| 1. |
- Alger, Ingela, et al.
(författare)
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Evolution and Kantian morality
- 2016
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Ingår i: Games and Economic Behavior. - : Academic Press. - 0899-8256 .- 1090-2473. ; 98, s. 56-67
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Tidskriftsartikel (refereegranskat)abstract
- What kind of preferences should one expect evolution to favor? We propose a definition of evolutionary stability of preferences in interactions in groups of arbitrary finite size. Groups are formed under random matching that may be assortative. Individuals' preferences are their private information. The set of potential preferences are all those that can be represented by continuous functions. We show that a certain class of such preferences, that combine self-interest with morality of a Kantian flavor, are evolutionarily stable, and that preferences resulting in other behaviors are evolutionarily unstable. We also establish a connection between evolutionary stability of preferences and a generalized version of Maynard Smith's and Price's (1973) notion of evolutionary stability of strategies.
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| 2. |
- Andersson, Ola, et al.
(författare)
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Robustness to strategic uncertainty
- 2014
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Ingår i: Games and Economic Behavior. - : Elsevier BV. - 0899-8256 .- 1090-2473. ; 85:1, s. 272-288
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Tidskriftsartikel (refereegranskat)abstract
- We introduce a criterion for robustness to strategic uncertainty in games with continuum strategy sets. We model a player's uncertainty about another player's strategy as an atomless probability distribution over that player's strategy set. We call a strategy profile robust to strategic uncertainty if it is the limit, as uncertainty vanishes, of some sequence of strategy profiles in which every player's strategy is optimal under his or her uncertainty about the others. When payoff functions are continuous we show that our criterion is a refinement of Nash equilibrium and we also give sufficient conditions for existence of a robust strategy profile. In addition, we apply the criterion to Bertrand games with convex costs, a class of games with discontinuous payoff functions and a continuum of Nash equilibria. We show that it then selects a unique Nash equilibrium, in agreement with some recent experimental findings.
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| 3. |
- Huck, Steffen, et al.
(författare)
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Social norms and economic incentives in firms
- 2012
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Ingår i: Journal of Economic Behavior and Organization. - : Elsevier BV. - 0167-2681 .- 1879-1751. ; 83:2, s. 173-185
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Tidskriftsartikel (refereegranskat)abstract
- This paper studies the interplay between economic incentives and social norms in firms. We introduce a general framework to model social norms arguing that norms stem from agents' desire for, or peer pressure towards, social efficiency. In a simple model of team production we examine the interplay of three types of contracts with social norms. We show that one and the same norm can be output-increasing, neutral, or output-decreasing depending on the contract. Multiplicity of equilibria and crowding out effects of steeper incentives can arise.
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| 4. |
- Saez-Marti, Maria, et al.
(författare)
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Discounting and altruism to future decision-makers
- 2005
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Ingår i: Journal of Economic Theory. - : Elsevier BV. - 0022-0531 .- 1095-7235. ; 122:2, s. 254-266
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Tidskriftsartikel (refereegranskat)abstract
- Is discounting of future decision-makers' consumption utilities consistent with "pure" altruism toward those decision-makers, that is, a concern that they are better off according to their own, likewise forward-looking, preferences? It turns out that the answer is positive for many but not all discount functions used in the economics literature. In particular, "hyperbolic" discounting of the form used by Phelps and Pollak (Rev. Econ. Studies 35 (1968) 201) and Laibson (Quart. J. Econ. 112 (1997) 443) is consistent with exponential altruism towards future generations. More generally, we establish a one-to-one relationship between discount functions and altruism weight systems, and provide sufficient, as well as necessary, conditions for discount functions to be consistent with pure altruism.
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| 5. |
- Alger, Ingela, et al.
(författare)
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Kinship, incentives, and evolution
- 2010
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Ingår i: The American Economic Review. - : American Economic Association. - 0002-8282 .- 1944-7981. ; 100:4, s. 1725-1758
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Tidskriftsartikel (refereegranskat)abstract
- We analyze how family ties affect incentives, with focus on the strategic interaction between two mutually altruistic siblings. The siblings exert effort to produce output under uncertainty, and they may transfer output to each other. With equally altruistic siblings, their equilibrium effort is nonmonotonic in the common degree of altruism, and it depends on the harshness of the environment. We define a notion of local evolutionary stability of degrees of sibling altruism and show that this degree is lower than the kinship-relatedness factor. Numerical simulations show how family ties vary with the environment, and how this affects economic outcomes.
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| 6. |
- Lindbeck, Assar, et al.
(författare)
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Delegation of investment decisions, and optimal remuneration of agents
- 2020
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921 .- 1873-572X. ; 129
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Tidskriftsartikel (refereegranskat)abstract
- We analyze an investor who delegates information acquisition and investment decisions to an agent. The investor cannot monitor the agent's effort or information. Optimal pay schemes contain bonuses that increase with the net return rate of the investment, but, unlike conventional contracts, at a decreasing rate. Moreover, investments with low return rates are penalized, again unlike conventional contracts. Nevertheless, it may be optimal for the investor to reward the agent above the agent's reservation utility. We examine the role of the agent's risk attitude for the shape of the pay scheme, and whether firing after bad investments is a more effective threat than reduced pay. We also analyze how the nature of the contract changes if the agent is given bargaining power.
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| 7. |
- Miclo, Laurent, et al.
(författare)
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Optimal epidemic suppression under an ICU constraint : An analytical solution
- 2022
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Ingår i: Journal of Mathematical Economics. - : Elsevier. - 0304-4068 .- 1873-1538. ; 101
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Tidskriftsartikel (refereegranskat)abstract
- How much and when should we limit economic and social activity to ensure that the healthcare system is not overwhelmed during an epidemic? We study a setting where ICU resources are constrained and suppression is costly. Providing a fully analytical solution we show that the common wisdom of "flattening the curve", where suppression measures are continuously taken to hold down the spread throughout the epidemic, is suboptimal. Instead, the optimal suppression is discontinuous. The epidemic should be left unregulated in a first phase and when the ICU constraint is approaching society should quickly lock down (a discontinuity). After the lockdown, regulation should gradually be lifted, holding the rate of infected constant, thus respecting the ICU resources while not unnecessarily limiting economic activity. In a final phase, regulation is lifted. We call this strategy "filling the box". The cost under the optimal strategy is obtained in closed form as an explicit function of economic and medical fundamentals. We show that the policy is optimal also when there, in addition, is a small cost associated with the number of infected. The tighter the ICU constraint, the wider is the range of such cost for which the policy is still optimal. This suggests the primary focus of poor countries (with few ICU resources) should be to protect the health-care system, while richer countries (with extensive ICU resources) may strive to reduce the number of infected even more. (c) 2022 The Author(s). Published by Elsevier B.V. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).
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| 8. |
- Fosgerau, M., et al.
(författare)
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A note on the invariance of the distribution of the maximum
- 2018
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Ingår i: Journal of Mathematical Economics. - : Elsevier. - 0304-4068 .- 1873-1538. ; 74, s. 56-61
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Tidskriftsartikel (refereegranskat)abstract
- Many models in economics involve discrete choices where a decision-maker selects the best alternative from a finite set. Viewing the array of values of the alternatives as a random vector, the decision-maker draws a realization and chooses the alternative with the highest value. The analyst is then interested in the choice probabilities and in the value of the best alternative. The random vector has the invariance property if the distribution of the value of a specific alternative, conditional on that alternative being chosen, is the same, regardless of which alternative is considered. This note shows that the invariance property holds if and only if the marginal distributions of the random components are positive powers of each other, even when allowing for quite general statistical dependence among the random components. We illustrate the analytical power of the invariance property by way of examples.
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| 9. |
- Nyberg, Sten, 1962-, et al.
(författare)
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Social Norms and Economic Incentives in the Welfare State
- 1999
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Ingår i: Quarterly Journal of Economics. - : Oxford University Press. - 0033-5533 .- 1531-4650. ; 114:1, s. 1-35
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Tidskriftsartikel (refereegranskat)abstract
- This paper analyzes the interplay between social norms and economic incentives in the context of work decisions in the modern welfare state. We assume that to live off one's own work is a social norm, and that the larger the population share adhering to this norm, the more intensely it is felt by the individual. Individuals face two choices: one economic, whether to work or live off public transfers; and one political, how large the transfer should be. The size of the transfer and the intensity of the social norm are determined endogenously in equilibrium.
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| 10. |
- Mattsson, Lars-Göran, et al.
(författare)
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Extreme values, invariance and choice probabilities
- 2014
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Ingår i: Transportation Research Part B. - : Elsevier BV. - 0191-2615 .- 1879-2367. ; 59, s. 81-95
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Tidskriftsartikel (refereegranskat)abstract
- Since the pioneering work of McFadden (1974), discrete choice random-utility models have become work horses in many areas in transportation analysis and economics. In these models, the random variables enter additively or multiplicatively and the noise distributions take a particular parametric form. We show that the same qualitative results, with closed-form choice probabilities, can be obtained for a wide class of distributions without such specifications. This class generalizes the statistically independent distributions where any two c.d.f.:s are powers of each others to a class that allows for statistical dependence, in a way analogous to how the independent distributions in the MNL models were generalized into the subclass of MEV distributions that generates the GEV choice models. We show that this generalization is sufficient, and under statistical independence also necessary, for the following invariance property: all conditional random variables, when conditioning upon a certain alternative having been chosen, are identically distributed. While some of these results have been published earlier, we place them in a general unified framework that allows us to extend several of the results and to provide proofs that are simpler, more direct and transparent. Well-known results are obtained as special cases, and we characterize the Gumbel, Frechet and Weibull distributions.
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