Evolution in Economics and Biology Whittier College Interdisciplinary Lecture Ted Bergstrom October 25, 2005

1. Evolution inEconomics and BiologyWhittier CollegeInterdisciplinary LectureTed BergstromOctober 25, 2005

2. Prelude: Economics as Evolutionary Science • Economists have been unwitting creationists • Theory takes axiomatic approach to description of human nature • Axioms are typically quite arbitrarily selected • Platonic rationality • Behavioral this or that • Standard defense of ideal rationality—How else to find structure? • Proposed answer: Evolution

3. Will Darwinian thinking change economics? • I am betting that it will– and that this will engage economics much more deeply in the other biological and social sciences.

4. Central Features of Evolutionary Economics • Evolution of Fundamental Preferences • Selfishness vs altruism • Concern for relatives • Time Preference • Attitudes toward risk • Evolution of rationality itself • Evolution of institutions and beliefs—cultural evolution • Group selection versus individual selection

5. Evolutionary Economics of the Family • There is selection for behavior that maximizes reproductive success. • Broadly true whether transmission is genetic or cultural • Marital institutions • Inheritance and support of the elderly • Fraternal cooperation, sibling rivalry, parent-offspring conflict

6. Does Mother Nature Punish Rotten Kids?

7. A Cautionary Tale for Bad Children Carl Bergstrom Biology Department, University of Washington Ted Bergstrom Economics Department, UC Santa Barbara

8. Theories of Parent-Offspring Conflict in Biology • Genetic-based conflict of interest— Hamilton’s rule implies: In sexually reproducing species, individuals care half as much about their siblings as about themselves. Parents care equally about each of their children. Parents quarrel with their children about “Don’t be so selfish.”

9. The Parental Interest View Biologist, Richard Alexander argues that “Evolution selects for offspring that act to maximize their parents’ reproductive interest.” Economist, Gary Becker’s “Rotten Kid Theorem” reaches similar conclusion.

10. Alexander’s arguments • Animals who are overly greedy as children, will suffer the evolutionary penalty of having children that are overly greedy. Counter: (Sexual reproduction does not produce identical copies.) 2) Parents are “bigger, stronger, smarter.” Counter: Extortion

11. Parable of the Bleating Lamb • A Ewe lives for two years and has one lamb each year. • She weans her lamb at some age x. • The first lamb’s own survival probability is an increasing function of x. • The earlier she weans, the stronger the ewe will be when she bears her second lamb, so the second lamb’s survival probability is a decreasing function of x.

12. Survival Probability Tradeoff Lamb 2 M L1 Lamb 1

13. Opponents and Allies • Ewe wants to maximize sum of survival probabilities. • Lamb 1 wants to maximize a weighted average of own and Lamb 2’s survival probability, with twice as big a weight for self. • Lamb 2 wants to maximize weighted average with greater weight for self. But Lamb 2 is a passive player in this game. • Mother loves firstborn, but their interests are partly in conflict.

14. Finding preferred points Lamb 2 L2 M L1 Lamb 1

15. Genetic foundations of behavior • Suppose that sheep have genes that tell them what to do when they are lambs and other genes that tell them what to do when they are mothers. • Suppose (temporarily) that these genes are not “linked”, so that simultaneous mutations in the two behaviors are hard to maintain.

16. The Power of those who are Weak but Loved by the Strong • Lamb can not throw down its mother and force it to nurse? • Ewe is faster, stronger, smarter. • What can lamb do? • What do small children do? • Bleat loudly. • Call the Wolf.

17. First-born’s preferred Equilibrium • Suppose that genes that command firstborn lambs tell them to call the wolf unless they can nurse to their preferred age. • In the same population, mothers are “soft” and nurse the firstborn whenever it bleats. • This is an equilibrium. • A mutant Mom who is hard-nosed will lose her babies to the wolves. Her traits will not be passed on. • Mutant first-born who are less demanding will not pass on their genes as often as the greedier first-born.

18. Mothers’ preferred Equilibrium • Suppose that genes that command firstborn lambs tell them to nurse when mother offers and not to complain. • And the genes controlling maternal behavior tell Mom to be hard-nosed. If lamb calls the wolf when it is older than mom-optimal weaning age, she ignores bleats and lets it take its chances with the wolf. • This is an equilibrium. • Mutant lamb who calls wolf is likely to be eaten and less likely than normal lambs to pass on his genes. • Mutant mom who is less hard-nosed has fewer total offspring.

19. Two possible equilibria • Demanding lambs, compliant moms • Pliant lambs, Hard-nosed Moms • Both are evolutionary equilibria. The second equilibrium is “more efficient” in the sense that it reproduces more rapidly ``given the availability of resources.’’

20. Linked Genes • Suppose that genes that control maternal behavior and first-born behavior are closely “linked”, so that if an animal gets two mutations, one in each locus, these mutant genes are not likely to separate in genetic recombination. • Then genetic combination, hard-nosed mom, pliant lamb is likely to stick together and will eventually outperform soft mom, demanding lamb.

21. Cross-over illustrated Soft Mom Demanding Kid Pliant Kid Tough Mom A Fatal combination (but nice for wolves)

22. Conclusion • Whether the Becker-Alexander conjecture holds true, depends on degree of genetic linkage between genes for maternal behavior and those for firstborn behavior.