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Kludged

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  • Jeffrey C. Ely

Abstract

Is there reason to believe that our brains have evolved to make efficient decisions so that the details of the internal process are irrelevant? I develop a model which illustrates a limitation of adaptive processes: improvements tend to come in the form of kludges. A kludge is a marginal adaptation that compensates for, but does not eliminate, fundamental design inefficiencies. When kludges accumulate, the result can be perpetually suboptimal behavior even in a model of evolution in which arbitrarily large innovations occur infinitely, often with probability 1. (JEL D03, D87)

Suggested Citation

  • Jeffrey C. Ely, 2011. "Kludged," American Economic Journal: Microeconomics, American Economic Association, vol. 3(3), pages 210-231, August.
    • Handle: RePEc:aea:aejmic:v:3:y:2011:i:3:p:210-31
    Note: DOI: 10.1257/mic.3.3.210
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    References listed on IDEAS

    as
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    Cited by:

    1. Frenkel, Sivan & Heller, Yuval & Teper, Roee, 2012. "Endowment as a blessing," MPRA Paper 39430, University Library of Munich, Germany, revised 30 Apr 2012.

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    More about this item

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D87 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Neuroeconomics

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