Economic Darwinism
Research output: Working paper › Research
Standard
Economic Darwinism. / Sloth, Birgitte; Whitta-Jacobsen, Hans Jørgen.
Cph. : Centre for Industrial Economics, Department of Economics, University of Copenhagen, 2006.Research output: Working paper › Research
Harvard
APA
Vancouver
Author
Bibtex
}
RIS
TY - UNPB
T1 - Economic Darwinism
AU - Sloth, Birgitte
AU - Whitta-Jacobsen, Hans Jørgen
N1 - JEL Classification: C72
PY - 2006
Y1 - 2006
N2 - 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
AB - 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
KW - Faculty of Social Sciences
KW - evolutionary game theory
KW - Darwinian evolution
KW - mutation
KW - economic selection
KW - evolutionary equilibrium
KW - stochastic stability
M3 - Working paper
BT - Economic Darwinism
PB - Centre for Industrial Economics, Department of Economics, University of Copenhagen
CY - Cph.
ER -
ID: 312892