So in my math econ class we're doing a lot of set and relation stuff, and so we're talking a lot about preferences for applications. It made me think of an interesting research agenda: looking at the evolution of economic rationality.
Certainly rationality didn't spring fully formed from human beings. But is it inherent in all animals? It doesn't seem like it would be hard to test a few basic things - transitivity of preferences, diminishing marginal utility, etc. - on a wide variety of animals with food, toys, etc.. My understanding is our knowledge of the genetics of existing animals helps us to map evolutionary trees and identify where certain traits evolved. It seems to me we could just as easily use data on animal preference relations to map the evolution of economic rationality too. The real leap with humans has been the propensity to truck, barter, and exchange. But presumably other elements of our economic behavior (which is really just allocative behavior - all animals do that) would go much deeper.
Has anyone tried this? I'm sure there's been some work done on animal preferences (in fact I know of work on primate preferences), but I doubt the evolution of economic rationality has been looked at.
Thursday, September 29, 2011
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Isn't there a whole field called evolutionary economics?
ReplyDeleteI'm not sure I'd call it a field so much as an approach to economics. Evolutionary economics emphasizes evolutionary processes that operate out of equilibrium and may not tend toward an equilibrium. This is all fine, but I think the contrast that these people make with mainstream economics is too stark. They often learn some initial equilibrium material and decide it's unrealistic. Sure it is - but the whole point of outlining a system like that is to identify the dynamics when you're out of equilibrium. If evolutionary economics wants to point out that some of that can feedback on itself and lead to constant change, then fine. But you don't need to abandon a mainstream approach to get that result.
ReplyDeleteAnyway - all that is very different from asking the question "how did the way that man acts as we understand it in the economy today evolve". If any existing field covers that sort of thing it would be something like behavioral economics.
If you think of what happens inside of an animal as a production process, then "diminishing marginal utility" is fine but is has not much to do with consumer economics as we think of it anymore. Many other things in economics are just assumptions to make things easy and it seems to me that you are now treating them as factual behavioral mechanisms. For example, we assume for simplicity that there is no satiation in any good. That's just fine for predicting behavior, but not realistic.
ReplyDeleteI'm not sure what you mean. Are you suggesting that the instinctual nature of animal choice makes thinking about these as "preferences" wrong? If that's the case I could agree with that, but I'd think that by the same token much of our preferences probably amount to the same thing.
ReplyDeleteI agree that these are mostly just assumptions. But they aren't baseless assumptions. Certain assumptions, like transitivity, seem to hold up fairly well as actual descriptions of behavior and it also seems to coincide with "rationality". Something like diminishing utility is probably even more neurological and less dependent on rational preferences. But it would still be interesting to see if it's observed elsewhere.
I think you're also completely missing exactly what I'm suggesting. Far from ruling on whether these are "realistic" or not, I'm suggesting that it would be interesting to see the extent to which they are realistic. Clearly they aren't entirely unrealistic. Have they been less realistic in the past? That seems likely to me, but I don't really now how long-standing these properties of preferences are.
Look at the work of Arthur Robson. I wouldn't say that his work is "outside the mainstream" or anything in terms of methodology.
ReplyDeletehere is his webpage http://www.sfu.ca/~robson/
"This is all fine, but I think the contrast that these people make with mainstream economics is too stark."
ReplyDeleteThat's fine, and other people find the contrast just right. Here's a question - do you consider yourself a lumper or a divider? I am definitely a divider (for the most part).
"Anyway - all that is very different from asking the question 'how did the way that man acts as we understand it in the economy today evolve'. If any existing field covers that sort of thing it would be something like behavioral economics."
Actually, it would be Adam Smith, Karl Marx, etc. You really can't scratch a way of looking at the world without finding some sort of ideas about the historical evolution about that world. "Evolution" has been "in the air" for a long time.
I don't consider myself either. I usually don't like dividing that distorts position A in order to make position B look better. That's strawmaning (I say "usually" because strawmaning can have important heuristic or pedagogical benefits). I don't like lumping that's inappropriate and papers over important differences. I imagine I am more of a lumper than you, but that's because I'm just right and you're too much of a divider :)
ReplyDeletere: "Actually, it would be Adam Smith, Karl Marx, etc. You really can't scratch a way of looking at the world without finding some sort of ideas about the historical evolution about that world."
No Gary, sorry. Again if you interpreted me as writing "no one really thinks about the history of these things" I just have to throw up my hands once again and say "how the hell did Gary read that into it??". What I am saying is that as species evolved over millions of years they acquired different traits and it would be interesting to know that deep evolutionary history of economic rationality. Did Marx or Smith think about history and development of modern economic behavior? Sure. Smith talks about the "savages" a lot and I'm sure Marx thinks in these terms too (he certainly does with modes of production, and perhaps he has other more pre-modern musings too).
But neither of them suggested looking into what I'm talking about and nothing in my post ought to be construed as me thinking nobody has talked about historical development and evolution.
Anonymous - Robson looks fascinating - thanks for the link!!!
ReplyDelete"Again if you interpreted me as writing 'no one really thinks about the history of these things' I just have to throw up my hands once again and say 'how the hell did Gary read that into it??'."
ReplyDeleteIt is easy to interpret you as saying that actually.
"What I am saying is that as species evolved over millions of years they acquired different traits and it would be interesting to know that deep evolutionary history of economic rationality."
Marx actually talks in terms like that.
Smith has his own evolution of society through stages (indeed, it is a basic part of the Scottish enlightenment); so he talks about more than merely "savages" - he has a theory of human development (a four stage theory). So does Hume for that matter.
"But neither of them suggested looking into what I'm talking about..."
I wouldn't say that.
re: "It is easy to interpret you as saying that actually."
ReplyDeleteYou are the only one that seems to have a problem with it. Certainly the only one that has a problem with it so consistently. And the misinterpretation always seems to work in favor of me looking naive, which is another good reason to be suspicious.
re: "Smith has his own evolution of society through stages (indeed, it is a basic part of the Scottish enlightenment); so he talks about more than merely "savages" - he has a theory of human development (a four stage theory). So does Hume for that matter."
Exactly, but their stages are well within the scope of the history of homo sapiens and with what they're talking about they're often cross referencing with less developed contemporaries. It has nothing whatsoever to do with what I'm talking about here.
re: "I wouldn't say that."
Then just show me where, Gary. Just show me. When did they offer anything like asking "I wonder if a mouse's preference relations are transitive?". Maybe Marx might have said a tid-bit along these lines. Maybe. But I've never heard of it if he did. Quit the duplicity and just show me. I don't know why you have to have this same fight every single day. Just show me.
Trust me, if they DID say something like that I'd find it very interesting and repost it with great fanfare.
ReplyDeleteWhat is not worth reposting with great fanfare is what everybody already knows about economists who have speculated on the development of "economic man" through human history and pre-history.
I'm tracking it down now, but Marx has written something about the evolution of our hands, etc. - and the relationship to work. I'm not sure he's thought or written anything about the evolution of preferences or economic choice.
ReplyDeleteYou are the only one that seems to have a problem with it."
ReplyDeleteLots of people "misinterpret" what you say actually. However, even in that were the case, would it even matter? Just simply say, that's not what I mean, this is what I mean, end of story.
"Then just show me where, Gary. Just show me."
The notion of biological evolution in the course of human affairs goes back to at least Hobbes, etc. (not surprising since so much of how we mentally order our world comes straight out of the late Middle Ages-Early Modern period). Comments like his and others in part explain the general hysteria of the 1600s thru the 1800s regarding atheists; atheists are everywhere and out to get your kids was a fairly common idea at the time. This concept just didn't pop up out of Darwin's and Wallace's head in mid-19th century. It is derived from the increasingly materialistic explanations of how man became man and how man became a member of a society of people.
If you'd like I could dig out my dog eared copy of _Leviathan_ and quote you various passages where Hobbes discusses the relationship between nature and humanity.
Look at this way, there is a reason why concepts like "The Great Chain of Being," etc. come about (and natural theology as it was called was all the rage amongst apologists at the time); they aren't argued in a vacuum - they are arguments against naturalistic, that is evolutionary, claims of biological development. Now, none of these are Darwinian in nature (how Darwin described such in 1859 that is - descent with modification), but they are an effort to say, hey, human beings (indeed, all biological organisms), were fashioned by nature somehow and thus humans have some attributes when in intercourse with other people that is the result of such.
Is this a satisfactory response?
ReplyDeleteMore seriously, I've mentioned the work of Frans De Waal, the primatologist and ethologist, to you before[*]. I believe that he has done a lot of work regarding rationality (in the purely monotonic preference sense), selfishness, co-operation among primates. Even if it doesn't quite hit the spot, his work is fascinating enough to make it good reading in of itself.
[*] E.g. Here.