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Evolutionary stability of discrimination under observability

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  • Herold, Florian
  • Kuzmics, Christoph

Abstract

We study the evolution of preferences under perfect and almost perfect observability in symmetric 2-player games. We demonstrate that if nature can choose from a sufficiently general preference space, which includes preferences over outcomes that may depend on the opponent's preference-type, then, in most games, only discriminating preferences (treating different types of opponents differently in the same situation) can be evolutionary stable and some discriminating types are stable in a very strong sense in all games. We use these discriminating types to show that any symmetric outcome which gives players more than their minmax value in material payoffs (fitness) can be seen as equilibrium play of a player population with such strongly stable preferences.

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  • Herold, Florian & Kuzmics, Christoph, 2009. "Evolutionary stability of discrimination under observability," Games and Economic Behavior, Elsevier, vol. 67(2), pages 542-551, November.
    • Handle: RePEc:eee:gamebe:v:67:y:2009:i:2:p:542-551
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    6. Yuval Heller & Erik Mohlin, 2018. "Observations on Cooperation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 85(4), pages 2253-2282.
    7. Gorkem Celik & Michael Peters, 2016. "Reciprocal relationships and mechanism design," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 49(1), pages 374-411, February.
    8. Gamba, Astrid, 2013. "Learning and evolution of altruistic preferences in the Centipede Game," Journal of Economic Behavior & Organization, Elsevier, vol. 85(C), pages 112-117.
    9. Norman, Thomas W.L., 2012. "Equilibrium selection and the dynamic evolution of preferences," Games and Economic Behavior, Elsevier, vol. 74(1), pages 311-320.
    10. Florian Gauer & Christoph Kuzmics, 2020. "Cognitive Empathy In Conflict Situations," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 61(4), pages 1659-1678, November.
    11. Carrasco, José A. & Harrison, Rodrigo & Villena, Mauricio, 2018. "Interdependent preferences and endogenous reciprocity," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 76(C), pages 68-75.
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    13. Heller, Yuval & Mohlin, Erik, 2019. "Coevolution of deception and preferences: Darwin and Nash meet Machiavelli," Games and Economic Behavior, Elsevier, vol. 113(C), pages 223-247.
    14. Schliffke, Philipp, 2012. "The co-evolution of reciprocity-based wage offers and effort choices," Economics Letters, Elsevier, vol. 117(1), pages 326-329.
    15. Heller, Yuval & Mohlin, Erik, 2015. "Stable Observable Behavior," MPRA Paper 63013, University Library of Munich, Germany.
    16. Heller, Yuval & Sturrock, David, 2020. "Promises and endogenous reneging costs," Journal of Economic Theory, Elsevier, vol. 187(C).
    17. Astrid Gamba, 2011. "On the Evolution of Preferences," Jena Economics Research Papers 2011-032, Friedrich-Schiller-University Jena.
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    19. Halpern, Joe & Heller, Yuval & Winter, Eyal, 2022. "The Benefits of Coarse Preferences," MPRA Paper 111670, University Library of Munich, Germany.
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    21. Heller, Yuval & Sturrock, David, 2017. "Promises and Endogenous Reneging Costs," MPRA Paper 78803, University Library of Munich, Germany.

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