IDEAS home Printed from https://ideas.repec.org/a/cje/issued/v36y2003i4p832-859.html
   My bibliography  Save this article

The evolution of preferences and competition: a rationalization of Veblen's theory of invidious comparisons

Author

Listed:
  • Curtis Eaton
  • Mukesh Eswaran

Abstract

We examine how preferences evolve by natural selection in a competitive environment similar to that characterizing much of our evolutionary past. We find that the evolutionarily stable preferences in this context exhibit a concern not only for absolute payoffs but also for relative payoffs, and that this intensifies the degree of competition relative to what obtains when players consider only absolute payoffs. We argue that this has consequences for the equilibrium population size. We argue that the premise of this analysis is consistent with the available anthropological evidence, and that the prediction is broadly consistent with the findings of experimental game theory.

Suggested Citation

  • Curtis Eaton & Mukesh Eswaran, 2003. "The evolution of preferences and competition: a rationalization of Veblen's theory of invidious comparisons," Canadian Journal of Economics, Canadian Economics Association, vol. 36(4), pages 832-859, November.
  • Handle: RePEc:cje:issued:v:36:y:2003:i:4:p:832-859
    DOI: 10.1111/1540-5982.t01-3-00003
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1540-5982.t01-3-00003
    Download Restriction: access restricted to subscribers

    File URL: https://libkey.io/10.1111/1540-5982.t01-3-00003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 817-868.
    2. Efe A. Ok & Levent KoÚkesen, 2000. "Negatively interdependent preferences," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 17(3), pages 533-558.
    3. Frank, Robert H, 1985. "The Demand for Unobservable and Other Nonpositional Goods," American Economic Review, American Economic Association, vol. 75(1), pages 101-116, March.
    4. Kockesen, Levent & Ok, Efe A. & Sethi, Rajiv, 2000. "The Strategic Advantage of Negatively Interdependent Preferences," Journal of Economic Theory, Elsevier, vol. 92(2), pages 274-299, June.
    5. Bester, Helmut & Guth, Werner, 1998. "Is altruism evolutionarily stable?," Journal of Economic Behavior & Organization, Elsevier, vol. 34(2), pages 193-209, February.
    6. Schaffer, Mark E., 1989. "Are profit-maximisers the best survivors? : A Darwinian model of economic natural selection," Journal of Economic Behavior & Organization, Elsevier, vol. 12(1), pages 29-45, August.
    7. Hansen, Robert G. & Samuelson, William F., 1988. "Evolution in economic games," Journal of Economic Behavior & Organization, Elsevier, vol. 10(3), pages 315-338, October.
    8. Kockesen, Levent & Ok, Efe A. & Sethi, Rajiv, 2000. "Evolution of Interdependent Preferences in Aggregative Games," Games and Economic Behavior, Elsevier, vol. 31(2), pages 303-310, May.
    9. Guth, Werner, 1995. "An Evolutionary Approach to Explaining Cooperative Behavior by Reciprocal Incentives," International Journal of Game Theory, Springer;Game Theory Society, vol. 24(4), pages 323-344.
    10. Rogers, Alan R, 1994. "Evolution of Time Preference by Natural Selection," American Economic Review, American Economic Association, vol. 84(3), pages 460-481, June.
    11. Bulow, Jeremy I & Geanakoplos, John D & Klemperer, Paul D, 1985. "Multimarket Oligopoly: Strategic Substitutes and Complements," Journal of Political Economy, University of Chicago Press, vol. 93(3), pages 488-511, June.
    12. Ely, Jeffrey C. & Yilankaya, Okan, 2001. "Nash Equilibrium and the Evolution of Preferences," Journal of Economic Theory, Elsevier, vol. 97(2), pages 255-272, April.
    13. Possajennikov, Alex, 2000. "On the evolutionary stability of altruistic and spiteful preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 42(1), pages 125-129, May.
    14. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
    15. Bolle, Friedel, 2000. "Is altruism evolutionarily stable? And envy and malevolence?: Remarks on Bester and Guth," Journal of Economic Behavior & Organization, Elsevier, vol. 42(1), pages 131-133, May.
    16. Drew Fudenberg & Jean Tirole, 1991. "Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061414, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mukesh Eswaran & Ashok Kotwal, 2004. "A theory of gender differences in parental altruism," Canadian Journal of Economics, Canadian Economics Association, vol. 37(4), pages 918-950, November.
    2. Norman, Thomas W.L., 2012. "Equilibrium selection and the dynamic evolution of preferences," Games and Economic Behavior, Elsevier, vol. 74(1), pages 311-320.
    3. 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.
    4. Lahkar, Ratul, 2019. "Elimination of non-individualistic preferences in large population aggregative games," Journal of Mathematical Economics, Elsevier, vol. 84(C), pages 150-165.
    5. Heifetz, Aviad & Shannon, Chris & Spiegel, Yossi, 2007. "What to maximize if you must," Journal of Economic Theory, Elsevier, vol. 133(1), pages 31-57, March.
    6. Alger, Ingela & Weibull, Jörgen W., 2016. "Evolution and Kantian morality," Games and Economic Behavior, Elsevier, vol. 98(C), pages 56-67.
    7. Tóbiás, Áron, 2023. "Rational Altruism," Journal of Economic Behavior & Organization, Elsevier, vol. 207(C), pages 50-80.
    8. Aviad Heifetz & Chris Shannon & Yossi Spiegel, 2007. "The Dynamic Evolution of Preferences," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 32(2), pages 251-286, August.
    9. B. Curtis Eaton & Mukesh Eswaran & Robert J. Oxoby, 2011. "‘Us’ and ‘Them’: the origin of identity, and its economic implications," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 44(3), pages 719-748, August.
    10. Thomas Norman, 2004. "Dynamically Stable Preferences," Economics Series Working Papers 207, University of Oxford, Department of Economics.
    11. Carrasco, Jose A. & Harrison, Rodrigo & Villena, Mauricio G., 2022. "Strategic reciprocity and preference formation," Journal of Economic Behavior & Organization, Elsevier, vol. 203(C), pages 368-381.
    12. Müller, Stephan, 2014. "The evolution of inequality aversion in a simplified game of life," University of Göttingen Working Papers in Economics 219, University of Goettingen, Department of Economics.
    13. Heifetz, Aviad & Segev, Ella & Talley, Eric, 2007. "Market design with endogenous preferences," Games and Economic Behavior, Elsevier, vol. 58(1), pages 121-153, January.
    14. Ingela Alger & Jörgen W. Weibull, 2019. "Evolutionary Models of Preference Formation," Annual Review of Economics, Annual Reviews, vol. 11(1), pages 329-354, August.
    15. Burkhard C. Schipper, 2021. "The evolutionary stability of optimism, pessimism, and complete ignorance," Theory and Decision, Springer, vol. 90(3), pages 417-454, May.
    16. Konrad, Kai A. & Morath, Florian, 2016. "Bargaining with incomplete information: Evolutionary stability in finite populations," Journal of Mathematical Economics, Elsevier, vol. 65(C), pages 118-131.
    17. Friedman, Daniel & Singh, Nirvikar, 2009. "Equilibrium vengeance," Games and Economic Behavior, Elsevier, vol. 66(2), pages 813-829, July.
    18. Aviad Heifetz & Ella Segev & Eric Talley, "undated". "Market Design with Endogenous Preferences," University of Southern California Legal Working Paper Series usclwps-1001, University of Southern California Law School.
    19. Milchtaich, Igal, 2012. "Comparative statics of altruism and spite," Games and Economic Behavior, Elsevier, vol. 75(2), pages 809-831.
    20. Hideaki Goto, 2017. "How does socio-economic environment influence the distribution of altruism?," Theory and Decision, Springer, vol. 82(1), pages 93-116, January.

    More about this item

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cje:issued:v:36:y:2003:i:4:p:832-859. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Prof. Werner Antweiler (email available below). General contact details of provider: https://edirc.repec.org/data/ceaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.