Education

M.Phil, Ph.D. University of Cambridge

B.A. Universidad Católica de  Chile

Publications

  • Homo economicus, entry for the Handbook on Economics & Ethics, Edward Elgar, 2008, in press.[PDF]   
Homo Economicus is a model of human agency in which the individual actor maximizes his own well-being given the constraints he faces. This approach has become the prevalent approach to human behaviour among economists, and has permeated other social sciences as well through so-called ‘rational choice theory’. 

  • A static model of co-operation for group-based incentive plans, Journal of Production Economics 2008, in press (joint work with M.Singer and P.Donoso).[PDF] 
Whenever a company implements a group-based incentive plan for the first time, free riding may destroy trust among employees and harm performance. We propose a static model to describe how employees make the decision of whether to cooperate or not, which considers material rewards and social preferences. Given the deep uncertainty involved, we conjecture that workers apply the Arrow-Hurwicz criterion, which considers a combination of the best and the worst-case scenarios. We derive a set of hypothesis from this model which are validated using data from 107 effectively implemented incentive plans.

  • Institutions influence preferences: Evidence from a common pool resource experiment, Journal of Economic Behavior and Organization,  67 (1): 215–227, 2008 (joint work with R. Guzmán and JC. Cárdenas). [PDF]
We model the dynamic effects of external enforcement on the exploitation of a common pool resource. Fitting our model to
experimental data we find that institutions influence social preferences. We solve two puzzles in the data: the increase and later erosion of cooperation when commoners vote against the imposition of a fine, and the high deterrence power of low fines. When fines are rejected, internalization of a social norm explains the increased cooperation; violations (accidental or not), coupled with reciprocal preferences, account for the erosion.
  • The dynamics of a mobile phone network, Physica A 387(12): 3017-24 2008 (joint work with C.A. Hidalgo). [PDF]      *On the news at PhysOrg 
The empirical study of network dynamics has been limited by the lack of longitudinal data. Here we introduce a quantitative
indicator of link persistence to explore the correlations between the structure of a mobile phone network and the persistence of its links.We show that persistent links tend to be reciprocal and are more common for people with low degree and high clustering.We study the redundancy of the associations between persistence, degree, clustering and reciprocity and show that reciprocity is the strongest predictor of tie persistence. The method presented can be easily adapted to characterize the dynamics of other networks and can be used to identify the links that are most likely to survive in the future.
  • The effect of social interactions in the primary consumption life cycle of motion pictures, New Journal of Physics 8 (52), 2006 (joint work with C. Hidalgo and A. Castro). [PDF]
    *On the news at Nature 
We develop a ‘basic principles’model which accounts for the primary life cycle consumption of films as a social coordination problem in which information transmission is governed by word of mouth. We fit the analytical
solution of such a model to aggregated consumption data from the film industry and derive a quantitative estimator of its quality based on the structure of the life cycle.
  • When in Rome, do as the Romans: The coevolution of punishment, conformism and cooperation, Evolution and Human Behavior 28 (2): 112-117, 2007 (joint work with R. Guzmán and R.E. Rowthorn). [PDF]
We model the coevolution of behavioral strategies and social learning rules in the context of a cooperative dilemma, a situation in which individuals must decide whether or not to subordinate their own interests to those of the group. There are two learning rules in our model,conformism and payoff-dependent imitation, which evolve by natural selection, and three behavioral strategies, cooperate, defect, and
cooperate, plus punish defectors, which evolve under the influence of the prevailing learning rules. Group and individual level selective pressures drive evolution.
We also simulate our model for conditions that approximate those in which early hominids lived. We find that conformism can evolve when the only problem that individuals face is a cooperative dilemma, in which prosocial behavior is always costly to the individual. Furthermore, the presence of conformists dramatically increases the group size for which cooperation can be sustained. The results of our model are robust: they hold even when migration rates are high, and when conflict among groups is infrequent.

  • Endogenous Group Reputation: A Formal Model (Reputación Grupal Endógena: Un Modelo Formal), Revista Internacional de Sociología, in press, 2006 (joint work with E. Valenzuela). [PDF]

When investment in individual reputation cannot solve contract incompleteness, group reputation becomes crucial to achieve social cooperation. In this article we develop a formal model in which the link between social pressure, group reputation formation and between groups trust is studied. Specifically, we model a transaction which involves trust as an asymmetric game. Additionally, we consider the operation of community-enforced sanctions within the group whose trustworthiness is required. We show that for a proportion high enough of honourable agents willing to sanction non-honourable peers, the optimal strategy of a selfish rational agent is to honour trust when placed in him and, therefore, the perfect Bayesian equilibrium is one in which inter-group trust emerges. The required proportion of sanctioning agents depends negatively on the efficacy of the sanctioning technology and positively on the size of the opportunistic incentives faced by the agents whose trustworthiness is required. Even if the deterrence effect of social pressure is not strong enough, trust can emerge if the potential benefits from cooperation compensate the eventual harm associated with abused trust.

Working Papers

  • The Economics of Early Stratification, under review at JPE (joint work with R. Guzmán and R.E. Rowthorn). [PDF]
  • The evolution of moral codes of behavior (joint work with C.A. Kuzmics).[PDF]
  • Voluntary Exposure and Reciprocal Obligations in Contexts of Trust: An Analytical Framework and Empirical Evidence (joint work with R.E. Rowthorn). [PDF]
  • Methodological Individualism in Normative Economics. [PDF]
  • The Inhibition of Social Intelligence within Social Contextx ((joint work with R. Guzmán and R.E. Rowthorn).