Module 1:Module 1:Evolution and EconomicsEvolution and Economics

The Development of The Development of Economic SystemsEconomic Systems

From an Evolutionary From an Evolutionary Perspective…Perspective…

Isolate the basic biological aspects.Isolate the basic biological aspects. Explore how it has been altered Explore how it has been altered

throughout a species’ (our) throughout a species’ (our) evolutionary heritage.evolutionary heritage.

economiceconomicss2. The branch of knowledge (now

regarded as one of the social sciences) that deals with the production, distribution, consumption, and transfer of wealth; the application of this discipline to a particular sphere; (also) the condition of a state, etc., as regards material prosperity; the financial considerations attaching to a particular activity, commodity, etc.

Game Theory and Biology:Game Theory and Biology:Optimal Foraging TheoryOptimal Foraging Theory

Game Theory and Biology:Game Theory and Biology:Optimal Foraging TheoryOptimal Foraging Theory

E = 500 cal.

T = 15 min.

E = 250 cal.

T = 5 min.

Game Theory and Biology:Game Theory and Biology:Optimal Foraging TheoryOptimal Foraging Theory

Food ItemFood Item E/TE/T

3030

2020

Game Theory and Biology:Game Theory and Biology:Optimal Foraging TheoryOptimal Foraging Theory

Food ItemFood Item E/TE/T

3030

2020

Eaten:Only

Game Theory and Biology:Game Theory and Biology:Optimal Foraging TheoryOptimal Foraging Theory

Food ItemFood Item E/TE/T

3030

2020

Eaten:Only

Game Theory and Biology:Game Theory and Biology:Optimal Foraging TheoryOptimal Foraging Theory

Food ItemFood Item E/TE/T

3030

2020

Eaten: &

Game Theory and Biology:Game Theory and Biology:Optimal Foraging TheoryOptimal Foraging Theory

Food ItemFood Item E/TE/T

3030

2020

Eaten: &

Game Theory and Biology:Game Theory and Biology:One-on-One InteractionsOne-on-One Interactions

John Maynard Smith:John Maynard Smith: Hawk-Dove ModelsHawk-Dove Models

D

H

D H

½Food

D

H

D H

Nada½Food

D

H

D H

Nada½Food

Food

D

H

D H

Nada½Food

Food

½Food Minus Cost

GraphGraph

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1

Proportion of Altruists

Rel

ativ

e Fi

tnes

s

Altruist Morph Selfish Morph

Rela

tive

Fit

ness

Game Theory and Biology:Game Theory and Biology:One-on-One InteractionsOne-on-One Interactions

Tit-for-TatTit-for-Tat strategy cooperates with strategy cooperates with cooperators and defects on cooperators and defects on defectors.defectors.

T

H

T H

½Food

T

H

T H

½Food

½Food Minus Cost

D

H

D H

½Food

½Food Minus Cost

½Food Minus Cost

D

H

D H

½Food

½Food Minus Cost

½Food Minus Cost

½Food Minus Cost

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1

Proportion of Tit-for-Tat

Rel

ativ

e Fi

tnes

s

Tit-for-Tat Selfish

Rela

tive

Fit

ness

Tit-for-Tat in Nature:Tit-for-Tat in Nature:BirdsBirds

Tit-for-Tat in Nature:Tit-for-Tat in Nature:FishFish

Tit-for-Tat in Nature:Tit-for-Tat in Nature:PrimatesPrimates

Game Theory and Biology:Game Theory and Biology:Why Begin Cooperating?Why Begin Cooperating?

E = 500 cal.

T = 20 min.

E = 4000 cal.

T Alone = N/A

T w/Help = 30 min.

Game Theory and Biology:Game Theory and Biology:Why Begin Cooperating?Why Begin Cooperating?

Game Theory and Biology:Game Theory and Biology:Why Begin Cooperating?Why Begin Cooperating?

Game Theory and Biology:Game Theory and Biology:Why Begin Cooperating?Why Begin Cooperating?

Cooperation and CultureCooperation and Culture

Player 1 can then give as much or as little of the money as he or she wants

to Player 2.

Player 2 can approve of the

amount given, and both keep the

money.

Evolutionary Game Theory:Evolutionary Game Theory:Ultimatum GameUltimatum Game

Player 1 Player 2

Or Player 2 can refuse the offer, and no one gets

any money.

QuichuaQuichua

Individual farmers of the Amazon Individual farmers of the Amazon Basin.Basin.

LamaleraLamalera

Whale hunters from Indonesia.Whale hunters from Indonesia.

KazakhKazakh

Pastors of Mongolia.Pastors of Mongolia.

Au and GnauAu and Gnau

Foraging peoples from New Guinea.Foraging peoples from New Guinea.

Social Dependency

What Explains the Variation?What Explains the Variation?

Social Integration

Make CBG-Only MapMake CBG-Only Map

First Mover: Plays “blindly”First Mover: Plays “blindly”

Second Mover: Plays with Second Mover: Plays with knowledge of first mover’s behavior.knowledge of first mover’s behavior.

1) How would you play as a first 1) How would you play as a first mover?mover?

2) How would you play as a second 2) How would you play as a second mover if your partner cooperated?mover if your partner cooperated?

3) How would you play as a second 3) How would you play as a second mover is your partner did not mover is your partner did not cooperate?cooperate?

Social Dependency

Predictors of Cooperation:Predictors of Cooperation:A World in a CityA World in a City

Inverse of Median Income

N’bhd Quality

Social Integration

Cooperation and SubculturesCooperation and Subcultures

Social Dependency

Predictors of Cooperation:Predictors of Cooperation:In-Class Study #1In-Class Study #1

Risk Taking Behavior

Trusting People

Social Integration

How to Maintain How to Maintain Cooperation?Cooperation?

ProsocialSelfish

How to Maintain How to Maintain Cooperation?Cooperation?

ProsocialSelfish

How to Maintain How to Maintain Cooperation?Cooperation?

ProsocialSelfish

How to Maintain How to Maintain Cooperation?Cooperation?

ProsocialSelfish

How to Maintain Cooperation?:How to Maintain Cooperation?:ImitationImitation

How to Maintain Cooperation?:How to Maintain Cooperation?:PunishmentPunishment

How to Maintain Cooperation?:How to Maintain Cooperation?:PunishmentPunishment

Moralistic PunishersMoralistic Punishers Prosocial individuals who also punish.Prosocial individuals who also punish.

Selfish PunishersSelfish Punishers Individuals who are generally selfish but Individuals who are generally selfish but

punish other selfish individuals.punish other selfish individuals.

Punishment:Punishment:Moralistic PunishmentMoralistic Punishment

Punishment:Punishment:Moralistic PunishmentMoralistic Punishment

Punishment:Punishment:Selfish PunishmentSelfish Punishment

Punishment:Punishment:In-Class Study #2In-Class Study #2

Selfish Selfish PunishersPunishers

More MalesMore Males Invest More Invest More in in PunishmentPunishment

Moralistic Moralistic PunishersPunishers

More More FemalesFemales

Invest Less Invest Less in in PunishmentPunishment

Evolution & the Evolution & the MarketplaceMarketplaceMarket:

A place where trade of resources occurs.

Markets & Evolution:Markets & Evolution:Multiple Interactions and Supply-Multiple Interactions and Supply-

DemandDemand

Markets & Evolution:Markets & Evolution:BarteringBartering

Markets & Evolution:Markets & Evolution:Bartering & the Bartering & the Invisible HandInvisible Hand

Adam SmithAdam Smith

The Wealth of NationsThe Wealth of Nations

(1776)(1776)

Self-interest is Self-interest is natural.natural.Competition is good Competition is good for society.for society.

Markets & Evolution:Markets & Evolution:Multiple Interactions and Supply-Multiple Interactions and Supply-

DemandDemand

Markets & Evolution:Markets & Evolution:MoneyMoney

Markets & Evolution:Markets & Evolution:InvestmentInvestment

Markets & Evolution:Markets & Evolution:InvestmentInvestment

Investors

Borrowers

Assumed Profits

Markets & Evolution:Markets & Evolution:InvestmentInvestment

Resources

Inflation

Markets & Evolution:Markets & Evolution:RegulationRegulation

Credit markets don’t have natural Credit markets don’t have natural emotional controls!emotional controls!

Individual interests destroy the group Individual interests destroy the group system!system!

Social integration again…?Social integration again…?