In this paper we study cultural diversity in values or personal norms concerning effort or work ethics, the related and observable diversity in behavior and its economic consequences. Our goal is to ...investigate the impact on this type of cultural diversity of primitive economic and behavioral parameters of the group such as the distribution of skills in the group population, the sharing rule on total income that determines income distribution and the levels of materialism, conformism and consistency in the group. Agents participate each period in a team production game by choosing their level of costly effort. We analyze the emergence and evolution of a culture in a group in which members are guided by economic incentives and also follow personal norms of behavior. We take materialism, skills and the income distribution rule as given, but personal norms evolve along the life-cycle of the individuals according to two psychological forces: cognitive dissonance or consistency and informational conformity. We characterize the long-run outcomes of the group and study how the levels of diversity, both in personal norms and in behavior and the level of incoherence between both variables are determined by the primitives of the model. We also analyze how these parameters affect group aggregate production and social welfare.
This paper presents an overlapping generations model with cultural transmission of preferences in an economy in which players face a hold up problem. One of the players, the firm, can use a testing ...technology which allows him to imperfectly monitor his partner's behaviour. This technology is completely useless with homogeneous preferences. We obtain that in the stable steady state of the economy there is a mixed distribution of preferences where both selfish and other-regarding preferences are present in the population. Moreover, with a good testing technology, the steady state is characterized by the first-best result in the investment decisions. Copyright Springer-Verlag Berlin/Heidelberg 2005
Provider: - Institution: - Data provided by Europeana Collections- The aim of this paper is to analyze if cooperation can be the product of cultural evolution in a two-stage coordination game, ...consisting of a production stage followed by a negotiation phase. We present an overlapping generations model with cultural transmission of preferences where the distribution of preferences in the population and the strategies are determined endogenously and simultaneously. There are several groups in the society; some of them play cooperatively and others do not. Socialization takes place inside the group, but there is a positive rate of migration among groups which parents anticipate. Our main result shows that all groups converge to the cooperative equilibrium.- All metadata published by Europeana are available free of restriction under the Creative Commons CC0 1.0 Universal Public Domain Dedication. However, Europeana requests that you actively acknowledge and give attribution to all metadata sources including Europeana
The labor contract usually assigns significant authority to the employer (hierarchical governance). The threat of hold-up of the employee by the employer, caused by this asymmetric distribution of ...decision rights, can be mitigated by a preference for reciprocity on the part of the employer or by a balance of power arising from the credible threat by the employee to retaliate if he or she is exploited. The authors of this working paper investigate the interaction between the employer s preferences for reciprocity and the feasibility and willingness to punish hostile behavior by the employee in an overlapping generations model where there is cultural transmission of preferences. The results show that if the net gains from specific investment are high enough, and the quantity of feasible punishment (i.e., the worker s power) is also high, the economy will converge from any initial condition to an efficient cooperative equilibrium. If either of these conditions does not hold, the market will settle down in an inefficient equilibrium where not all types of workers make specific investment or, even if they do, there is surplus destruction, because selfish firms offer low wages. Positive reciprocity on the part of the employer is not enough to achieve an efficient labor culture. There is also a need for a significant allocation of power to the workers, so as to make the threat of punishment a powerful tool to enhance efficiency and cooperation.
We present an overlapping generations model with cultural transmission of preferences, in which players face in each period a two-stage coordination game that consists of a production stage followed ...by a distribution phase. In the globally stable steady state of society, there will be a mixed distribution of preferences where both selfish and other-regarding preference sare present and, more importantly, players coordinate on the cooperative equilibrium of the coordination game. The presence of a significant fraction of individuals with other-regarding preferences acts as a stock of social capital in the society, reducing personal risk. If the proportion of selfish individuals in the initial condition of the dynamics is very high, there is still multiplicity of equilibria. We show that if there is heterogeneity in the behavior among groups and a positive rate of migration, then all groups will converge to the cooperative result.
The aim of this paper is to explain how financial constraints and family background characteristics affect the signalling educational investments of individuals born in low-income families. We show ...that talented students who are poor are unable to signal their talent, as the maximum level of education they can attain may also be achieved by less talented students who are rich. Under this approach, a de-crease in inequalities across generations cannot be expected. The paper also shows that an increase in educational standards would help poor individuals with high-ability if it is combined with other non-monetary measures.
We investigate the effect of punishment in a trust game with endowment heterogeneity in which the investor may punish the allocator at a cost. Our results indicate that the effect of the punishment ...crucially depends on the investor's capacity of punishment, that is measured in our experiment by the proportion of the allocator's payoffs that the investor can destroy. We find that punishment fosters trust when the capacity of punishment is high (i.e., when the cost of punishing is relatively low). Otherwise, punishment fails to promote trusting behavior, crowding out intrinsic motivation to trust. Trustworthiness is higher with punishment than without punishment, except if investors have a high capacity of punishment
This paper presents an overlapping generations model with cultural transmission of preferences in an economy in which players face a hold up problem. One of the players, the firm, can use a testing ...technology which allows him to imperfectly monitor his partner's behaviour. This technology is completely useless with homogeneous preferences. We obtain that in the stable steady state of the economy there is a mixed distribution of preferences where both selfish and other-regarding preferences are present in the population. Moreover, with a good testing technology, the steady state is characterized by the first-best result in the investment decisions. PUBLICATION ABSTRACT
