Evolutionary Game Theory and Thorstein Veblen’s Evolutionary Economics: Is EGT Veblenian?

Villena, Mauricio G. and Villena, Marcelo J. (2004): Evolutionary Game Theory and Thorstein Veblen’s Evolutionary Economics: Is EGT Veblenian? Published in: Journal of Economic Issues , Vol. XXXVII, No. 3 (September 2004): pp. 585-610.

Abstract

This essay provides an approach to the analysis of the link between Thorstein Veblen's evolutionary approach and evolutionary game theory (EGT). We shed some light on the potential contribution of Veblen's theory of socioeconomic evolution to the discussion on the application of EGT to social environments. We also investigate to what extent elements of EGT can be used to formalize some of the basic evolutionary principles proposed by Veblen. The methodological imperatives laid down by Veblen, defining an evolutionary approach, are presented. We provide an analytical framework that allows the evaluation of EGT in terms of Veblen's evolutionary approach. To better understand the main principles and rationale behind EGT and how it can be applied as a tool for analyzing issues on the diversity, interaction, and evolution of social systems, we discuss this nontraditional approach and its basic concepts. Finally, the main characteristics of EGT are contrasted with Veblen's principles.

• Item Type: MPRA Paper
• Language: English
• Keywords: Evolution; Evolutionary Economics; Evolutionary; Game Theory; Games
• Subjects: B - History of Economic Thought, Methodology, and Heterodox Approaches > B3 - History of Economic Thought: Individuals > B31 - Individuals; B - History of Economic Thought, Methodology, and Heterodox Approaches > B5 - Current Heterodox Approaches > B52 - Institutional ; Evolutionary; B - History of Economic Thought, Methodology, and Heterodox Approaches > B1 - History of Economic Thought through 1925 > B15 - Historical ; Institutional ; Evolutionary; C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C73 - Stochastic and Dynamic Games ; Evolutionary Games ; Repeated Games

References

Andersen, Ole Winckler, and Kirsten Bregn. “New Institutional Economics: What Does It Have to Offer?” Review of Political Economy 4, no. 4 (1992): 484–497.

Argyrous, George, and Rajiv Sethi. “The Theory of Evolution and the Evolution of Theory: Veblen’s Methodology in Contemporary Perspective.” Cambridge Journal of Economics 20 (July 1996): 475–495.

Axelrod, Robert. “An Evolutionary Approach to Social Norms.” American Political Science Review 80, no. 4 (1986): 1095–1111.

Banerjee, Abhijit, and Jörgen Weibull. “Evolutionary Selection and Rational Behavior.” In Rationality and Learning in Economics, edited by A. Kirman and M. Salmon. Oxford: Basil Blackwell, 1994.

Bester, Helmut, and Werner Güth. “Is Altruism Evolutionarily Stable?” Journal of Economic Behavior and Organization 34, no. 2 (1998): 193–209.

Binmore, Ken. Foreword to Evolutionary Game Theory, by Jörgen Weibull. Cambridge: MIT Press, 1996.

Binmore, Ken, and Larry Samuelson. “An Economist’s Perspective on the Evolution of Norms.” Journal of Institutional and Theoretical Economics 150 (1994): 45–63.

Björnerstedt, Jonas, and Jörgen Weibull. “Nash Equilibrium and Evolution by Imitation.” In The Rational Foundations of Economic Behaviour, edited by K. Arrow et al. Macmillan, 1996.

Bomze, Immanuel. “Non-Cooperative 2-Person Games in Biology: A Classification.” International Journal of Game Theory 15 (1986): 31–59.

Bowles, Samuel, and Herbert Gintis. “The Evolution of Strong Reciprocity.” Mimeo, University of Massachusetts at Amherst, 1999.

Dekel, Eddie, and Suzanne Scotchmer. “On the Evolution of Optimizing Behavior.” Journal of Economic Theory 57(1992): 392–406.

Dufwenberg, Martin, and Werner Güth. “Indirect Evolution vs. Strategic Delegation: A Comparison of Two Approaches to Explaining Economic Institutions.” European Journal of Political Economy 15 (1999): 281–295.

Eaton, B. Curtis. “Review of Nelson and Winter: An Evolutionary Theory of Economic Growth.” Canadian Journal of Economics 17, no. 4 (1984): 868 871.

Gintis, Herbert. Game Theory Evolving: A Problem-Centered Introduction to Modeling Strategic Interaction. Princeton, N.J.: University of Princeton Press, 2000.

Gintis, Herbert. “Beyond Selfishness in Modeling Human Behavior.” In Evolution and the Capacity for Commitment, edited by Randolph M. Nesse. New York: Russell Sage, 2001.

Güth, Werner. “An Evolutionary Approach to Explaining Cooperative Behavior by Reciprocal Incentives.” International Journal of Game Theory 24 (1995): 323–344.

Güth, Werner, and Menahem Yaari. “Explaining Reciprocal Behavior in Simple Strategic Games: An Evolutionary Approach.” In Explaining Forces and Changes: Approaches to Evolutionary Economics, edited by U. Witt. University of Michigan Press, 1992.

Guttman, Joel. “On the Evolutionary Stability of Preferences for Reciprocity.” European Journal of Political Economy 16 (2000): 31–50.

Hargreaves Heap, Shaun P., and Yanis Varoufakis. Game Theory: A Critical Introduction. London: Routledge, 1995.

Henrich, Joseph, Robert Boyd, Samuel Bowles, Colin Camerer, Ernst Fehr, Herbert Gintis, and Richard McElreath. “Cooperation, Reciprocity, and Punishment in Fifteen Small-Scale Societies.” American Economic Review 91 (May 2001): 73–78.

Hodgson, Geoffrey M. Economics and Institutions: A Manifesto for a Modern Institutional Economics. Cambridge: Polity Press, 1988.

Hodgson, Geoffrey M. “Institutional Economic Theory: The Old versus the New.” Review of Political Economy 1, no. 3 (1989): 249–269.

Hodgson, Geoffrey M. “Thorstein Veblen and Post-Darwinian Economics.” Cambridge Journal of Economics 16 (1992): 285–301.

Hodgson, Geoffrey M. Economics and Evolution: Bringing Life Back into Economics. Cambridge, U.K., and Ann Arbor, Mich.: Polity Press and University of Michigan Press, 1993.

Hodgson, Geoffrey M. Evolution and Institutions: On Evolutionary Economics and the Evolution of Economics. Cheltenham: Edward Elgar, 1999.

Kreps, Daniel M. Game Theory and Economic Modelling. Oxford: Oxford University Press, 1997.

Lane, David A. “Artificial Worlds and Economics.” Parts 1 and 2. Journal of Evolutionary Economics 3, nos. 2, 3 (1993): 89–108; 177–197.

Mailath, George J. “Introduction: Symposium on Evolutionary Game Theory.” Journal of Economic Theory 57 (1992): 259–277.

Mailath, George J. “Do People Play Nash Equilibrium.” Journal of Economic Literature 36 (1998): 1347–1374.

Matsui, Akihiko. “On Cultural Evolution: Social Norms, Rational Behavior, and Evolutionary Game Theory.” Journal of the Japanese and International Economies 10 (1996): 262–294.

Maynard Smith, John. “The Theory of Games and the Evolution of Animal Conflicts.” Journal of Theoretical Biology 47 (1974): 209–221.

Maynard Smith, John. Evolution and the Theory of Games. Cambridge: Cambridge University Press, 1982.

Maynard Smith, John, and George Price. “The Logic of Animal Conflicts.” Nature 246 (1973): 15–18.

McKenzie, Alexander J. “Evolutionary Game Theory.” The Stanford Encyclopedia of Philosophy, edited by Edward N. Zalta, 2002. http://plato.stanford.edu/archives/sum2003/entries/game-evolutionary/.

Neale, Walter C. “Institutions.” In The Elgar Companion to Institutional and Evolutionary Economics A-K, edited by Geoffrey M. Hodgson, Warren J. Samuels, and Marc R. Tool. Hampshire, England: Edward Elgar Publishing Limited, 1994.

Rutherford, Malcolm. “What Is Wrong with the New Institutional Economics (and What Is Still Wrong with the Old)?” Review of Political Economy 1, no. 3 (1989): 299–318.

Rutherford, Malcolm. Institutions in Economics: The Old and the New Institutionalism. Cambridge: Cambridge University Press, 1994.

Rutherford, Malcolm. “Veblen’s Evolutionary Programme: A Promise Unfulfilled.” Cambridge Journal of Economics 22 (1998): 463–477.

Samuelson, Larry. Evolutionary Games and Equilibrium Selection. Cambridge: MIT Press, 1997.

Selten, Reinhard. “A Note on Evolutionarily Stable Strategies in Asymmetric Animal Conflicts.” Journal of Theoretical Biology 84 (1980): 93–101.

Selten, Reinhard.“Evolutionary Stability in Extensive Two-Person Games.” Mathematical Social Sciences 5 (1983): 269–363.

Selten, Reinhard. “Evolution, Learning, and Economic Behavior.” Games and Economic Behavior 3 (1991): 3–24.

Sethi, Rajiv. “Evolutionary Stability and Social Norms.” Journal of Economic Behavior and Organization 29, no. 1 (1996): 113-140.

Sethi, Rajiv, and Eswaran Somanathan. “The Evolution of Social Norms in Common Property Resource Use.” American Economic Review 86, no. 4 (1996): 766–788.

Silverberg, Gerald. “Evolutionary Modeling in Economics: Recent History and Immediate Prospects.” Prepared for the workshop on “Evolutionary Economics as a Scientific Research Programme,” Stockholm, May 26–27, 1997.

Silverberg, Gerald, and Bart Verspagen. “From the Artificial to the Endogenous: Modelling Evolutionary Adaptation and Economic Growth.” In Behavorial Norms, Technological Progress and Economic Dynamics: Studies in Schumpeterian Economics, edited by E. Helmstädter and M. Perlman. Ann Arbor: University of Michigan Press, 1996.

Sugden, Robert. The Economics of Rights, Cooperation, and Welfare. Oxford: Basil Blackwell, 1986.

Sugden, Robert. “Spontaneous Order.” Journal of Economic Perspectives 3, no. 4 (1989): 85–97.

Swinkels, Jeroen. “Evolution and Strategic Stability: From Maynard Smith to Kohlberg and Mertens.” Journal of Economic Theory 57 (1992): 333–342.

Taylor, Peter D., and Leo B. Jonker. “Evolutionary Stable Strategies and Game Dynamics.” Mathematical Biosciences40 (1978): 145–156.

Thomas, Bernhard. “On Evolutionarily Stable Sets.” Journal of Mathematical Biology 22 (1985): 105–115.

Van Damme, Eric. Stability and Perfection of Nash Equilibria. Berlin: Springer Verlag, 1987.

Van Damme, Eric. “Evolutionary Game Theory.” European Economic Review 38 (1994): 847–858.

Veblen, Thorstein B. “Why Is Economics Not an Evolutionary Science?” Quarterly Journal of Economics 12 (July 1898): 373–397.

Vega-Redondo, Fernando. Evolution, Games and Economic Behaviour. Oxford: Oxford University Press, 1996.

Villena, Mauricio G., and Marcelo J. Villena. “On Veblen’s Evolutionary Economics.” Mimeo, Selwyn College, Cambridge University, 2002.

Villena, Mauricio G., and Marcelo J. Villena. “On the Evolution of Interdependent Preferences in a Common Property Resource Game.” Mimeo, Selwyn College, Cambridge University, 2003.

Vromen, Jack. Evolution and Efficiency: An Inquiry into the Foundations of the “New Institutional Economics.” Delft: Eburon, 1994.

Weibull, Jörgen. Evolutionary Game Theory. London: The MIT Press, 1995.

Weibull, Jörgen. “What Have We Learned from Evolutionary Game Theory So Far?” Mimeo, Stockholm School of Economics, 1998.

Wesson, Joseph P. “The Teleological Impulse: Thorstein Veblen, the Philosophy of Science, and Existentialism.” Mimeo, Department of Economics, Finance, and International Business, Metropolitan State University, Minneapolis, Minnesota, 1999.

Wisman, Jon. D. “Economic Knowledge, Evolutionary Epistemology, and Human Interests.” Journal of Economic Issues 23, no. 2 (1989): 647–656.