Introducing disappointment dynamics and comparing behaviors in evolutionary games : Some simulation results

This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly citedThe paper presents an evolutionary model, based on the assumption that agents may revise their current strategies if they previously failed to attain the maximum level of potential payoffs. We offer three versions of this reflexive mechanism, each one of which describes a distinct type: spontaneous agents, rigid players, and 'satisficers'. We use simulations to examine the performance of these types. Agents who change their strategies relatively easily tend to perform better in coordination games, but antagonistic games generally lead to more favorable outcomes if the individuals only change their strategies when disappointment from previous rounds surpasses some predefined threshold.Peer reviewedFinal Published versio

Darwinian Evolutionary Ideas in Business Economics and Organization Studies

This thesis is a study of the use of Darwinian evolutionary ideas in business economics and organization studies. Mindful of the explosion of evolutionary rhetoric in the socio-economic domain over the last three decades and informed by the modern generalized Darwinian perspective, the research has been focused on the evaluation of the precise nature and extent of use of Darwinian ideas in three of the most influential evolutionary accounts in these disciplines. Notably, Nelson and Winter’s Evolutionary Theory of Economic Change (1982), Hannan and Freeman’s Organizational Ecology (1989), and Howard Aldrich’s Organizations Evolving (1999). It is a work of comparative theory. Also since 1980, theoretical and conceptual advances in evolutionary theory confirmed the generic nature of Darwinian theory and provided generalized terms for its articulation. Whilst some major criticisms of Darwinism are easily dismissed, significantly scholars have shown that Lamarckian acquired character inheritance must be accommodated within the meta-theoretical framework of Darwinism. This study shows that whilst the damaging rhetoric of ‘Social Darwinism’ continues to discourage widespread active engagement with Darwinian theory, the pervasive implicit or ‘covert’ adoption of Darwinian ideas by social scientists nevertheless clearly endorses its general nature, confirms a Darwinian social ontology and underlines the inevitability of Darwinism in the socio-cultural domain. Following a detailed exposition of general Darwinism, this study presents a forensic comparative evaluation of the evolutionary theories under study, highlighting theoretical gaps and inconsistencies, and demonstrating their resolution within the Darwinian framework. Through the systematic application and dissection of these disparate theories, one of which is labelled ‘Lamarckian’, the analysis shows the deep extent to which they all are Darwinian. And furthermore, underlining the promise of the Darwinian system for yielding further results, the study clearly illustrates the importance of the explicit adoption of modern Darwinian concepts for helping scholars to understand the complex evolutionary processes they seek to explai

Equilibrium Vengeance

The efficiency-enhancing role of the vengeance motive is illustrated in a simple social dilemma game in extensive form. Incorporating behavioral noise and observational noise in random interactions in large groups leads to seven continuous families of (short run) Perfect Bayesian equilibria (PBE) that involve both vengeful and non-vengeful types. A new long run evolutionary equilibrium concept, Evolutionary Perfect Bayesian Equilibrium (EPBE), shrinks the equilibrium set to two points. In one EPBE, only the non-vengeful type survives and there are no mutual gains. In the other EPBE, both types survive and reap mutual gains.reciprocity; vengeance; evolutionary perfect Bayesian equilibrium; social dilemmas

‘The uses of ethnography in the science of cultural evolution’. Commentary on Mesoudi, A., Whiten, A. and K. Laland ‘Toward a unified science of cultural evolution’

There is considerable scope for developing a more explicit role for ethnography within the research program proposed in the article. Ethnographic studies of cultural micro-evolution would complement experimental approaches by providing insights into the “natural” settings in which cultural behaviours occur. Ethnography can also contribute to the study of cultural macro-evolution by shedding light on the conditions that generate and maintain cultural lineages

The Nurture of Nature: Biology, Psychology and Culture

In this thesis I explore what consequences taking development seriously in evolutionary considerations will have for how we understand the evolution of psychology and culture. I first explicate the relationship between development and evolution that informs a number of approaches to evolution, including neo-Darwinian evolutionary biology and evolutionary developmental biology. I argue that, to a greater or lesser extent, developmental processes have been misconstrued in these accounts and that the full role of development, from an evolutionary point of view, has not always been acknowledged. Instead, I suggest that a better model of the relationship between development and evolution can be found in developmental systems theory. I explore the neo-Darwinian underpinnings of a number of accounts of the evolution of culture and psychology, including the branch of evolutionary psychology associated with the work of, among others, John Tooby and Leda Cosmides, and the gene-culture co-evolutionary account of Peter Richerson and Robert Boyd. I argue that as well as being vulnerable to the same sorts of problems that plague neo-Darwinian evolutionary biology, they face other difficulties. These accounts suppose an internalist model of the mind, and this model is neither justified nor useful. The extended mind hypothesis offers a different model of the mind whereby cognitive processes can be partially constituted by structures in the environment. I sketch an alternative account of what the evolution of human psychology and culture by combining a developmental systems approach to evolution and development with the extended mind hypothesis. This will result in a very different understanding of the relationship between biology, psychology and culture

Energy, Aesthetics and Knowledge in Complex Economic Systems

It is argued that the fact that economic systems are dissipative structures must be taken fully into account in economics if we are to understand the nature of the economic-ecological interface and how to deal with emergent environmental problems, such as global warming. Such problems are a product of economic growth, which is widely accepted to be the outcome of the acquisition and application of knowledge. Drawing upon disparate literatures within and outside economics, it is argued that economic growth should be more properly viewed as the outcome of a co-evolutionary process that involves the autocatalytic interaction of new knowledge and access of increasing amounts of free energy to do increasingly specialized forms of work. The conventional view is that energy is just a factor of production used increasingly as new knowledge is employed. The possibility of reverse causation is considered here. Specifically, the relevance of the ‘energy hypothesis,’ associated with Eric Schneider and his collaborators, is assessed. This hypothesis states that all dissipative structures have, as their primary objective, the reduction of accessible free energy gradients. It is concluded that such a hypothesis cannot be rejected in the context of economic behaviour and that this opens up an important research agenda for economists. It is argued that such research has to be interdisciplinary because our economic behaviour is driven by aspirational goals which are aesthetic constructions in the mind and strongly connected to our emotions. In this regard, recent neuropsychological literature, arguing that certain emotional dispositions are necessary before we can employ our cognitive capabilities effectively, is important to digest. Thus, the possibility exists that it is in the emotional domain of the mind that the energy hypothesis is operative. Aesthetic constructions are, thus, connecting agents in the knowledge-energy co-evolutionary process. Some of the macroeconomic evidence concerning the relationship between free energy use and economic growth is considered and it is found that the energy hypothesis cannot be rejected in the economic domain. However, considerably more research needs to be undertaken before any firm conclusions can be drawn

Learning, monetary policy and asset prices

The dissertation examines several policy-related implications of relaxing the assumption that economic agents are guided by rational expectations. A first, introductory chapter presents the main technical issues related to adaptive learning. The second chapter studies the implications for monetary policy of positing that both the private sector and the central bank form their expectations through adaptive learning and that the central bank has private information on shocks to the economy but cannot credibly commit. The main finding of this chapter is that when agents learn adaptively a bias against activist policy arises. The following chapter focuses on large, non-linear models, where no unambiguous linear approximation eligible as perceived law of motion exists. Accordingly, there are heterogeneous expectations and the system converges to a misspecification equilibrium, affected by the communication strategies of the central bank. The main results are: (1) the heterogeneity of expectations persists even when a large number of observations are available; (2) the monetary policymaker has no incentive to be an inflation hawk; (3) partial transparency enhances welfare somewhat but full transparency does not. The final chapter adopts a model in which agents are fully informed and use Bayesian techniques to estimate the hidden states of the economy. The monetary policy stance is unobservable and state-independent, generating uncertainty among agents, who try to gauge it from inflation: a change in consumer prices that confirms beliefs reduces stock risk premia, while a change that contradicts beliefs drives the risk premia upward. This may generate a negative correlation between returns and inflation that explains the Fisher puzzle. The model is tested on US data. The econometric evidence suggests: (1) that a mimickingportfolio proxying for monetary policy uncertainty is a risk factor priced by financial markets; and (2) that conditioning on monetary uncertainty and fundamentals eliminates the Fisher puzzle