Evolutionary Thinking in Microeconomic Models: Prestige Bias and Market Bubbles

<div><p>Evolutionary models broadly support a number of social learning strategies likely important in economic behavior. Using a simple model of price dynamics, I show how prestige bias, or copying of famed (and likely successful) individuals, influences price equilibria and investor disposition in a way that exacerbates or creates market bubbles. I discuss how integrating the social learning and demographic forces important in cultural evolution with economic models provides a fruitful line of inquiry into real-world behavior.</p> </div

The Population Ecology of Despotism

Since despotism is a common evolutionary development in human history, we seek to understand the conditions under which it can originate, persist, and affect population trajectories. We describe a general system of population ecology equations representing the Ideal Free and Despotic Distributions for one and two habitats, one of which contains a despotic class that controls the distribution of resources. Using analytical and numerical solutions we derive the optimal concession strategy by despots with and without subordinate migration to an alternative habitat. We show that low concessions exponentially increase the time it takes for the despotic habitat to fill, and we discuss the trade-offs despots and subordinates confront at various levels of exploitation. Contrary to previous hypotheses, higher levels of despotism do not necessarily cause faster migration to alternative habitats. We further show how, during colonization, divergent population trajectories may arise if despotic systems experience Allee-type economies of scale

Plausible learning biases important to economic processes – decision-making and biased-transmission learning strategies (from [15]).

<p>Plausible learning biases important to economic processes – decision-making and biased-transmission learning strategies (from <a href="http://www.plosone.org/article/info:doi/10.1371/journal.pone.0059805#pone.0059805-Richerson1" target="_blank">[15]</a>).</p

The Population Ecology of Despotism

Since despotism is a common evolutionary development in human history, we seek to understand the conditions under which it can originate, persist, and affect population trajectories. We describe a general system of population ecology equations representing the Ideal Free and Despotic Distributions for one and two habitats, one of which contains a despotic class that controls the distribution of resources. Using analytical and numerical solutions we derive the optimal concession strategy by despots with and without subordinate migration to an alternative habitat. We show that low concessions exponentially increase the time it takes for the despotic habitat to fill, and we discuss the trade-offs despots and subordinates confront at various levels of exploitation. Contrary to previous hypotheses, higher levels of despotism do not necessarily cause faster migration to alternative habitats. We further show how, during colonization, divergent population trajectories may arise if despotic systems experience Allee-type economies of scale

Plot of the fitness differences between Coalition Males () and Non-coalition Males () as a function of the differences in the level of Extra-Pair Matings (EPMs) and childcare.

<p>For the left panel the level of EPMs for Coalition Males is set at . The right panel has the level of paternal care for Non-coalition Males set at . The solid line with its respective confidence intervals (dashed lines) were estimated through simulation by drawing 10,000 random parameter sets from <a href="http://www.plosone.org/article/info:doi/10.1371/journal.pone.0083667#pone-0083667-t001" target="_blank">Table 1</a>. Gray regions highlight when Coalition Males are favored, with the corresponding white region showing when Non-coalition Males are favored. The level of kin selection () and positive assortment between Cooperative Mothers and Coalition Males () is zero.</p

Infant care classification for 105 primate species, from the appendix to Sarah Hrdy’s treatise on infant care [4], [52].

<p>Hrdy’s classification <a href="http://www.plosone.org/article/info:doi/10.1371/journal.pone.0083667#pone.0083667-Hrdy3" target="_blank">[52]</a> follows: <i>Exclusive maternal care</i>: mother is very possessive and is the only one to hold and carry her infant. <i>Maternal and paternal care</i>: mother allows male she is paired with to take and carry infant and he is eager to do so. In New World monkeys, infant may actually take the initiative in transferring to “father.” Typically, the mother’s mate is the main caretaker, and alloparents are rarely involved. <i>Shared care</i>: mother is tolerant and allows allomothers to take and carry her infant within 3 weeks of birth. <i>Shared care with suckling</i>: group members other than the mother care for infants, and if the allomother is lactating, she allows an infant other than her own to suckle. Allomaternal suckling may range from occasional and brief access to more sustained access, as in species where two mothers share a nest. <i>Shared care + prov</i>: provisioning ranges from minimal to extensive. <i>Shared care + milk + provisioning</i>: combinations of behaviors described above.</p

Delay-constrained achievable rate maximization in wireless relay networks with causal feedback

Motivated by delay-sensitive information transmission applications, we propose an expected achievable rate maximization scheme with a K-block delay constraint on data transmission using a three node cooperative relay network assuming a block fading channel model. Channel information is fed back to the transmitter only in a causal fashion, so that the optimal power allocation strategy is only based on the current and past channel gains.We consider the two simplest schemes for information transmission using a three node (a source, a relay and a destination) relay network, namely the amplify and forward (AF) and decode and forward (DF) protocols. We use a dynamic programming based methodology to solve the (K-block delay constrained) expected capacity maximization problem with a short term (over K blocks) sum power (total transmission power of the source and the relay) constraint. Furthermore, two simple power allocation schemes for high and low SNR situations are proposed. Extensive numerical results are presented for Rayleigh fading channels, including results demonstrating the accuracy of the high/low SNR approximation based power allocation schemes

Description of parameters in the evolutionary model and the ranges used in the Monte Carlo simulations.

<p>The simulations drew values uniformly across these parameter ranges.</p

Model analysis illustrating the scope for cooperative mothers.

<p>The upper row describes a deterministic process of the evolutionary dynamics of the three female strategies: Independent Mother (IM), Opportunistic Mother (OM), and Cooperative Mother (CM). The gray region is when selection favors CM, white region is when OM is favored, and the thicker dark line is where the fitness of OMs and IMs are the same. Panels (a)–(c) assume parameter values , , , , , , and . However panel (a) assumes no kin selection () and panel (b) prescribes weak kin selection (), and panel (c) specifies strong kin selection (). The bottom row of panels describes the basin of attraction for Cooperative Mothers through stochastic simulation as a function of the repeated interaction parameter (panel (d)), level of kin selection (panel (e)), and the effect of alloparental care (panel (f)). The position of the unstable equilibrium between OM and CM females shown in the ternary plots above defines the basin of attraction. The dashed curves are 95% confidence bounds around the mean (solid line) computed by taking 1000 random uniform parameter values within the ranges reported in <a href="http://www.plosone.org/article/info:doi/10.1371/journal.pone.0083667#pone-0083667-t001" target="_blank">Table 1</a> for each value of , , and on the horizontal axis for panels (d)–(f), respectively.</p