Evolutionary thinking in microeconomic models: prestige bias and market bubbles.

ABSTRACT: Evolutionary models broadly support a number of social learning strategies likely important in economic behavior. Using a simple model of price dynamics, I show how prestige bias, or copying of famed (and likely successful) individuals, influences price equilibria and investor disposition in a way that exacerbates or creates market bubbles. I discuss how integrating the social learning and demographic forces important in cultural evolution with economic models provides a fruitful line of inquiry into real-world behavior.

SUBMITTER: Bell AV 

PROVIDER: S-EPMC3609813 | biostudies-literature | 2013

REPOSITORIES: biostudies-literature