Evolutionary Game Theory and Behavioral Economics

Intro

With the increasing importance of mathematics in economics approaches, our project is to focus on the application of quantitative science to behavioral economics. Specifically, we will investigate the more sophisticated tools needed to develop more complicated economic models as the economic thoughts evolve. The economic paradigms of interest are the Walrasian paradigm, which dominated in the third quarter of the 20th century, and another economic paradigm which we refer to as “Bowles’ paradigm” for the sake of easy distinction (it does not necessarily mean that Samuel Bowles invented this paradigm).

Section Two - Walrasian Paradigm

assumes that individuals choose actions based on the far-sighted evaluation of their consequences based on preferences that are self-regarding and exogenously determined

social interactions take the exclusive form of contractual exchanges

that increasing returns to scale can be ignored in most applications and institutions do not evolve

institutions exist to facilitate trade

represents economic behavior as the solution to a constrained optimization problem faced by a fully informed individual in a virtually institution-free environment

Deduced a few strong predictions concerning the outcomes likely to be observed in the economy