‘noncompetitive’ condition) or one’s success meant other’s failure (‘competitive’ condition). We also asked for decisions in a standard, non-probabilistic, setting. The main results can be summarized as follows: first, a substantial fraction of subjects do share chances to win, also in the competitive treatments, thus showing concern for the other player that cannot be explained by outcome-based models. Second, subjects share less in the competitive treatment than in other treatments, indicating that procedural fairness alone cannot explain the data. Overall, these results suggest that models aiming at generalizing social concerns to risky environments will have to rely on a mix of distributive and procedural fairness.     

Easter Island’s collapse: a tale of a population race

The Easter Island tragedy has become an allegory for ecological catastrophe and a warning for the future. In the economic literature the collapse is usually attributed to irrational or myopic behavior in the context of a fragile ecosystem. In this paper we propose an alternative story involving non-cooperative bargaining between clans to share the crop. Each clan’s bargaining power depends on its threat level when fighting a war. The biggest group has the highest probability of winning. A clan’s fertility is determined ex ante by each group. In the quest for greater bargaining power, each clan’s optimal size depends on that of the other clan, and a population race follows. This race may exhaust the natural resources and lead to the ultimate collapse of the society. In addition to well-known natural factors, the likelihood of a collapse turns out to be greater when the cost of war is low, the probability of succeeding in war is highly responsive to the number of fighters, and the marginal return to labor is high. We analyze whether these factors can account for the difference between Easter and Tikopia Islands. The paper also makes a methodological contribution in that it is the first fertility model to include strategic complementarities between groups’ fertility decisions.      

The changing pattern of industrial technology linkage structure of Korea: Did the ICT industry play a role in the 1980s and 1990s?

The notion of the knowledge-based economy highlights the strategic importance of inter-industrial knowledge flows. Among others, the crucial role of information and communications technology (ICT) industry is emphasized. The pattern whereby technological knowledge is created, accumulated and disseminated through the interactive learning among industries can be portrayed as a network. Based on the network theory, this empirical study analyses, from the dynamic perspective, inter-industrial technological knowledge structure of Korean industries during the reference period of early 1980s to mid-1990s. Overall, the density of the network increased over time, implying that the knowledge network has expanded and intensified. The role of the ICT industry in the global network has also increased but needs to be further strengthened, especially informatization of non-ICT industries by the outflow of ICT industrial knowledge in the future. The findings in turn render some important policy implications that should be addressed in developing technology policy.     

Media’s role in the making of a democrat: Evidence from East Germany

This paper explores the causal influence of media content on voting behavior. We exploit a natural experiment involving access to West German TV within the German Democratic Republic. Focusing on federal and state election outcomes in the post-reunification decade (i.e., a time at which TV content was harmonized), we find that municipalities that had access to Western TV broadcasts before reunification have lower vote shares for left-wing and right-wing extremist parties. With regard to potential channels, we provide evidence based on survey data that GDR citizens with access to West German TV were less loyal to the socialist regime, less hostile toward foreigners, and exhibited higher levels of social capital. Our findings thus support the notion that access to free media influences political attitudes and facilitates the consolidation of democracy.     

More than words: the effects of cheap talk in a volunteer’s dilemma

We theoretically and experimentally investigate a game in which exactly one person should make a costly effort to achieve a socially efficient outcome. This setting is commonly known as the volunteer’s dilemma. We implement one-way communication by allowing one player to send a message indicating whether she intends to volunteer and investigate the message’s effects on behavior and efficiency in the subsequent game. We theoretically demonstrate that there are asymmetric mixed-strategy equilibria in the volunteer’s dilemma and argue that one of these is likely to emerge through one-way communication. The experimental data support this notion. We find that the actions of both the sender and receiver of the message are crucially affected by the cheap talk stage and that efficiency in the volunteer’s dilemma increases with one-way communication.     

Analysis of product efficiency in the Korean automobile market from a consumer’s perspective

In this study we develop and describe a conceptual and methodological framework to measure technical and allocative efficiency at the product level considering consumer choice, which encompasses overall efficiency. Empirically, we combined data envelopment analysis and a discrete choice model in order to measure efficiency levels. The suggested framework is applied to the Korean automobile market. The relationship between the level of efficiency and market performance is discussed in terms of market share.     

Sustainable exploitation of a natural resource: a satisfying use of Chichilnisky’s criterion

Chichilnisky’s criterion for sustainability has the merit to be, so far, the unique explicit, complete and continuous social welfare criterion that combines successfully the requirement of efficiency with an instrumental notion of intergenerational equity (no dictatorship of the present and no dictatorship of the future). But it has one drawback: when applied in the context of renewable resources, and with a constant discount factor, there exists no exploitation path that maximizes this criterion. The present article suggests a way to cope with this problem. The idea is to restrict attention to the set of convex combinations between the optimal discounted utilitarian program and the stationary program leading to the green golden rule. It is shown that an optimal path in this set exists under rather weak sufficient conditions on the fundamentals of the problem. Some ethical properties of this approach are also discussed. In some cases, it turns out that the restricted solution implies no loss of efficiency and benefits intermediate and infinitely distant generations.     

Pay-what-you-want in groups – evidence from a field experiment

Pay-what-you-want (PWYW) mechanisms are a specific form of voluntary market payment. While a large number of recent studies have considered their design options, the aspect of group behaviour in PWYW situations has not been investigated, although a substantial part of payment decisions occur in group constellations. We provide initial evidence by running a field experiment implementing a PWYW mechanism in a cinema characterized by group attendance, finding that groups chose to pay similar amounts as individuals. Group payments can be increased by a prosocial framing of the decision, while an increase in group size and repeated participation reduce voluntary payments. We thus show that group payment decisions in PWYW situations are characterized by altruism concerns rather than in-group egoism.     

Bendamustine-rituximab: a cost-utility analysis in first-line treatment of indolent non-Hodgkin’s lymphoma in England and Wales

Objective:

To evaluate the cost-effectiveness of bendamustine-rituximab (B-R) compared with CHOP-R (cyclophosphamide, doxorubicin, vincristine, prednisone, rituximab) and CVP-R (cyclophosphamide, vincristine, prednisone, rituximab) as first-line treatment for patients with advanced indolent non-Hodgkin’s lymphoma (NHL).

Methods:

A patient-level simulation was adapted from the model used by the University of Sheffield School of Health and Related Research (ScHARR) in a health technology appraisal of rituximab for first-line treatment of follicular lymphoma. This approach allowed modelling of the complex treatment pathways in indolent NHL. Data from a Phase 3 randomized, open-label trial were used to compare B-R with CHOP-R. The relative efficacy of CHOP-R and CVP-R was estimated using an indirect treatment comparison similar to the original ScHARR approach. The analysis was conducted from the perspective of the National Health Service in England and Wales, using a lifetime time horizon. A number of one-way sensitivity and scenario analyses were conducted, including one using recently published data comparing CVP-R with CHOP-R.

Results:

The deterministic incremental cost-effectiveness ratio (ICER) was £5249 per quality adjusted life year (QALY) for B-R vs CHOP-R, and £8092 per QALY for B-R vs CVP-R. The alternative scenario using direct data comparing CVP-R with CHOP-R approximately halved the ICER for B-R vs CVP-R to £4733. Owing to its better toxicity profile, B-R reduced the cost of treating adverse events by over £1000 per patient vs CHOP-R.

Limitations:

The main limitations were: immaturity of overall survival data from the Phase 3 trial; reliance on quality-of-life data from previous health technology appraisals (as this was not collected in the trial); and a lack of direct evidence or a network of connected evidence comparing B-R with CVP-R.

Conclusions:

The ICERs for B-R vs CHOP-R and CVP-R were considerably below the thresholds normally regarded as cost-effective in England and Wales (£20,000–30,000 per QALY).     

An experimental analysis of team production in networks

Experimental and empirical evidence highlights the role of networks on social outcomes. This paper tests the properties of exogenously fixed networks in team production. Subjects make the same decisions in a team work environment under four different organizational networks: the line, the circle, the star, and the complete network. In all the networks, links make information available to neighbors. This design allows us to analyze decisions across networks and a variety of subject types in a standard linear team production game. Contribution levels differ significantly across networks and the star is the most efficient incomplete network. Moreover, our results suggest that subjects act as conditional cooperators with respect to the information received from the network.     

Teachers’ versus parental choice and the tracking distribution of students: a natural experiment

This article studies the secondary school track choice and considers to what extent parents’ and teachers’ assessment of students diverge. We take advantage of a reform in the German state of North Rhine-Westphalia (NRW) in 2006. The reform replaced parents’ choice about their children’s secondary school type by a binding teacher recommendation. Our data comprise class-level information on all public primary schools in the state. We find that teachers tend to recommend higher school types than parents. However, more precise analysis shows that this effect can be limited to districts with above average proportion of immigrants.     

Consumers’ preferences for a local food product: a real choice experiment

This paper analyses consumers’ preferences for a local food in Spain and assesses their willingness to pay (WTP) using a real choice experiment to mitigate possible hypothetical bias. In particular, preferences for fresh lamb meat were investigated and two attributes evaluated, “locally grown” and the type of lamb meat. Data came from an experiment conducted in Spain during 2009. An error component random Parameter model with correlated errors was used to estimate the effect of the attributes on consumers’ utility and derive their WTP. Results suggest that consumers positively value both attributes and are willing to pay a premium of 9 % price increase for the “locally grown” lamb meat (“Ojinegra from Teruel”) and 13 % price increase for the “Ternasco” lamb meat. If we assume a market where only “Ternasco” lamb meat without indication of the local origin is sold, and then a new “Ternasco” lamb is introduced in the market with the “Ojinegra from Teruel” label, this new local lamb meat would capture 18 % of the market if the package is assumed to be sold at 3.5 \(\hbox {C}\!\!\!\!\!=\) and a 10 % market share if the package is assumed to be sold at 4 \(\hbox {C}\!\!\!\!\!=\) .