The Evolution of Social Learning and its Economic Consequences

TY - JOUR

T1 - The Evolution of Social Learning and its Economic Consequences

AU - Bossan, Benjamin

AU - Jann, Ole

AU - Hammerstein, Peter

PY - 2015/4/1

Y1 - 2015/4/1

N2 - We use an evolutionary model to simulate agents who choose between two options with stochastically varying payoffs. Two types of agents are considered: individual learners, who rely on trial-and-error methods, and social learners, who imitate the wealthiest sampled individual. Agents adapt to changing environments within one generation by using their respective learning strategy. The frequency of the agent types adapts between generations according to the agents' acquired wealth. During the course of evolution, social learning becomes dominant, resulting in three major effects: First, for better or worse, the decisions of social learners are more exaggerated than those of individual learners. Second, social learners react with a delay to changes in the environment. Third, the behavior of social learners becomes more and more detached from reality. We argue that our model gives insights into economic systems and markets.

AB - We use an evolutionary model to simulate agents who choose between two options with stochastically varying payoffs. Two types of agents are considered: individual learners, who rely on trial-and-error methods, and social learners, who imitate the wealthiest sampled individual. Agents adapt to changing environments within one generation by using their respective learning strategy. The frequency of the agent types adapts between generations according to the agents' acquired wealth. During the course of evolution, social learning becomes dominant, resulting in three major effects: First, for better or worse, the decisions of social learners are more exaggerated than those of individual learners. Second, social learners react with a delay to changes in the environment. Third, the behavior of social learners becomes more and more detached from reality. We argue that our model gives insights into economic systems and markets.

KW - Faculty of Social Sciences

KW - Evolution

KW - learning strategies

KW - market inefficiencies

KW - imitation

KW - natural selection

U2 - 10.1016/j.jebo.2015.01.010

DO - 10.1016/j.jebo.2015.01.010

M3 - Journal article

SN - 0167-2681

VL - 112

SP - 266

EP - 288

JO - Journal of Economic Behavior & Organization

JF - Journal of Economic Behavior & Organization

ER -