Economic Darwinism

We define an evolutionary process of ‘economic Darwinism’ for playing the field, symmetric games. The process captures two forces. One is ‘economic selection’: if current behavior leads to payoff differences, behavior yielding lowest payoff has strictly positive probability of being replaced by an arbitrary behavior. The other is ‘mutation’: any behavior has at any point in time a strictly positive, very small probability of shifting to an arbitrary behavior. We show that behavior observed frequently is in accordance with ‘evolutionary equilibrium’, a static equilibrium concept suggested in the literature. Using this result, we demonstrate that generally under positive (negative) externalities, economic Darwinism implies even more under‐ (over‐)activity than does Nash equilibrium.