Applying evolutionary methods in economics: progress or pitfall?
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Applying evolutionary methods in economics: progress or pitfall? Vaios Koliofotis1
© The Author(s) 2020
Abstract The Darwinian theory of evolution has arguably become an important building block for experimental and theoretical economists. According to Burnham (J Econ Behav Org 90:S113–S127, 2013), it is possible to formulate novel hypotheses and predictions about human preferences, on the basis of what patterns of behavior would have been adaptive in the ancestral environment. After clarifying two theoretical concepts, the Adaptively Relevant Environment and fitness maximization, I argue that multiple scientifically plausible hypotheses about human preferences are compatible with evolutionary models that target behavior. Moreover, I propose a refinement of Burnham’s method based on theoretical resources provided by the indirect evolutionary approach. Economists apply or build evolutionary models of their own that target particular features of human psychology and cognition. Such models may reduce the number of plausible hypotheses to allow for rigorous scientific testing in laboratory or field experiments. Keywords Evolution · Indirect evolutionary approach · Social preferences · Methodology JEL classification B52 · B41 · C79 · D01 · D64
1 Introduction Over the past decades there is a growing interest in building bridges between evolutionary biology and economics. Widely cited studies published in leading economic journals apply evolutionary arguments and theories to explain and discover features of human psychology and cognition that have a role in economic behavior (for recent reviews, see Collins et al. 2016; Burnham et al. 2016). * Vaios Koliofotis [email protected]; [email protected] 1
Erasmus Institute for Philosophy and Economics, Erasmus University Rotterdam, Rotterdam, Netherlands
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V. Koliofotis
Many economists hold that the insights of evolutionary theory might be relevant for economics in that they can help improve our understanding of human preferences and behavior. Looking back into the writings of Jack Hirshleifer, a pioneer economist that examined what evolutionary biology can contribute to economics, “[t]he programmatic contention here is that such preference patterns, despite seemingly arbitrary elements, have survived because they mainly are adaptive to environmental conditions” (Hirshleifer 1977, p. 18). In the economic literature human preferences are taken as given. For Jack Hirshleifer, evolutionary theory could help economics with identifying what preferences we have and explaining why they survived selection processes (Hirshleifer 1977, p. 17). It is still unclear, however, what method can facilitate economists in formulating evolutionary hypotheses about human preferences and behavior. Terence Burnham presents a promising evolutionary method that aspires to reconcile different sub-fields within economics (Burnham 2013). In this paper, I set aside prospects for a broad integration within economics or among the social sciences. My relatively modest aim is
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