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

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  • 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
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    Citations

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    Cited by:

    1. Kai A. Konrad & Florian Morath, 2016. "Evolutionary determinants of war," Defence and Peace Economics, Taylor & Francis Journals, vol. 27(4), pages 520-534, August.
    2. Francisco Alvarez-Cuadrado & Ngo Van Long, 2012. "Envy and Inequality," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(3), pages 949-973, September.
    3. Fafchamps, Marcel & Shilpi, Forhad, 2008. "Subjective welfare, isolation, and relative consumption," Journal of Development Economics, Elsevier, vol. 86(1), pages 43-60, April.
    4. T. Guse & B. Hehenkamp, 2006. "The strategic advantage of interdependent preferences in rent-seeking contests," Public Choice, Springer, vol. 129(3), pages 323-352, December.
    5. Boudreau, James W. & Shunda, Nicholas, 2012. "On the evolution of prize perceptions in contests," Economics Letters, Elsevier, vol. 116(3), pages 498-501.
    6. Tran, Anh & Zeckhauser, Richard, 2012. "Rank as an inherent incentive: Evidence from a field experiment," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 645-650.
    7. Christopher P. Barrington-Leigh & John F. Helliwell, 2008. "Empathy and Emulation: Life Satisfaction and the Urban Geography of Comparison Groups," NBER Working Papers 14593, National Bureau of Economic Research, Inc.
    8. Maarten Voors & Eleonora Nillesen & Philip Verwimp & Erwin Bulte & Robert Lensink & Daan van Soest, 2010. "Does Conflict affect Preferences? Results from Field Experiments in Burundi," Research Working Papers 21, MICROCON - A Micro Level Analysis of Violent Conflict.
    9. Changxia Ke & Kai A. Konrad & Florian Morath, 2015. "Alliances In The Shadow Of Conflict," Economic Inquiry, Western Economic Association International, vol. 53(2), pages 854-871, April.
    10. Christian Rusche, 2011. "Does Delegation Help to Prevent Spiteful Behavior?," Ruhr Economic Papers 0270, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    11. repec:zbw:rwirep:0270 is not listed on IDEAS
    12. Konrad, Kai A., 2007. "Strategy in contests: an introduction
      [Strategie in Turnieren – eine Einführung]
      ," Discussion Papers, Research Unit: Market Processes and Governance SP II 2007-01, Social Science Research Center Berlin (WZB).
    13. Kai A. Konrad & Florian Morath, 2011. "Evolutionarily stable in-group favoritism and out-group spite in intergroup conflict," Working Papers evolutionarily_stable, Max Planck Institute for Tax Law and Public Finance.
    14. Teraji, Shinji, 2007. "Morale and the evolution of norms," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 36(1), pages 48-57, February.
    15. Goerke, Laszlo & Pannenberg, Markus, 2013. "Keeping up with the Joneses: Income Comparisons and Labour Supply," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 80033, Verein für Socialpolitik / German Economic Association.
    16. Susane Leguizamon, 2010. "The Influence of Reference Group House Size on House Price," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 38(3), pages 507-527.
    17. Marcel Fafchamps & Forhad Shilpi, 2004. "Isolation and Subjective Welfare," Economics Series Working Papers 216, University of Oxford, Department of Economics.
    18. Long, Ngo Van & Wang, Shengzu, 2009. "Resource-grabbing by status-conscious agents," Journal of Development Economics, Elsevier, vol. 89(1), pages 39-50, May.
    19. Rusche, Christian, 2011. "Does Delegation Help to Prevent Spiteful Behavior?," Ruhr Economic Papers 270, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    20. Russell Davidson & Adriana Cornea, 2008. "A Refined Bootstrap For Heavy Tailed Distributions," Departmental Working Papers 2008-03, McGill University, Department of Economics.

    More about this item

    JEL classification:

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

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