nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2010‒08‒06
five papers chosen by
Matthew Baker
City University of New York

  1. Can Darwinism Be "Generalized" and of What Use Would This Be? By Georgy S. Levit; Uwe Hossfeld; Ulrich Witt
  2. Evolution of Consumers’ Preferences due to Innovation By Dahlan, Rolan Mauludy; Situngkir, Hokky
  3. Limited memory can be beneficial for the evolution of cooperation By Friederike Mengel; Gergely Horváth; Jaromir Kovarik
  4. Quantity Competition, Endogenous Motives and Behavioral Heterogeneity By Chirco, Alessandra; Colombo , Caterina; Scrimitore, Marcella
  5. Social Learning with Local Interactions By Ianni, A.; Guarino, A.

  1. By: Georgy S. Levit; Uwe Hossfeld; Ulrich Witt
    Abstract: It has been suggested that, by generalizing Darwinian principles, a common foundation can be derived for all scientific disciplines dealing with evolutionary processes, especially for evolutionary economics. In this paper we show, however, that the principles of such a "Generalized Darwinism" are not those that in the development of evolutionary biology have been crucial for distinguishing Darwinian from non-Darwinian approaches and, hence, cannot be considered genuinely Darwinian. Moreover, we wonder how "Generalized Darwinism" can be made fruitful for evolutionary economics given that its principles are but an abstract hull that does not suffice to explain actual evolutionary processes in the economy. To that end specific hypotheses are required which neither follow from, nor are necessarily compatible with, the suggested abstract principles. Accordingly, we find little evidence in the literature for the claim that Generalized Darwinism can enhance the explanatory power of an evolutionary approach to economics.
    Keywords: Darwinism, evolution, evolutionary economics, Generalized Darwinism, variation, selection, retention Length 17 pages
    JEL: B25 B40 B52
    Date: 2010–07
  2. By: Dahlan, Rolan Mauludy; Situngkir, Hokky
    Abstract: The integration process between evolutionary approach and conventional economic analysis is very essential for the next development of economic studies, especially in the fundamental concepts of modern economics: supply and demand analysis. In this presentation, we use the concept of meme to explore evolution of demand. This study offers an evolutionary model of demand, which views utility as a function of the distance between the two types of sequences of memes (memeplex), which represent economic product and consumer preference. It is very different from the conventional approach of demand, which only views utility as a function of quantity. This modification provides an opportunity to see innovation and transformation of consumer preferences in the demand perspective. Innovation is seen as a change in sequence of memes in economic products, while the transformation of consumer behavior is defined as a change in the aligning memes of consumer preference. Demand quantity is the result of the selection process. This model produces some interesting characteristics, such as: (i) quantitative and qualitative properties of evolution of demand, (ii) relationship between consumer behavior and properties of evolution of demand that occurred and (iii) power law on the distribution of product lifetime. At the end we show the improvement of utility function, in the concept of meme, might create a new landscape for the further development of economics.
    Keywords: Evolutionary economics; memetics; demand; evolution; innovation; transformation of consumer behavior
    JEL: D11 D91 D40 O33 L16 E11 L15 O31 E20
    Date: 2010–07–29
  3. By: Friederike Mengel (Universidad de Alicante); Gergely Horváth (Dpto. Fundamentos del Análisis Económico); Jaromir Kovarik (Universidad de Alicante)
    Abstract: We study a dynamic process where agents in a network interact in a Prisoner’s Dilemma. The network not only mediates interactions, but also information: agents learn from their own experience and that of their neighbors in the network about the past behavior of others. Each agent can only memorize the last h periods. Evolution selects among three preference types: altruists, defectors and conditional cooperators. We show - relying on simulation techniques - that the probability of reaching a cooperative state does not relate monotonically to the size of memory h. In fact it turns out to be optimal from a population viewpoint that there is a finite bound on agents’ memory capacities. We also show that it is the interplay of local interactions, direct and indirect reputation and memory constraints that is crucial for the emergence of cooperation. Taken by itself, none of these mechanisms is sufficient to yield cooperation.
    Keywords: evolution, reputation, bounded memory, cooperation.
    JEL: C70 C72 C73
    Date: 2010–07
  4. By: Chirco, Alessandra; Colombo , Caterina; Scrimitore, Marcella
    Abstract: The paper shows that strategic quantity competition can be characterized by behavioral heterogeneity, once competing firms are allowed in a pre-market stage to optimally choose the behavioral rule they will follow in their strategic choice of quantities. In particular, partitions of the population of identical firms in profit maximizers and relative profit maximizers turn out to be deviation-proof equilibria, both in simultaneous and sequential game structures. Our findings that in a strategic framework heterogeneous behavioral rules are consistent with individual incentives provides a game-theoretic microfoundation of heterogeneity.
    Keywords: Behavioral Heterogeneity; Endogenous Motives; Relative Performance; Multistage Games; Quantity Competition.
    JEL: L21 L13 C72
    Date: 2010–07
  5. By: Ianni, A.; Guarino, A.
    Abstract: We study a simple dynamic model of social learning with local informational exter-nalities. There is a large population of agents, who repeatedly have to choose one, out of two, reversible actions, each of which is optimal in one, out of two, unknown states of the world. Each agent chooses rationally, on the basis of private information (s)he receives by a symmetric binary signal on the state, as well as the observation of the action chosen among their nearest neighbours. Actions can be updated at revision opportunities that agents receive in a random sequential order. Strategies are stationary, in that they do not depend on time, nor on location. <br><br> We show that: if agents receive equally informative signals, and observe both neighbours, then the social learning process is not adequate and the process of actions converges exponentially fast to a configuration where some agents are permanently wrong; if agents are unequally informed, in that their signal is either fully informative or fully uninformative (both with positive probability), and observe one neighbour, then the social learning process is adequate and everybody will eventually choose the action that is correct given the state. Convergence, however, obtains very slowly, namely at rate ?t: We relate the findings with the literature on social learning and discuss the property of efficiency of the information transmission mechanism under local interaction. <br><br> Keywords; Social Learning, Bayesian Learning, Local Informational External-ities, Path Dependence, Consensus, Clustering, Convergence Rates.
    Date: 2010–07–01

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