Evolution, Learning, and Economic Institutions

点击翻译按钮获取中文摘要

The basic phenomenon studied is social learning, and the ways in which social learning generates social institutions and norms endogeneously. Social learning occurs when individuals in a large population interact randomly, and then adjust their behavior based on information about their past experiences and what others in the population are doing. The focus is on the dynamics of such a process, and on the aggregate patterns of behavior that emerge over time. The project is particularly interested in situations where these aggregate patterns correspond to recognizable economic and social patterns of behavior, such as forms of economic contracts, rules governing government market transactions, and norms of behavior in social interactions. The first and primary objective is to compare the predictions of evolutionary game theory with the development of specific kinds of economic contracts. The study focuses on incentive contracts between principals and agents, particularly real estate commissions, contingency fees in the law, and crop sharing contracts in agriculture, for which both time-series and cross-section data exist. The starting point of this research is previous work of the principal investigator on evolutionary properties of distributive bargaining games. This framework is extended by explicitly modeling agents' opportunity costs, by incorporating uncertainty into the output function, by allowing the agents to bargain over multiple dimensions of the contract, and by giving a more detailed treatment of the process by which they gather information. The general goal is to show how patterns of inertia, change, and regional variations in these kinds of contracts can be illuminated by evolutionary arguments, and to show how these patterns differ from those predicted by neoclassical equilibrium models. The second part examines the robustness of evolutionary selection results under different specifications of the agents' learning rules, and in particular their degree of rationality. The third part examines the idea that the structure of social and economic interactions in general -- the rules of the game -- can also be explained, at least in part by evolutionary arguments. It is conjectured that efficient institutions are more stable (in an evolutionary sense) than inefficient ones; moreover their payoffs exhibit a central tendency effect -- they tend to lie toward the middle of the feasible payoff set as opposed to the extremes. This result has implications not only for the form of economic institutions (e.g., forms of contracts), but more generally for the welfare properties of different forms of social organization, and connects with prominent ideas of distributive justice in the philosophy and game theory literatures.