IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2506.00099.html
   My bibliography  Save this paper

Finance as Extended Biology: Reciprocity as the Cognitive Substrate of Financial Behavior

Author

Listed:
  • Egil Diau

Abstract

A central challenge in economics and artificial intelligence is explaining how financial behaviors-such as credit, insurance, and trade-emerge without formal institutions. We argue that these functions are not products of institutional design, but structured extensions of a single behavioral substrate: reciprocity. Far from being a derived strategy, reciprocity served as the foundational logic of early human societies-governing the circulation of goods, regulation of obligation, and maintenance of long-term cooperation well before markets, money, or formal rules. Trade, commonly regarded as the origin of financial systems, is reframed here as the canonical form of reciprocity: simultaneous, symmetric, and partner-contingent. Building on this logic, we reconstruct four core financial functions-credit, insurance, token exchange, and investment-as expressions of the same underlying principle under varying conditions. By grounding financial behavior in minimal, simulateable dynamics of reciprocal interaction, this framework shifts the focus from institutional engineering to behavioral computation-offering a new foundation for modeling decentralized financial behavior in both human and artificial agents.

Suggested Citation

  • Egil Diau, 2025. "Finance as Extended Biology: Reciprocity as the Cognitive Substrate of Financial Behavior," Papers 2506.00099, arXiv.org, revised Jun 2025.
    • Handle: RePEc:arx:papers:2506.00099
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2506.00099
    File Function: Latest version
    Download Restriction: no
    ---><---

    More about this item

    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:arx:papers:2506.00099. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    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.