Abstract
We define an evolutionary process of “economic Darwinism” for playing the field, symmetric games. The process captures two forces. One is “economic selection”: if current behavior leads to payoff differences, behavior yielding lowest payoff has strictly positive probability of being replaced by an arbitrary behavior. The other is “mutation”: any behavior has at any point in time a strictly positive, very small probability of shifting to an arbitrary behavior. We show that behavior observed frequently is in accordance with “evolutionary equilibrium”, a static equilibrium concept suggested in the literature. Using this result, we demonstrate that generally under positive (negative) externalities, economic Darwinism implies even more under- (over-)activity than does Nash equilibrium.
| Originalsprog | Engelsk |
|---|---|
| Tidsskrift | Theory and Decision |
| Vol/bind | 70 |
| Udgave nummer | 3 |
| Sider (fra-til) | 385-398 |
| Antal sider | 14 |
| ISSN | 0040-5833 |
| DOI | |
| Status | Udgivet - mar. 2011 |
Emneord
- Det Samfundsvidenskabelige Fakultet
- evolutionary game theory
- Darwinian evolution
- economic selection
- mutation
- evolutionary equilibrium
- stochastic stability