Essays on Economic Change and its Theory
Modern economies never come to rest. From institutions to activities of production, trade, and consumption, everything is locked in processes of perpetual transformation – and so are our daily lives. Why and how do such transformations occur? What can economic theory tell us about these changes and where they might lead? Ulrich Witt’s book discusses why evolutionary concepts are necessary to answer such questions. While economic evolution is in many respects unique, it nonetheless needs to be seen within the broader context of natural evolution. By exploring this complex relationship, Rethinking Economic Evolution demonstrates the significance of an evolutionary economic theory.
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Chapter 11: Observational learning, group selection, and societal evolution
The core problem of any group selection hypothesis is the possibility that pro-social individual behavior contributing to a selection advantage for the group as a whole is potentially subject to free-riding. If group behavior and, hence, the conditions for group selection change through imitation and migration between groups, as argued in Hayek's theory of societal evolution, the explanation of group selection needs to account for the individuals' cognitively reflected motivation to adopt pro-social behavior in the face of free-riding. To do so a game-theoretic model is suggested that incorporates observational learning as a mechanism of acquiring, and choosing between, strategies.
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