Indirect Evolutionary Analysis Research Articles

Believing in Corporate Social Responsibility: An Indirect Evolutionary Analysis

Believing in Corporate Social Responsibility: An Indirect Evolutionary Analysis

Believing in correlated types in spite of independence: An indirect evolutionary analysis

Abstract The risk-neutral equilibrium bidding strategy for first-price auctions with independent private values is justified without assuming a well-defined Bayesian game. Bidders, aware of their own value, assume the private values to be linearly related. The latter, however, are independent and identically distributed, and this is only known by Nature. Allowing for arbitrary linear common value beliefs, and assuming optimal bidding for such beliefs we derive the unique evolutionarily stable conjectural belief and justify risk neutral bidding in a new and hopefully innovative way.

Asymmetric information without common priors: an indirect evolutionary analysis of quantity competition

Asymmetric information without common priors: an indirect evolutionary analysis of quantity competition

Asymmetric information without common priors: an indirect evolutionary analysis of quantity competition

The common prior assumption justifies private beliefs as posterior probabilities when updating a common prior based on individual information. We dispose of the common prior assumption for a homogeneous oligopoly market with uncertain costs and firms entertaining arbitrary priors about other firms’ cost-type. We show that true prior beliefs can not be evolutionarily stable when truly expected profit measures (reproductive) success.

Reciprocity—an indirect evolutionary analysis

This paper investigates agents who face a stylized pecuniary ‘game of life’ comprising the ultimatum game and the dictator game. Utility may but need not be attached to equity and reciprocity, as formalized by Falk and Fischbacher (Games Econom Behav, 54(2): 293–315, 2006) but, critically, this social component of preferences cannot be conditioned on whether an ultimatum or a dictator game is played. Evolutionary fitness of agents is determined solely by material success. Under these conditions, a strong preference for reciprocity, but little interest in equity as such evolves. Possible exogenous constraints that link reciprocity and equity concerns imply long-run levels of both which depend on the relative frequency of ultimatum vs. dictator interaction in agents’ multi-game environment.

On the Coevolution of Retribution and Trustworthiness: An (Indirect) Evolutionary and Experimental Analysis

Standard economic explanations of good conduct in trade rely almost exclusively on future-directed extrinsic motivations induced by material incentives. But intrinsic motives to behave trustworthily and to punish untrustworthiness do support trade. In our model, intrinsically motivated players are aware of their own type and observe the population share of other types. The material success of various types and their coevolution are analyzed, and it is checked whether the dynamics of the indirect evolutionary analysis are replicated in the laboratory.

Inequality Aversion in a Variety of Games – An Indirect Evolutionary Analysis

The indirect evolutionary approach integrates forward‐looking evaluation of opportunities and adaptation in the light of the past. Subjective motivation determines behaviour, but long‐run evolutionary success of motivational types depends on objective factors only. This can justify intrinsic aversion to inequality in reward allocation games. Whereas earlier analysis was restricted to specific games, this article considers a more complex environment comprising different games which – studied in isolation – yield opposite implications. Persistent divergence between intrinsic motivation and true material success is possible depending on the definition of inequality aversion as well as on agents’ ability to discriminate between games.

When will payoff maximization survive?

Survival of payoff maximization is the usual as if-justification for assuming rational economic agents. An indirect evolutionary analysis allows for stimuli which are not directly related to reproductive success although they affect behavior. One first determines the solution for all possible constellations of stimuli, and then the evolutionarily stable stimuli. Our general analysis confirms the special results of former studies that payoff maximization in case of commonly known stimuli requires either that own success does not depend on other's behavior or that other's behavior is not influenced by own stimuli. When stimuli are private information, one can derive similar necessary conditions.

Do banks crowd in business ethics? An indirect evolutionary analysis

Trustworthiness as a major aspect of business ethics can evolve when it can be signaled. If this is impossible, only opportunistic traders will survive. For the institution of banks, which can guarantee payment, it is investigated whether they can crowd in trustworthiness. The crucial feature is the bank's ability to discriminate between trustworthy and unreliable debtors which, in our model, is formally captured by the probability difference of accepting their respective credit applications.

Co-evolution of Preferences and Information in Simple Games of Trust

Abstract In standard rational choice modelling decisions are made according to given information and preferences. In the model presented here the ‘information technology’ of individual decision-makers as well as their preferences evolve in a dynamic process. In this process decisions are made rationally by players who differ in their informational as well as in their preference type. Relative success of alternative decisions feeds back on the type composition of the population which in turn influences rational decision-making. An indirect evolutionary analysis of an elementary yet important basic game of trust shows that under certain parameter constellations the population dynamics of the evolutionary process specify a unique completely mixed rest point. However, as opposed to previous studies of preference formation in the game of trust there is no convergence to but only circumventing the rest point if the informational status of individuals evolves rather than being chosen strategically.