nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2007‒01‒23
eight papers chosen by
Matthew Baker
US Naval Academy, USA

  1. Charles Darwin meets Amoeba economicus: Why Natural Selection Cannot Explain Rationality. By E. Khalil
  2. Collective Trust Behavior By Holm, Håkan; Nystedt, Paul
  3. Evolutionary Economics and Moral Relativism - Some Thoughts By Binder, Martin
  4. Rationality, Rule-Following and Emotions: On the Economics of Moral Preferences By V. Vanberg
  5. Imitation - Theory and Experimental Evidence - By Jose Apesteguia; Steffen Huck; Jörg Oechssler
  6. Games in the Nervous System: The Game Motoneurons Play By Irit Nowik; Idan Segev; Shmuel Zamir
  7. Asymmetric Information without Common Priors: An Indirect Evolutionary Analysis of Quantity Competition By Werner Güth; Loreto Llorente Erviti; Anthony Ziegelmeyer
  8. Rage Against the Machines: How Subjects Learn to Play Against Computers By Peter Dürsch; Albert Kolb; Jörg Oechssler; Burkhard C. Schipper

  1. By: E. Khalil
    Abstract: Advocates of natural selection usually regard rationality as redundant, i.e., as a mere linguistic device to describe natural selection. But this “Redundancy Thesis” faces the anomaly that rationality differs from natural selection. One solution is to conceive rationality as a trait selected by the neo-Darwinian mechanism of natural selection as . But this “Rationality-qua-Trait Thesis” faces a problem as well: Following neo-Darwinism, one cannot classify one allele of, e.g., eyesight as better than another without reference to constraints—while one can classify rationality as better than irrationality irrespective of constraints. Therefore, natural selection cannot be a trait. This leads us to the only solution: Rationality is actually a method that cannot be reduced to a trait. This “Rationality-qua-Method Thesis” lays the ground for alternative, developmental views of evolution.
    Keywords: Redundancy Thesis, rationality anomaly, Rationality-qua-Trait Thesis, incoherence problem, Rationality-qua-Method Length 31 pages
    JEL: D0
    Date: 2007–01
  2. By: Holm, Håkan (Department of Economics, Lund University); Nystedt, Paul (Department of Economics and Management, Linköping University)
    Abstract: This paper investigates trust in situations, where decision-makers are large groups and the decision-mechanism is collective, by developing a game to study trust behavior. Theories from behavioral economics and psychology suggest that trust in such situations may differ from individual trust. Experimental results here reveal a large difference in trust but not in trustworthiness between the individual and collective setting. Furthermore, an artefactual field experiment captures the determinants of collective trust behavior among two cohorts in the Swedish population. One result is that beliefs about the other and the own group are strongly associated with collective trustworthiness and trust behavior.
    Keywords: Collective Trust; Voting; Experiment; Beliefs
    JEL: C72 C90 C93 D70
    Date: 2006–12–20
  3. By: Binder, Martin
    Abstract: Doubts about the decidability of moral questions have often been used as an excuse for economists to eschew any normative propositions. Evolutionary economics, still lacking a well-developed normative branch, gives rise to a form of descriptive moral relativism. This paper wants to explore the consequences of adopting a form of meta-ethical and normative moral relativism as well. It develops a normative position called ‘naturalistic relativism’, which is a naturalistically reconstructed neo-pragmatist form of relativism. The paper also gives an argument why this position seems to be the adequate normative correlate for evolutionary economics.
    Keywords: evolutionary economics; moral relativism; sensory utilitarianism; continuity hypothesis; naturalistic relativism
    JEL: Z00 B52 B41
    Date: 2006–08–22
  4. By: V. Vanberg
    Abstract: The long-standing critique of the ‘economic model of man’ has gained new impetus not least due to the broadening research in behavioral and experimental economics. Many of the critics have focused on the apparent difficulty of traditional rational choice theory to account for the role of moral or ethical concerns in human conduct, and a number of authors have suggested modifications in the standard model in response to such critique. This paper takes issue with a quite commonly adopted ‘revisionist’ strategy, namely seeking to account for moral concerns by including them as additional preferences in an agent’s utility function. It is argued that this strategy ignores the critical difference between preferences over outcomes and preferences over actions, and that it fails to recognize that ‘moral preferences’ belong into the second category. Preferences over actions, however, cannot be consistently accounted for within a theoretical framework that focuses on the rationality of single actions. They require a shift of perspective, from a theory of rational choice to a theory of rule-following behavior. Length 30 pages
    Date: 2007–01
  5. By: Jose Apesteguia (Public University of Navarre, Department of Economics); Steffen Huck (, Department of Economics and ELSE); Jörg Oechssler (University of Heidelberg, Department of Economics)
    Abstract: We introduce a generalized theoretical approach to study imitation and subject it to rigorous experimental testing. In our theoretical analysis we find that the di¤erent predictions of previous imitation models are due to different informational assumptions, not to different behavioral rules. It is more important whom one imitates rather than how. In a laboratory experiment we test the different theories by systematically varying information conditions. We find significant effects of seemingly innocent changes in information. Moreover, the generalized imitation model predicts the differences between treatments well. The data pro- vide support for imitation on the individual level, both in terms of choice and in terms of perception. But imitation is not unconditional. Rather individuals propensity to imitate more successful actions is increasing in payoff differences.
    Keywords: Evolutionary game theory; Stochastic stability; Imita- tion; Cournot markets; Information; Experiments; Simulations
    JEL: C72 C91 C92 D43 L13
    Date: 2005–04
  6. By: Irit Nowik; Idan Segev; Shmuel Zamir
    Abstract: Game theory is usually applied to biology through evolutionary games. However, many competitive processes in biology may be better understood by analyzing them on a shorter time-scale than the time-course considered in evolutionary dynamics. Instead of the change in the "fitness" of a player, which is the traditional payoff in evolutionary games, we define the payoff function, tailored to the specific questions addressed. In this work we analyze the developmental competition that arises between motoneurons innervating the same muscle. The "size principle" - a fundamental principle in the organization of the motor system, stating that motoneurons with successively higher activation-threshold innervate successively larger portions of the muscle - emerges as a result of this competition. We define a game, in which motoneurons compete to innervate a maximal number of muscle-fibers. The strategies of the motoneurons are their activation-thresholds. By using a game theoretical approach we succeed to explain the emergence of the size principle and to reconcile seemingly contradictory experimental data on this issue. The evolutionary advantage of properties as the size principle, emerging as a consequence of competition rather than being genetically hardwired, is that it endows the system with adaptation capabilities, such that the outcome may be fine-tuned to fit the environment. In accordance with this idea the present study provides several experimentally-testable predictions regarding the magnitude of the size principle in different muscles.
    Date: 2006–12
  7. By: Werner Güth; Loreto Llorente Erviti; Anthony Ziegelmeyer
    Abstract: The common prior assumption justifies private beliefs as posterior probabilities when updating a common prior based on individual information. Common priors are pervasive in most economic models of incomplete information and oligopoly models with asymmetrically informed firms. 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 to analyze which priors will be evolutionarily stable when truly expected profit measures (reproductive) success. When firms believe that all other firms entertain the same beliefs Nature’s priors are not the only evolutionarily stable priors. In a second model allowing for asymmetric priors Nature’s priors are not even evolutionarily stable.
    Keywords: (Indirect) evolution; Common prior assumption; Cournot competition
    JEL: C72 D43 D82 L13
    Date: 2006–12
  8. By: Peter Dürsch (University of Heidelberg, Department of Economics); Albert Kolb (University of Bonn, Department of Economics); Jörg Oechssler (University of Heidelberg, Department of Economics); Burkhard C. Schipper (University of California, Department of Economics)
    Abstract: We use an experiment to explore how subjects learn to play against computers which are programmed to follow one of a number of standard learning algorithms. The learning theories are (unbeknown to subjects) a best response process, fictitious play, imitation, reinforcement learning, and a trial & error process. We test whether subjects try to influence those algorithms to their advantage in a forward-looking way (strategic teaching). We find that strategic teaching occurs frequently and that all learning algorithms are subject to exploitation with the notable exception of imitation. The experiment was conducted, both, on the internet and in the usual laboratory setting. We find some systematic differences, which however can be traced to the different incentives structures rather than the experimental environment.
    Keywords: learning; fictitious play; imitation; reinforcement; trial & error; strategic teaching; Cournot duopoly; experiments; internet.
    JEL: C72 C91 C92 D43 L13
    Date: 2005–10

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