Please, Not Another Bias! The Problem with Behavioral Economics

An evolutionary take on behavioral economics

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By Jason Collin

Below is a transcript of my planned presentation at today’s Marketing Science Ideas Xchange. The important images from the slide pack are below, but the full set of slides is available here.


Please, not another bias! An evolutionary take on behavioural economics

Thank you for the invitation to speak today.

I accepted the invite because natural selection has shaped the human mind to take actions that have, in our past, tended increase reproductive success.

That statement isn’t as creepy as it sounds. I did not calculate the direct reproductive opportunity of this speaking engagement. Rather, our evolutionary past means that we are inclined to pursue proximate objectives that lead to the ultimate goal.

For example, we seek status – and what could be more status-enhancing than speaking here. And we engage in the costly signalling of our traits – such as intelligence – to the opposite sex, allies or rivals.

Another place where I signal is my blog, Evolving Economics. A copy of these slides and the text of what I plan to speak about today – which should approximate what I actually will speak about – will be posted onto Evolving Economics before the end of today’s talk. That text includes links to the studies I will refer to.

To explain why I engage in this costly signalling – conference speaking, blogging and the like – I will first take a step back and explain how the evolutionary approach to decision making relates to other approaches, starting with behavioural economics.

And I should say that I am going to refer to “behavioural economics” today, even though what I am going to talk about is more rightfully called “behavioural science”.

I once had an online discussion about this point with last year’s MSiX headlining speaker Rory Sutherland. I was in the behavioural science camp, but he said that the term behavioural economics was fantastic marketing and is effective in getting the attention of economists. Even though calling it behavioural economics is a slight to the psychological foundations of this work, we should live with it.

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Now that I work in this space and I have used the terms behavioural science and behavioural economics with a range of clients and colleagues, I am convinced that Rory was right. I receive blank looks when I use the term behavioural science. I attract immediate interest when I use the term behavioural economics.

So, to content. And I am going to start with a complaint. In some ways I am following the traditional format of a behavioural economics talk, which sets up the rational homo economicus straw man, and beats it to death with a series of examples of how irrational we really are. But for a change, I am going to start by beating up on behavioural economics.

And I should say that, despite this bit of bashing, I have a soft spot for behavioural economics. It’s my day job for a start – helping clients in the private and public sectors better understand how their customers, employees and citizens make decisions, and how they can help them to make better ones. It’s just that behavioural economics could be so much more.

There are not 165 human biases


So, I want to take you to a Wikipedia page that I first saw when someone tweeted that they had found “the best page on the internet”. The “List of cognitive biases” was up to 165 entries on the day I took this snapshot, and it contains most of your behavioural science favourites … the availability heuristic, confirmation bias, the decoy effect – a favourite of marketers, the endowment effect and so on ….

But this page, to me, points to what I see as a fundamental problem with behavioural economics.

Let me draw an analogy with the history of astronomy. In 1500, the dominant model of the universe involved the sun, planets and stars orbiting around the earth.

Since that wasn’t what was actually happening, there was a huge list of deviations from this model. We have the Venus effect, where Venus appears in the evening and morning and never crosses the night sky. We have the Jupiter bias, where it moves across the night sky, but then suddenly starts going the other way.

CassiniPutting all the biases in the orbits of the planets and sun together, we end up with a picture of the orbits that looks something like this picture – epicycles on epicycles.

But instead of this model of biases, deviations and epicycles, what about an alternative model?

The earth and the planets orbit the sun.

CopernicusOf course, it’s not quite as simple as this picture – the orbits of the planets around the sun are elliptical, not circular. But, essentially, by adopting this new model of how the solar system worked, a large collection of “biases” was able to become a coherent theory.

Behavioural economics has some similarities to the state of astronomy in 1500 – it is still at the collection of deviation stage. There aren’t 165 human biases. There are 165 deviations from the wrong model.

So what is this unifying theory? I suggest the first place to look is evolutionary biology. Human minds are the product of evolution, shaped by millions of years of natural selection.

A hierarchy of decision making

To help you understand what an evolutionary lens adds to our understanding of human decision making, I am going to place evolutionary biology in a hierarchy of possible ways to consider the mind.

The first four reflect a hierarchy presented by Gerd Gigerenzer in his book Rationality for Mortals (if you haven’t read any Gigerenzer, do).

First, we have the perfectly rational decision maker, homo economicus, who exhibits unbounded rationality. If you have been to enough behavioural economics presentations, you have already seen this model beaten to death.

The next is a model provided by economists in response to some of the behavioural critiques – a model of decision making under constraints. If you add costs to information search – there is your role for advertising and marketing – and possibly some limits to computational power, we get different decisions. It is a nice idea, but an even less realistic version of how people actually think. If you have done any late secondary or early tertiary mathematics, you will know it’s typically harder to make calculations with constraints than it is to be the unbounded rationaliser.

The third model is the heuristics and biases program of behavioural economics. Gigerenzer calls this work the search for “cognitive illusions.” I have already complained about that.

Next comes what Gigerenzer calls ecological rationality. I want to spend a moment or two talking about this as it is very similar to an evolutionary approach, minus one important feature.

Ecological rationality

The ecological rationality approach involves asking what decision making tools the user possesses. You then look at the environment in which those tools are used, and then you can assess how those tools perform in that environment. The decision making tools and environment in which they are used are two blades of the same scissors (Herbert Simon used this description) – and you need to examine both the tool and the environment to understand the nature of the decision that has been made.

Through this approach you might see what are called “biases” emerge, but an ecological rationality approach allows you to understand the basis of the bias. Instead of just noting someone has made a poor decision, you might note why they were wrong and in what alternative environments those decision rules might be more effective.

Let me give you an example – the gaze heuristic (a heuristic is a mental shortcut). The gaze heuristic is a tool that people – and dogs – use to catch balls. The heuristic is simply this – maintain the ball at a constant angle of gaze. If you move to keep this angle constant, you will end up where the ball lands. Obviously, this is easier than calculating where you should be from the velocity of the ball, angle of flight, the effect of wind resistance and so on.

But it results in a strange pattern of movement. Suppose you are close to the point where the ball is first hit into the air. As it rises you will tend to back away from the ball. As it then starts to fall, you will move back in. If it is hit up to the side of you, you will move to the ball in a curve. Now, if you had a behavioural economist look at the path you took to catch the ball, they might call it the curve bias or something like that – but it is actually the result of a very effective decision making tool.

There are also some circumstances where it works better, and some where it fails. It tends to work best when the ball is already high in the air. If you catch sight of a ball hit straight up before it has risen far, using the heuristic for its entire flight could require an impossible feat of first running away from the ball and then toward it. When we see fielders messing up a catch when the ball is hit straight up, it can be the backfire of this heuristic.

Understanding this is a much richer understanding than saying that the fielder is biased because he did not run straight to where the ball was going to land. It also points to the power of heuristics. Try to train someone to run straight to where a ball will land and watch them fail. Don’t see these decision making shortcuts as poor cousins of the “more rational” approaches.

Let me give another more marketing orientated example – the recognition heuristic. The heuristic runs along the line of “If I recognise one of two objects and not the other, then infer that the object I recognise has higher value.”

Obviously, people might use the recognition heuristic when shopping for a product. If I recognise one brand but not the other, I might assume the brand I know is superior.

The recognition heuristic will work when recognition is correlated with the quality of the product. I am sure you know plenty of products where brand strength is a good indicator of quality. And of course, one of the jobs of marketers is to make sure the recognition heuristic delivers success for their client – you are trying to achieve brand recognition. Then again, there are other products where brand strength probably leads people to make some poor decisions. My personal view is that the recognition heuristic works particularly poorly when it comes to beer.

Evolutionary rationality

Now, I consider Gigerenzer’s approach to be superior to the biases and heuristics or “cognitive illusions” approach. But it still leaves open the question of where these heuristics and other decision making tools come from. And this is where we get to the fifth level – what I will call evolutionary rationality. The toolbox that we use today has been honed by millennia of natural selection.

Anticipating two common responses to this point, I am not going to spend today trying to convince the doubters in the audience that the human mind is a product of evolution – although I am happy to do that over a drink later.

And I will highlight that humans are cultural and well as biological creatures. That we have a range of universal instincts and preferences shaped by natural selection does not say that culture is not important. What we see is a combination of evolved preferences, social norms, technologies and the like, each interacting with and shaping the others. Yes environment matters, but if you ignore the biology, you will do a poor job of understanding why consumers act the way they do.

So what does an evolutionary approach tell us about the human mind?

For a start, it tells us something about our objectives. Those who are in the audience today – all of your ancestors, without fail, have managed to do two things: survive to reproductive age, and reproduce. As little as you might like to think about it, your parents, grandparents and so on all the way back until the evolution of sex have always successfully attracted a partner to reproduce with.

This does not mean that we literally walk around assessing every action by whether it aids survival or reproduction. Instead, evolution shapes proximate mechanisms that lead to that ultimate goal. And consumer preferences are manifestations of our innate needs and preferences.

For example, on survival – we are obsessed with food – and in particular, crave sweet and fatty foods – which in historical times increased survival. Most of the successful global fast-food restaurants target those evolved tastes (in fact, you could say that the market has evolved to match those propensities).

We have an innate sense of danger – for example, we (and other animals) are quicker at detecting snakes than other stimuli, even when we have never seen them before.

On reproduction, we enjoy sex – which has obvious reproductive benefits, at least before the spread of effective contraception. We accumulate resources far beyond those required for survival. And so on.

Before going on, however, I should say that the shaping of proximate rather than ultimate mechanisms for survival and reproduction has some interesting consequences. Our evolved traits and preferences were shaped in times vastly different to today. Our taste for food was shaped at a time when calories were generally scarce and provided in the form of meat, tubers, nuts, vegetables and Glyptodons. The gorging that would occur after the occasional slaughter of a large prey is very different to the eating that occurs in today’s age of grain and calorie abundance. Today, we are effectively calorie unconstrained.

And the joy of sex that once led us to have children clearly isn’t working as efficiently as it once did. Fertility across the developed world has plunged – although I’d be happy argue later over a drink that evolutionary forces will tend to drive fertility back up.

This backfiring of our evolved traits and preferences is known as mismatch. Our evolved traits do not always match the new modern environment – and this is something that makes Gigerenzer’s model of looking at the interaction of the decision making tools with the environment such a useful tool for analysis. Sometimes the tool works. Sometimes it doesn’t.

So what does evolutionary biology tell us about human decision making, behavioural economics and marketing?


FerrariSo, let’s do a quick quiz. Tell me two things about the driver of this Ferrari (I have stolen this example from University of New South Wales evolutionary biologist Rob Brooks).

First, the driver was male. Yes, men and women are different – we will touch on the reasons for this in a moment – although I expect most marketers already knew this.

Second, the driver is likely young (in this case, 25).

So why is this the case?

Females – and in biology, this is in part how females are defined – produce a large immobile egg. Males produce a smaller gamete – sperm. The egg is the scarce resource. Women are born with a million or so eggs, but they release only one or so a month. Men produce 1,500 sperm a second. Each man in this room will produce enough sperm during this talk to fertilise every egg the women in this room will ever produce.

Then there is what happens when a sperm and an egg are joined. The woman spends nine months carrying the baby – and is unable to reproduce during that time. She then provides the majority of infant care. Men are less constrained by any such barriers.

Then throw in that women are certain of maternity, whereas men may not be certain of paternity, and you have vastly different patterns of reproduction between the sexes.

More men than women have zero children – the worst possible evolutionary outcome. A man who applies no standards to a mate choice may still go without. A woman would never have that problem.

Then, for a few men, the rewards are vast.

As one example, approximately 16 million men in central Asia carry the same Y chromosome – the Y chromosome is passed from down the male lineage from father to son. This chromosome originated in Mongolia around 1000 AD with around 8 per cent of the men in the region carrying it (0.5% of the world’s male population) – they all trace their male lineage back to the same man.

One possibility is that this chromosome was so successful as it was carried by Genghis Khan and his close relatives. Genghis had multiple wives and a harem. He may have fathered thousands of children. His grandson Kublai Khan was famous for the size of his harem – I have seen some estimates that it contained 7,000 women (although haven’t been able to reliably source those estimates). Whether that number is accurate or not, it is feasible that Kublai Khan could have been having hundreds of children a year.

No woman could ever have that level of success – but for men, the evolutionary rewards to success can be vast.

This brings us back to our Ferrari driver. As a male, the risk-reward calculation in evolutionary terms is quite different from women. Men face a higher probability of evolutionary oblivion, and small chance of an evolutionary extravaganza. It makes sense to take risks that may lead to inordinate evolutionary success – or at least to avoid evolutionary oblivion.

One of my favourite examples of this comes from research by Richard Ronay and Bill von Hippel. They got some young male skateboarders to perform tricks, including a difficult trick that they could complete only half the time. Halfway through filming, a woman rated as highly attractive (corroborated by “many informal comments and phone number requests from the skateboarders”) walked onto the scene. Once she appeared, they took more risks and were less likely to bail a trick half-way through, instead riding all the way through to the crash landing (a story on ABC’s Catalyst demonstrates this effect).

First, this risk taking should be seen in the context of what they are trying to achieve – attracting the female. So much of economics – and behavioural economics – is looking at the wrong objective.

Second, this change in risk preference in the presence of a women points to one of the most important findings in evolutionary psychology – our decision-making changes with the immediate context. We might be considered to be different personalities. Evolution has not shaped an all-knowing computer, but rather a modular computer for making different decisions based on different contexts.

As an example of this, show one group of people the movie The Shining, the other half a romantic movie starring Ethan Hawke. Then manipulate the ads they see during the movies to either accentuate the uniqueness of the product, or its popularity.

Those watching The Shining are more likely to prefer popular products – safety in numbers as their danger avoidance personality is triggered. For those watching the romantic movie, they wanted unique products so that they would stand out from the crowd. Their mating motives have been triggered. You effectively get a change in preferences based on which movie they are watching and which self is answering the questions about the products. The effectiveness of social proof varied with context.

Present bias

Let’s look at a traditional behavioural economics problem – present bias, which is the strong preference for present rewards over those in the future. The largest discount for the initial delay.

If I ask you the following question, some of you will choose A, and some B.

Choose between:

  1. One apple today
  2. Two apples tomorrow

But if I ask you the following question, almost no-one will choose A:

Choose between:

  1. One apple in one year
  2. Two apples in one year and one day

This change in preference shouldn’t be seen if we discount the future consistently. And if I asked you to revise your choice in the second question at the one year mark, I am effectively asking you the first question and some of you might change your mind.

On the one hand this seems irrational. But what if the immediate objective isn’t maximising lifetime consumption of apples?

In an experiment by Margo Wilson and Martin Daly – two of the pioneers of evolutionary psychology, and I recommend you read their book Homicide if you haven’t – they exposed men and women to either pictures of attractive faces or pictures of cars before undergoing tests of their degree of present bias.

The men who had seen the attractive faces became more severe discounters than those who had seen the cars. They became focused on the present – the mating opportunity.  The women did not become increasingly severe discounters in this experiment – although there may be a smaller effect that the experiment did not have the power to detect.

So here, what might be called a very strong present bias has a degree of rationality to it in that the objective of the participants is mating. Obviously, they didn’t have a chance to mate with these pictures – so there we have the issue of mismatch – but you can see the evolutionary foundation of their decision. If they did manage to capitalise on that moment and manage to mate, their evolutionary future is set.

MantisAn extreme example of this is seen in other species. A male black widow or preying mantis would allow themselves to be eaten at the moment of mating – this picture is of a male preying mantis getting lucky but losing his head as a consequence – massive present bias in terms of the typical measures an economist might use, highly rational from an evolutionary perspective.

Costly signalling

Now I want to move to what I believe is the most important idea I will communicate today.

Shortly after publishing The Origin of Species, Charles Darwin wrote “The sight of a feather in a peacock’s tail, whenever I gaze at it, makes me sick!”. He wrote this because, to him, the tail simply did not make any sense. It harmed the peacocks chance of survival. Why would a female mate with a long-tailed male and subject her long-tailed son to the same dilemma.

But in the mid-1970’s an evolutionary biologist, Amotz Zahavi, proposed that signals such as peacock tails can be a trusted as they handicap the bearer. Only a high quality peacock can bear the cost. If a sickly peacock tried to carry such a large tail, they’d be toast. In evolutionary lingo, the peacock’s tail is an excellent fitness indicator.

Biologists argued about whether signals could be honest because they create a handicap for fifteen or so years after Zahavi espoused this theory. But in the early 1990s it was agreed that the maths checked out, and the idea is now broadly accepted by biologists.

This handicap principle also applies to human signalling. When humans are seeking a mate, you want to know as much as you can about them. You want to know their intelligence, their health, the level of conscientiousness, their kindness, the resources at their disposal and so on. You can’t just see this straight away – so people seek to signal these traits. And the products they buy are a major part of that signal.

Conspicuous consumption

The most obvious example of this type of signalling is conspicuous consumption. Conspicuous consumption is a signal of resources and the traits required to acquire those resources.

One of the most expensive watches in the world is the Patek Philippe Calibre 89. I first heard of this watch when I read Robert Franks Luxury Fever. Only four were made, with the first selling for $2.5 million and the last auction price I can find was over $5 million.  The watch has 1728 components, gives you the date of Easter each year, and unlike most mechanical watches, will not record the years 2100, 2200 and 2300 as leap years, while still recording 2400 as one (as per the order of Pope Gregory XIII in 1582). It has 28 hands and there are 2800 stars on the star chart.

Since it is mechanical, it includes a tourbillon, a mechanism to improve accuracy by accounting for the earth’s rotation. But the funny thing is that my cheap quartz watch does not require such a mechanism, as gravity does not affect the vibrations of the crystal. The Calibre 89 also weights over a kilo and is the size of a hockey puck. For several million dollars less, I have scored a more accurate watch that I can wear.

But it is the waste inherent in the Calibre 89 that makes it a reliable signal of resources – and the qualities required to accumulate those resources. All that extra expenditure is effectively waste that a man with low resources cannot bear. Think of all the most expensive consumer goods – super yachts, high quality sports cars, gold Apple watches. In terms of transport or timekeeping there are much cheaper and in fact much more reliable methods, but the waste inherent in these goods makes them an excellent signal of resources.

So, does this conspicuous consumption actually work as a signal?

There’s a decent size literature on this topic, so let’s look at two typical experiments – one on the desire of men to conspicuously consume, a second on the effect of that consumption on women.

Take a group of men and show them pictures of attractive women and then ask them what they will do with their money. The mating prime makes men more likely to engage in conspicuous consumption or conspicuous charitable donation, but has no effect on inconspicuous consumption.

Women can also be affected by mating primes, although in that particular experiment their change in behaviour in response to pictures of attractive men was an desired increase in volunteering in a public way (but no increase in private benevolence).

The difference reflects the different traits each are communicating – men are communicating resources and the traits required to accumulate them, women their conscientiousness.

Dunn et alOn the effect of the signal, in one studymen and women were shown pictures of members of the opposite sex in either a red Ford Fiesta or a silver Bentley. Unfortunately the photos in the paper are provided in black and white – as shown in this slide – but these indicate the types of images the experimental subjects were shown.

The result – the expensive car made the male more attractive to the females, whereas there was no effect on male perception of the female drivers. The increase in male’s attractiveness was equivalent to around 1 point on a scale of 1 to 10.

Signalling other traits

Of course, signalling involves far more than conspicuous consumption. We don’t only signal resources, but want to signal intelligence, conscientiousness, agreeableness or other features.

We buy a Cassini 1100 mm reflecting telescope to signal our intelligence. We subject ourselves to year’s of post-secondary education to signal intelligence and conscientiousness. We buy hybrid cars to signal our agreeableness. And we don’t only signal to potential mates. We also signal to friends, relatives and rivals.

Importantly, good signals are difficult to fake. It is difficult to exploit many products if you don’t have the right personality traits – faking education below certain levels of intelligence or conscientious is too difficult, faking wealth will run a poor person dry, faking appreciation of jazz if you have low openness will drive you nuts – the handicap is what makes the signal reliable.

Ultimately, this approach indicates that there is an important question to be asked when marketing a product. How does your product or brand allow the consumer to signal their traits to potential mates, their spouse, allies or rivals?

Unfortunately, it’s not as simple as communicating this point directly to a potential consumer in your advertisements. A sports car ad for young males does not directly inform them that it will attract more females.

That is, unless you are Lynx, or Axe as it seems to be called in most countries. Lynx states the strategy overtly – “Lynx gives guys the edge in the mating game”.

But is this actually the strategy for most products? It is just a question of how many times removed the product is from mating outcomes. The product will increase your status, giving you an edge in the mating game. This product will intimidate rivals, giving you an edge in the mating game. This product will indicate your wealth, giving you an edge in the mating game. This product will allow you to get a high paying job to buy a sports car to indicate your wealth to give you an edge in the mating game.

So when a man sees a billboard with an attractive woman on a billboard, it gets attention. And from an evolutionary perspective, this is exactly the sort of thing that would draw attention. In our evolutionary past, an attractive woman would have been right there – you might think you are in with a shot.

But there is another more important, subtle message. This product will help you in the mating game. The girl on the car gets attention, but the more important implicit message is that this car can get you the girl. I understand there is the saying “sex sells”, and then the rebuttal, “sex sells, but only if you are selling sex”. Well, far more of you are selling sex than you realise.

Personally, I’d like to see more research in this area. Survey the buyers of different cars for number of sexual encounters too see if there is a difference. Of course, we have selection bias issues with those who buy the cars – so maybe we need some random allocation of sports cars to get some reliable results.

A reading list

Now, I have only scratched the surface over the last half hour or so, but if you are interested in this area, here are a few books to get you started – and I should say that these books heavily influenced what I have talked about today.

MSiX reading

The Red Queen: Sex and the Evolution of Human Nature by Matt Ridley was the first book that made me realise that evolutionary biology was at the core of understanding human behaviour. The first half gives a great synopsis of the origins of sex – that is, why we have sex as opposed to budding off clones – and the second asks what this means for human interactions.

In Spent: Sex, Evolution and Consumer Behavior, Geoffrey Miller asks whether the signalling we engage in in a mass-consumerist society does a good job of signalling the traits of interest. A consumer culture has a degree of self-deception – that above average products can compensate for below average traits. We get to know each other in minutes and are quite good at judging other people’s qualities from our interactions – that is, our intelligence, conscientiousness and so on. We can see through the product haze, and most products do a crap job of signalling the traits we think we are.

Next, Gad Saad is the pioneer of examining consumption through an evolutionary lens.The Evolutionary Bases of Consumption is a more technical book, while The Consuming Instinct: What Juicy Burgers, Ferraris, Pornography, and Gift Giving Reveal About Human Nature is an easier read. By the end of those two books the idea that evolutionary theory is important for understanding consumption decisions will have been well and truly hammered into you.

I spoke a lot about signalling, and Amotz Zahavi was the person in the mid-1970’s who first saw how important this is in biology. The Handicap Principle: A Missing Piece of Darwin’s Puzzle is his popular book on the topic. Robert Frank’s Luxury Fever extends the examination of signalling to conspicuous consumption.

Gerd Gigerenzer’s Rationality for Mortals: How People Cope with Uncertainty is from where I stole the first four stages of human decision making. If you do start reading Gigerenzer’s books, I suggest you don’t stop there.

The Rational Animal: How Evolution Made Us Smarter Than We Think by Douglas Kendrick and Vlad Griskevicus in some ways does what I did in the early part of the presentation – they show that many apparently irrational actions are actually quite rational from an evolutionary perspective. They are behind a lot of the studies I have referred to.

And then there are some related articles that I also recommend reading – particularly by Owen Jones who writes a lot about the need to interface behavioural economics and evolutionary biology.

I have a longer reading list on my blog, where I have reviews of many of these books and links to interesting papers.

Three thoughts to chew on

So, having said all this, here are three ideas for you to walk away from this presentation with.

Obviously, to understand humans you need to understand our evolutionary past. An evolutionary lens provides a guide as to what people are looking for in a product. As Gad Saad points out in The Consuming Instinct, try selling Harlequin-type romance novels to men and see where that takes you – some strategies will be doomed to failure because they do not align with our evolved preferences.

Second, a large part of our evolved behaviour involves our desire to signal important traits and qualities to potential mates, allies and rivals. When buying a product, what traits does the consumer believe they will be signalling?

And third, our evolved minds are sometimes out-of-sync with our modern environments. Use Gigerenzer’s framework (or Herbert Simon’s scissors) – what are the decision making tools we have evolved to use, what is the environment we intend to use them in, and what is the resulting decision? Biases, purchases and a large range of human behaviour will make much more sense when looked at from this lens.

2016 September 25

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  • Very interesting article. But this was puzzling:

    “Our taste for food was shaped at a time when calories were generally scarce and provided in the form of meat, tubers, nuts, vegetables and Glyptodons.”

    Glyptodons? These armadillo-like creatures were extinct 10 million year ago. The genus Homo first appeared about 2.5 million years ago.

    But I see a more substantive gap in the argument. Reproductive success is not just the result of mating but also of raising offspring who can and then do reproduce themselves, perpetuating the individual’s genetic ‘line’. There is no mention here of a whole array of behaviors aimed not at copulation but at protecting and perpetuating our genetic offspring and relatives.

    • Another flaw in the argument that occurred to me on further reflection. Collins presumes that human behavior is driven by ‘millions’ or ‘thousands’ of years of genetic evolution — focused, again, on reproductive success.

      But the situation is more complicated. Collins concedes that culture also conditions behavior in many ways, but he seems to subordinate that and doesn’t pursue it. But we now know that culture and genes (nurture v. nature) are not entirely independent variables. It turns out that Lysenko was not all wrong: Characteristics acquired through experience and learning can affect the genome and may be inherited through “epigenetic” mechanisms.

      Evolution in effect may occur far more rapidly than Collins assumes. Among other things, this makes the distinction between evolutionary economics and behavioral economics more blurry. The relationship may have the nature of what George Soros dubbed ‘reflexivity.’

      • Culture – or environment – is important, which is the second blade of Herbert Simon’s scissors.

        On epigenetics, I am in the skeptic camp as to whether inherited epigenetic change is an important evolutionary force (for example, I largely agree with Jerry Coyne here – And even if a substantive evolutionary force, the sheer number of human universals suggest recent rapid human evolution (and yes, it is accelerating – has not undermined the value of assessing human behaviour based on our longer evolutionary past.

        • Your Coyne link doesn’t work.

          I guess we agree about rapid evolution. But the ability to manipulate genetic endowments both before birth (even just gender selection) and increasingly after birth seems to make ‘epigentic’ factors loom quite large now. CRISPR bodes to be a major game changer.

          As you at least hint in spots, it’s useful to recognize mismatches between genetic legacies from the past and the current environment humans have created for themselves.

        • Peter harris

          On epigenetics, you are a skeptic huh.

          Well, I hope you’re a better economist, than you are a biologist.

          It still leaves me dumbfounded, to think there are so-called reputable biologists in this world who deny the existence and the mechanism of epigenetics.

          My God, it’s all around you, as evidenced by centuries of observation, and now through modern research. To deny the profound effects of epigenetics today, and that Darwinian, for neo Darwinian doctrine is still the guiding principles behind biology and evolution, is tantamount to the belief that the Sun still orbits the Earth. It proves one psychological fact, and that is even scientists can have too much pride, to admit they are wrong, even in the face of overwhelming evidence.

          • Juan Felipe Espinosa-Cristia

            Thanks that you raise this point Peter! Most of my Economist colleagues need to refresh their knowledge of evolution and in particular epigenetics.

          • Peter harris

            Yes, it’s rather staggering to think that some “scientists” still regard Epigenetics as voodoo science. I mean, my God, have they not come across, probably the most well-known experiment into epigenetics, the experiment done on agouti mice? That study clearly shows that the offspring’s colour changes, after they fed the pregnant mice a methyl-rich diet.

            I think its so irrefutable, it would be like denying, say for example, that ATP is not produced in the mitochondria, or moving away from biology, and to suggest that black holes do not exist in cosmology.

    • Cheers for the comment.

      Glyptodons became extinct around 10,000 years ago – likely due to human hunting.

      On the more substantive gap, you can’t cover everything in a single speech.

      • My mistake. Thanks.

        I agree you can’t cover everything in one speech. But the “substantive gap” I mentioned has a big effect on the whole thesis.

  • Re the peacock’s tail, my understanding of its significance (admittedly going back to graduate studies a few decades ago) is a bit different.

    Rather: Not all genetic features have to enhance ‘fitness’. They just need to be tolerable — not impairing reproductive success too much to persist.

    The appendix is a useless vestigial organ. People have them not because they confer any reproductive advantage certainly. But it does not significantly retard reproduction either. So it lingers.

    The idea that the peacock’s tail signals robustness then, while popular, is at least questionable. Males of many other species demonstrate robustness by combat or other displays of physical prowess. Presumably peafowl would be more ecologically fit if they selected physical fitness directly instead of merely as an ability to tolerate what otherwise is a handicap.

    If peahens really prized robustness, a male peafowl with wimpy feathers but a powerful, agile physique ought eventually to be preferred by females over more resplendent dandies. But if a peahens brain is just accidentally wired to be drawn to dandies rather than he-men, style will win out over substance. But only up to a point.

    If a peacock develops a tail that is too big and too ornate, at some point it become easy pickings for predators and will get killed off before it can reproduce. So predatory selection puts a ceiling on how much quirky sexual selection it will tolerate.

    • Adolfo Neto (UTFPR)

      The appendix is a “useless vestigial organ”? Are you sure?

      That’s the advantage of “behavioral economics”: they know they don’t know much.

      • Well, some have hypothesized lately that the appendix may be beneficial. But that is hardly settled.

        But in any case there are other possible examples to illustrate the key point: Not everything in the genome has to confer survival or reproductive advantage. Nor does.

        • Adolfo Neto (UTFPR)

          I agree.

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  • Ronald Olden

    Focus on the survival of the individual offspring is far more important to women than it is to men. The secret of success for the genes carried by a man is to have as many children as possible and if that means neglecting them after they’ve been conceived it doesn’t matter. It’s a better investment for men to have as many children as possible. Women have to ensure the survival of the few children they can give birth to. That’s why women are more choosy about who they mate with and try to get the best they can get. Men will have sex with anyone. And that’s also why men mislead women-often unintentionally- as to their motives and reliability. It also might explain why the Gay gene is carried in the female line. In previous ages it might have paid some women to have a non reproductive closely related male in the family to look after them. There’s less direct benefit to a reproductive man. Gay men are disproportionally likely to have older siblings particularly sisters. It also explains why there are far more exclusively Gay men than there are exclusively Gay women. But all this also explains why in evolutionary terms male offspring are far more valuable than female ones. They can sew more seeds

  • Steve

    is very straw man and a bit misleading to equate behavioural economics
    with early 1970s heuristics and biases, without mentioning prospect
    theory, reference dependence, the resulting and associated work of
    Kahneman and Tversky, Loewenstein, Rabin and others, and the
    accumulating evidence from neuro-science which appears to be largely
    consistent with much of prospect theory. I recommend Paul Glimsher’s
    Foundations of Neuro-Economic Analysis. It is almost as if the writer has only a nodding acquaintance with behavioural economics. Still very interesting though.

    • The first draft of the speech had a section taking on prospect theory, but I figured there was no point telling everyone about a theory they had never heard of only to pull it down. That could be the subject of a future post.

      • Steve

        The 1979 prospect theory paper is, I think, the second most widely cited paper in the history of economics. Surely, people have heard of it. It is the centre-piece of modern behavioural economics. Why would you want to pull it down? Are you disputing reference dependence? Loss aversion? Risk seeking over losses? Non-linear decision weights under risk? Ambiguity aversion? There are good evolutionary arguments for all these things. I don’t see a conflict between your ideas and theirs.

        • It was a marketing conference – so no, most of them haven’t.

          And no, I’m not disputing those observations. But putting them into package and calling it “theory” provides no analytical framework for why any of them exist. So although there is no conflict, we need to take another step.

  • Victor Venema

    So with a framework that explains rational behaviour as adaptive and irrational behaviour as signaling, is there any kind of behaviour about which you could not make a story that fits the theory?

    • Signalling can be (is often) rational. I’d describe the dichotomy as rational behaviour being adaptive, and irrational behaviour likely once adaptive for a past environment. I’d also describe a lot of supposedly irrational behaviour as being a misunderstanding as to what the person is trying to achieve.

      The theory is general, but needs to be incorporated with cultural and environmental factors. For example, an irrational behaviour may be cultural, but the explanation for why someone adopts that cultural behaviour would likely have an evolutionary element. But I’m sure there are behaviours that will resist this kind of analysis.

      • Victor Venema

        You can naturally redefine rational to include waste by signaling. That is exactly my problem with this theory, it seems like you can make everything fit. It seems likely that signaling exists, but if any behaviour can be explained by this framework it does not bring science much. Then it goes the way of psycho analysis, you can explain any psychological problem with something that might have happened in someone’s childhood. If the skateboarder had made less errors you would have written that a hot babe makes the boys concentrate more to show of their skill. There is always some story.

        • But you can test the hypothesis – that’s how science works.

    • rorysutherland

      I think this is a very shrewd point to make: along with the danger of “just so” stories, there is a risk we can make a signalling story out of almost anything – especially if you also allow for counter-signalling, which creates a whole new series of possibilities for post-rationalisation!

      However, whereas I am sure I have defended irrational behaviour on spurious signalling grounds more than once, I would rather commit this crime occasionally than attempt to construct a model of human behaviour where any form of signalling is assumed to be “inefficient”.

      “A flower is merely a plant with an advertising budget”.

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  • Philip Pilkington

    I’m very thankful that this sort of thinking might start to permeate economics. Post-Keynesian economists like myself have long thought in terms of Herbert Simon’s work and recognised that decision-making under uncertainty cannot be subject to probabilistic calculations. We’ve also been very skeptical of Behavioral Economics because of the reasons highlighted in your piece. If Evolutionary Psychology can be integrated into economics that will be a great leap forward.

    However, I cannot but have reservations about some of the claims made by Evolutionary Psychology. I think that there is a lot of truth in it but there are also aspects of human psychology that it finds difficult to explain. Well, I should be clear, it’s not so much that it finds it difficult to explain these features — as you showed with your astronomy example, any framework can be bent this way and that to fit the facts — it is that the a priori assumptions of the paradigm try to rule out certain behaviors as anomalies.

    What I refer to are the behaviors that the old psychoanalysts (yes I know you hate those guys, everyone does…) used to call the “death drive” or “Thanatos”. They thought that there was a strangely destructive urge in people that was not reducible to what Evolutionary Psychologists would think of as evolution (the psychoanalysts used to call this “life drive” or “Eros”). In many cases this death drive would have no connection to reproduction, as in anorexia nervosa or drug addiction. Often entire communities or “cults” can form around these death drives.

    Now, the evolutionists will label people who display these features as anomalies. They will think them sick. In evolutionary terms they are “weak”. Perhaps this is true. I see no reason to not think this. But that is just a means to force certain aspects of human existence into the a priori evolutionary paradigm. It is not true in and of itself. And that is why a “non-sick” person can be lulled into this behavior through influence; because there is something strangely innate about these curious features of the human mind.

    Basically, I think that the evolutionary paradigm is a good one for many purposes. But it is an a priori theoretical framework that classifies certain things as anomalies in order to be coherent — just like the old astronomers. It is certainly better than Behaviorism in this regard. But it is still an interpretive paradigm. And it has limits.

    • Your bringing up ‘death drive’ prompted me to wonder if the terms “rational” and “irrational” need to be more carefully defined.

      Consider the suicide bomber who devoutly believes that an act of aggressive self-destruction in Jihad will earn him eternal rewards in Paradise. Many of us may view his behavior as irrational, even crazy, because we do not believe the premise is true. But there is no way to know whether it is true or not that Paradise exists and the eternal rewards will in fact be delivered. If one accepts that the premise is true, the behavior that follows does not necessarily seem irrational.

      Collins in a preceding comment says in relation to signaling that “you can test the hypothesis — that’s how science works.” But you can’t test the Jihadist’s hypothesis. In Kant’s sense, it is not the stuff of science because it is unknowable. Yet it is the stuff of science to the extent that Jihad and suicide attacks are empirically real, observable phenomena.

      Indeed, a colleague of mine with considerable experience in security studies and counterterrorism has applied econometric tools such as utility functions to explain the strategies and tactics insurgent movements employ. (He has little interest in behavioral economics.)

      • Philip Pilkington

        I suppose the standard rationality approach wouldn’t have a problem with this. They work on “revealed preference” so if the utility of the suicide bomber was to blow himself up that would fit with their paradigm. You see similar “rational irrationality” in noise trader models where the noise traders derive utility from… being noise traders. It all strikes me as being tautological, if I’m to be frank. Utility used to mean “maximising pleasure and minimising pain”. But by effectively saying that noise traders or suicide bombers find pleasure in pain, the whole thing becomes meaningless.

        An evolutionary approach would have little problem with the suicide bomber. He would be sacrificing himself in the name of the gene pool that he wants to promote. This is fine from an evolutionary point-of-view. It’s more so the cases of meaningless aggression which highlights the shortcomings of the approach. Anorexia nervosa is a good case in point; or masochistic behavior generally, like addiction. These actions do not serve any meaningful “evolutionary” purpose. So the paradigm has to chalk them up as “defective cases”.

        All in all, its fine to chalk some behaviors up as “defective” — although I would ask if evolutionary theorists are willing to follow this through to its logical conclusion and make the case that, say, homosexuality is a “defective” behavior; as it clearly must be within their own paradigm. My problem is more so that certain baseline aggressive tendencies — ones that do not aim at any “evolutionary” goals — seem to be innate in humans. They seem open to “activation” and so chalking them up as “defective” appears to me a moral judgement. It may be a perfectly correct moral judgement — or it may not — but if that is what we’re dealing with here then some clarity is in order.

        • Thanks. Those are helpful observations.

          It does occur to me though that terrorists who encourage their children to blow themselves up are not showing a lot of concern about the gene pool.

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  • Bryan

    The problem I have with this whole sex-based approach to modern human behaviour is it assumes that sex has an effect on culture but that culture has no effect on sex. What I mean by this is that all of the principles referred to existed in the Paleolithic period – men choosing mates or vice versa, reproductive fitness etc. This is partly because of the bias of science which assumes that there are concrete underlying laws which govern behaviour in the universe. That the humans of ages ago must fundamentally operate under the same rules as we do today.

    That absolute approach ignores one fact which is that history is a linear and unique process, particularly when it comes to evolution of species. While gravity is a fundamental law of the universe, evolution has very little timelessness to accomodate such laws. Instead, there is a often linear, perpetual state of change for species especially our own.

    Darwin’s work on earthworms was interesting because the worms make the soil more suitable for themselves through bioturbidation. Richard Lewontin went on to talk about how organisms live within their own ecological niches. Humans do the same. Not only have we experienced agricultural and technological revolution, but we’ve become more self-dependant, more capable of controlling and bending nature, and less adherent to the principles of natural selection. We’re able to think more abstractly about life and death and what our lives mean. Scientists are eager to suggest theories like kin selection as explanations to warfare, religious martyrdom and other self-disinterested behaviours, but perhaps the real explanation is that our species has been able to perceive it’s own mortality, significance, and to evaluate why we behave in the ways that we do.

    That also extends to why we have sex, and why we reproduce and what the purposes of that reproduction are. For example, we are aware of evolution – that awareness alone means that our reproductive choices are shaped differently to how they would have been naturally. But rather than make us more prone to make survival choices and to mate in utilitarian fashion, I believe civilisation has made us more whimsical, aesthetically influenced by our own styles and morals, and more prone to act in abstract ways – not necessarily rational in a direct sense, or irrational, but abstractly rational, such as wanting to choose a partner less sexually as a part of our desire to be more human and less animal; to name but one example. That’s why I believe that the sexual approach to any sort of human psychology is very misleading and stops short of any decent explanation to our behaviour. Human culture and history is at least as influential in shaping what we find attractive and how we make life choices as the genes we are given by our ancestors.

    • Good points, Bryan. They echo some arguments I raised elsewhere here.

    • Juan Felipe Espinosa-Cristia


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  • Sarah

    Though I have no issues with the sexual signalling in this presentation and as you have said in other coments you can’t cover all aspects of evolutionary biolgy that impacts economic ‘decisions’. It is very masculine in its approach which even economic/advertising terms makes the ‘sex sells’ concept very easy to understand. As much as evolution is about passing on your genes through reproduction a more critical point is that you have to survie long enough to actually have a chance to reproduce. So what are the ‘consumer’ social choices one makes to ensure survival. In this instance I am thinking more about how in our evolutionary history every one of our ancestors had to have employed successful survival stratergies just to repoductive age. Many of those stratergies, from the work of Dawkins in the selfish gene, were most likely altruistic in nature where resources such as food which often quickly went bad. In this instance the best place to store that food was in someone elses stomach, such that they would reciprocate when they had spare food and you were hungry. (Think vampire bats). Surveys and economic behaviour patterns of the poor still demonstrate this type of alturism when it comes to giving not only food but money. However, as your economic security increases the likelihood of you giving (as a percentage of income) decreases. I would posit that this is because the money is need no longer for survival but for sexual signalling and thus horded to produce sexual signalling.

    So I have two questions. How does economic behaviour change according to the need to survive and the need to sexually signal and what is that point ( in terms of income). And how has the fact that money is a ‘non degradable’ commodity in todays economic relem altered human behaviour given that we evolved in a context where the vast majority of commodities quickly degraded and could not be stored. In other words how would behaviour change (or more correctly revert back due to a correction of a backfire) if money was degradable (ie loses value if not used over time).

  • The presentation is filled with an everyman model and pursues a circular logic. Relies on decision experiments that are widely discredited for ignoring the experimental context. Ignores thousands of years of civilisation, the changing cultural imposition of gender norms, how the reach for status, risk, conspicuous consumption is fuelled by a capitalist value system. In ignoring the role of social origins and reducing every behaviour to drive for reproduction it is a deeply depolitizing model of behaviour. It’s straight out of the widely discredited John Gray Venus Mars nonsense.

    Here’s some advice, read some sociology books. Read some Bourdieu, Gramsci, Goffman, Sayer, anything on relational sociology. Also look up the definition of dispositions, habitus and empathy. The latter has been called an evolutionary misfire in the literature field you refer to but is central to cooperation necessary for civilisation to take place effectively and for some people to develop a concern for such things as social justice and helps explain how everybody is simply not out for themselves and the satiation of their libido.

    As I said you use a typical everyman, universal subject generalisation (largely based on some weak experimental stuff and imagined – circularly reasoned – scenarios) and thereby fail to account adequately for difference. Yes I know different
    environments can make different tools work better but you completely
    disregard how different environments can encourage different persons,
    goals, dispositions

  • I agree with most of what you wrote, and I suspect we might agree about most things, and to me there are some very important aspects of the context that are missing, and are needed to give any sort of coherent overview.
    In this sense I agree completely with your sentence “Obviously, to understand humans you need to understand our evolutionary past”.

    Three major concepts that need to be explicitly added to the mix:
    Deep time,
    heuristic hacks,
    major modalities.

    Agree completely that context is critical, and one also needs to take a deep time view of context, and the sorts of things that have occurred over deep time – some high probability low impact, and others low probability high impact.
    When you look at the sort of things that can happen, very rarely, like super-volcano explosion followed by years of growing season failure and mass starvation, then the idea that people “accumulate resources far beyond those required for survival” isn’t as sensible as it might seem to many.
    Those tendencies to hoarding can be very costly, and they can come with very high payoffs.

    You mentioned our liking for sweet things, and that is perhaps the worst heuristic hack present in today’s context – where sugar consumption is the single largest risk fact in diabetes, heart disease and cancer.

    You mentioned context many times, but no explicit reference to the major modalities of competitive versus cooperative behaviours. In times of sufficient abundance for all, we come pre-primed with a large suite of behaviours that strongly support cooperation between individuals. And in contexts where there is insufficient for all to survive, we all also carry a suite of highly competitive behaviours.
    Humans are both, and which gets expressed is very much a matter of context.

    Perversely, as people do get sufficient resources to not need to compete, often the tendency to hoarding can take over and become the dominant strategy present if the more cooperative social strategies are not strongly reinforced.

    So it is a many levelled and many dimensioned set of contexts and probabilities to action. Any given context may result in hundreds of different heuristics from our past (genetic and cultural) contributing to the probabilities that lead to whatever action we actually take. And there can be many levels of context present simultaneously, and we can learn to consciously shift weightings between levels or between competing contextual interpretations within any level.

    So yes our deep evolutionary past is important (genetically and mimetically) and our conscious choices and our application of intentional will to the control of our own internal tendencies to both identify and classify contexts, and to modulate the responses appropriate to those contexts, can have a huge impact on who we get to be in reality.

    Evolution matters, and we each have the individual ability to evolve who we are beyond the default dictates of our genetic and cultural past, and we can only do that by becoming conscious of as many levels of those defaults as possible, and retraining our neural networks accordingly.

  • Sanjit Dhami

    I have only just given this a quick glance. I am pretty dismayed at the discussion on behavioural economics–it is highly misleading and utterly incomplete at best. I normally do not participate in these discussions but the scale of injustice done to behavioural economics in this post compels me to.
    To equate heuristics and biases with the entire subject matter of behavioural economics is quite naïve. In a forthcoming book: Sanjit Dhami (September 2016) “Foundations of Behavioral Economic Analysis”, Oxford University Press, heuristics and biases is one of 23 chapters in the book ( Incidentally, this book is endorsed by most of the leaders in the field.
    The writer is quite confused on many points. For instance, while the availability heuristic is a bias relative to reasoning based on classical statistics, the endowment effect is not a cognitive bias, as it is claimed. It is a part of one’s preferences and arises from loss aversion. When discussing heuristics and biases, behavioural economics relies on a relatively small set of such heuristics–indeed Kahneman and Tversky relied on just 3-4 heuristics. Many of them are subcases. For instance, the gambler’s fallacy and hot hands are simply special cases of the representativeness heuristic. Citing a list of 165 biases from the wiki is simply a misunderstanding of how this literature is used.
    It is completely artificial to treat evolutionary game theory separately from behavioural economics. The two are complementary. For instance, how else would you make sense of the empirical fact that the median loss aversion in humans and capuchin monkeys is 2.25? How else would you understand reciprocity? Indeed evolutionary game theory is a separate chapter in Dhami (2016) above. Interweaving behavioural economics and evolutionary game theory is also the approach taken in Herbert Gintis (2009) The bounds of reason, PUP.
    The writer seems to suggest that the Gigerenzer and Kahneman-Tversky positions are at odds with each other. This is a mistake that people who have not read the original set of articles often make– and these are by far in the super-majority. The truth is that these two groups (called the great rationality debate in psychology) deal with quite different problems and their positions are complementary not antagonistic. I refer you to a chapter length treatment on these issues in Dhami (2016).
    I would like to ask people who express reservations about behavioural economics: Have you taken a proper course on the subject (informally on your own or formally in a class)? Little knowledge is dangerous–nowhere more so than here–where the heart and soul of economics are at stake. Go read-up, tool-up, with a proper behavioural text before you pontificate.

  • I’m glad that Richard Thaler has been recognized for his economic heresy. I’ve read some of his work and admire what he’s done. However, I think we need to overthrow the myth that economics is a rational enterprise, and rethink our theories. I propose that the economic system is merely an example of homeostasis at work and it would be more sustainable if reason was re channeled by diverse, well-regulated political boundaries.

    The keys to homeostasis are sufficient diversity and flexibility of distribution channels and feedback paths, and a chronic surplus of supply. Homeostasis is at work in the human body and in evolution. The distribution of food and oxygen and the collection of CO2 and wastes are all homeostatic processes. Homeostasis flexibly balances supply to demand locally and globally, even when there are significant perturbations in supply, demand, supply channels, the environment, etc. Chronic surpluses of supply in the economic system are enabled by a statistical bias towards optimistic behavior rooted in the biology of the human brain. When we are depressed we are most rational!

    However, in an economy, the risks to suppliers are continually greater than those to the users because suppliers must create products, distribute them and support chronic surpluses for months or years. Some suppliers eventually conclude, quite logically, that they are vulnerable to competition and random events, and recognize that scale, simplification, and domination are ways to limit their risks. These actions protect the supplier but reduce the adaptability of the economic system for that product or service. Users don’t invest anything until they “buy,” so that they have no rational incentive to organize and simplify the system. Whether or not they behave rationally has little effect on the economic system except in response to suppliers’ machinations.

    Rational behavior of suppliers has logically produced the national and global concentrations of wealth and political power into the hands of a few to the ultimate detriment of the many.

    Rational suppliers produce a less sustainable system. However, they make trade-offs which enable humans to prosper, for a while. Not bad to a degree, but destructive in the extreme. The problem is that we have no social mechanisms for keeping things from going to extremes that make the system so efficient that it has no life expectancy. Civilization is the rabbit, evolution is the tortoise.

    If my thesis interests you, let me know. I’m looking for an economist or two to informally discuss these ideas and many others related to evolution, economics, and politics. I’m not an economist, merely an engineer and entrepreneur who has studied the processes and trade-offs of evolution and science for the last two decades. I’m working on a book titled Rehabilitating Capitalism and Democracy. The first chapter deals with the erroneous founding myths of Capitalism and Democracy which are now being used, by pathogens, to undermine their adaptability and assure their mutual collapse.

    Obviously I support Evonomics.

  • fabrizio ghisellini