Agents in Economic Markets and Games
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6.5.5 Continuous Strategies
Most theories in game theory and evolutionary game theory are based on
discrete strategies. Contrastingly in economics most strategies are continuous
variables like the prices or the production by a company. In such situations
the population stabilizes in one of the three following conditions [187]:
• There is a unique x, such that if all players play x, no mutant (new) y
can invade the population.
• There is a certain distribution (δx), which states that population lies
between (x) and (δx + x).
• There is no ESS in the population.
6.5.6 Red Queen and Equilibrium
Red Queen Dynamics, a name borrowed from one of Lewis Caroll’s [38]
characters, is the term given to the constant evolutionary arms race between
more than one species evolving together. For instance in the scenario of a
predator-prey model, the predator is continuously searching for the prey and
adapting its path to increase the chances of finding food. At the same time, the
prey would be adapting itself to find new paths to get away from the predator
to prevent being eaten. When put together both predator and prey enter into
the evolutionary arms race, each working for their own benefit, evolving their
behavior constantly.
Valen [196] describes the need for the Red Queen effect saying that “for
an evolutionary system, continuing development is needed just in order to
maintain its fitness relative to the systems it is coevolving with”. However the
Peter principle states “evolution systems tend to develop to the limit of their
adaptive competence” [147]. This shows that at a certain point the system
reaches a maximum, where their adaptiveness is not benefitting the actors
any more. This stage can be referred to as the reaching of an equilibrium,
where evolving further behavior by any of the species will not benefit either
of them. This concept is similar to the Nash equilibrium and the solutions of
Evolutionary Stable States as the populations momentarily stabilize at this
point.
Researchers like Malthus [126] supported the idea that populations would
always grow until there is a limit of resources. Boserup [29] argued that populations devise new methods for food production when required instead of
letting it affect them. This supports the theory that if the economy is doing
well the populations would grow and do better. However, this does not seem
to happen in real economics, where the broad middle class depicts the wide
gap between the upper and lower classes.
163
6.5.5 Continuous Strategies
Most theories in game theory and evolutionary game theory are based on
discrete strategies. Contrastingly in economics most strategies are continuous
variables like the prices or the production by a company. In such situations
the population stabilizes in one of the three following conditions [187]:
• There is a unique x, such that if all players play x, no mutant (new) y
can invade the population.
• There is a certain distribution (δx), which states that population lies
between (x) and (δx + x).
• There is no ESS in the population.
6.5.6 Red Queen and Equilibrium
Red Queen Dynamics, a name borrowed from one of Lewis Caroll’s [38]
characters, is the term given to the constant evolutionary arms race between
more than one species evolving together. For instance in the scenario of a
predator-prey model, the predator is continuously searching for the prey and
adapting its path to increase the chances of finding food. At the same time, the
prey would be adapting itself to find new paths to get away from the predator
to prevent being eaten. When put together both predator and prey enter into
the evolutionary arms race, each working for their own benefit, evolving their
behavior constantly.
Valen [196] describes the need for the Red Queen effect saying that “for
an evolutionary system, continuing development is needed just in order to
maintain its fitness relative to the systems it is coevolving with”. However the
Peter principle states “evolution systems tend to develop to the limit of their
adaptive competence” [147]. This shows that at a certain point the system
reaches a maximum, where their adaptiveness is not benefitting the actors
any more. This stage can be referred to as the reaching of an equilibrium,
where evolving further behavior by any of the species will not benefit either
of them. This concept is similar to the Nash equilibrium and the solutions of
Evolutionary Stable States as the populations momentarily stabilize at this
point.
Researchers like Malthus [126] supported the idea that populations would
always grow until there is a limit of resources. Boserup [29] argued that populations devise new methods for food production when required instead of
letting it affect them. This supports the theory that if the economy is doing
well the populations would grow and do better. However, this does not seem
to happen in real economics, where the broad middle class depicts the wide
gap between the upper and lower classes.