nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2007‒04‒09
four papers chosen by
Matthew Baker
US Naval Academy, USA

  1. Social Norms and the Evolution of Conditional Cooperation By Spichtig, Mathias; Traxler, Christian
  2. What to Maximize if You Must By Aviad Heifetz; Chris Shannon; Yossi Spiegel
  3. The Dynamic Evolution of Preferences By Aviad Heifetz; Chris Shannon; Yossi Spiegel
  4. An Approach to Bounded Rationality By Eli Ben-Sasson; Adam Tauman Kalai; Ehud Kalai

  1. By: Spichtig, Mathias; Traxler, Christian
    Abstract: This paper develops a model of social norms and cooperation in large societies. Within this framework we use an indirect evolutionary approach to study the endogenous formation of preferences and the coevolution of norm compliance. Thereby we link the multiplicity of equilibria, which emerges in the presence of social norms, to the evolutionary analysis: Individuals face situations where many others cooperate as well as situations where a majority free-rides. The evolutionary adaptation to such heterogenous environments will favor conditional cooperators, who condition their pro-social behavior on the others' cooperation. As conditional cooperators react flexibly to their social environment, they dominate free-riders as well as unconditional cooperators.
    Keywords: Conditional Cooperation; Indirect Evolution; Social Norms; Heterogenous Environments
    JEL: C70 Z13
    Date: 2007–03
  2. By: Aviad Heifetz; Chris Shannon; Yossi Spiegel
    Abstract: The assumption that decision makers choose actions to maximize their preferences is a central tenet in economics. This assumption is often justi…ed either formally or informally by appealing to evolutionary arguments. In contrast, we show that in almost every game and for almost every family of distortions of a player’s actual payoffs, some degree of this distortion is bene…cial to the player because of the resulting effect on opponents’ play. Consequently, such distortions will not be driven out by any evolutionary process involving payo¤-monotonic selection dynamics, in which agents with higher actual payoffs proliferate at the expense of less successful agents. In particular, under any such selection dynamics, the population will not converge to payo¤-maximizing behavior. We also show that payoff-maximizing behavior need not prevail even when preferences are imperfectly observed.
    Keywords: dispositions, evolution of preferences, genericity, selection dynamics, imperfect observability
  3. By: Aviad Heifetz; Chris Shannon; Yossi Spiegel
    Abstract: This paper develops a general methodology for characterizing the dynamic evolution of preferences in a wide class of strategic interactions. We give simple conditions characterizing the limiting distribution of preferences in general games, and apply our results to study the evolutionary emergence of overconfidence and interdependent preferences. We also show that this methodology can be adapted to cases where preferences are only imperfectly observed.
    Keywords: dispositions, evolution of preferences, selection dynamics, perception biases, interdependent preferences, imperfect observability
  4. By: Eli Ben-Sasson; Adam Tauman Kalai; Ehud Kalai
    Abstract: A central question in game theory and artificial intelligence is how a rational agent should behave in a complex environment, given that it cannot perform unbounded computations. We study strategic aspects of this question by formulating a simple model of a game with additional costs (computational or otherwise) for each strategy. First we connect this to zero-sum games, proving a counter-intuitive generalization of the classic min-max theorem to zero-sum games with the addition of strategy costs. We then show that potential games with strategy costs remain potential games. Both zero-sum and potential games with strategy costs maintain a very appealing property: simple learning dynamics converge to equilibrium.
    Keywords: bounded rationality, zero sum games, potential games, strategic complexity.

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