An evolutionary edge of knowing less (or: On the ‘curse’ of global information)
AbstractConsider a population of farmers who live around a lake. Each farmer engages in trade with his two adjacent neighbors. The trade is governed by a prisonerâs dilemma ârule of engagement.â A farmerâs payoff is the sum of the payoffs from the two prisonerâs dilemma games played with his two neighbors. When a farmer dies, his son takes over. The son decides whether to cooperate or defect by considering the actions taken and the payoffs received by the most prosperous members of the group comprising his own father and a set of his fatherâs neighbors. The size of this set, which can vary, is termed the âspan of information.â It is shown that a larger span of information can be detrimental to the stable coexistence of cooperation and defection, and that in well-defined circumstances, a large span of information leads to an end of cooperation, whereas a small span does not. Conditions are outlined under which, when individualsâ optimization is based on the assessment of less information, the social outcome is better than when optimization is based on an assessment of, and a corresponding response to, more information.
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Bibliographic InfoArticle provided by Springer in its journal Journal of Evolutionary Economics.
Volume (Year): 20 (2010)
Issue (Month): 1 (January)
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Web page: http://link.springer.de/link/service/journals/00191/index.htm
Other versions of this item:
- Stark, Oded & Behrens, Doris A., 2009. "An Evolutionary Edge of Knowing Less (or: On the "Curse" of Global Information)," Discussion Papers 49924, University of Bonn, Center for Development Research (ZEF).
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
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