Norms as Emergent Properties of Adaptive Learning: The Case of Economic Routines

Posted: 5 Mar 1999

See all articles by Giovanni Dosi

Giovanni Dosi

Scuola Superiore Sant'Anna di Pisa - Laboratory of Economics and Management (LEM)

Luigi Marengo

University of Trento - Department of Economics and Management; University of Teramo - Faculty of Law

Andrea Bassanini

Organization for Economic Co-Operation and Development (OECD); IZA Institute of Labor Economics

Marco Valente

University of L'Aquila - Faculty of Economics

Abstract

Interaction among autonomous decision-makers is usually modelled in economics in game-theoretic terms or within the framework of General Equilibrium. Game-theoretic and General Equilibrium models deal almost exclusively with the existence of equilibria and do not analyse the processes which might lead to them. Even when existence proofs can be given, two questions are still open. The first concerns the possibility of multiple equilibria, which game theory has shown to be the case even in very simple models and which makes the outcome of interaction unpredictable. The second relates to the computability and complexity of the decision procedures which agents should adopt and questions the possibility of reaching an equilibrium by means of an algorithmically implementable strategy. Some theorems have recently proved that in many economically relevant problems equilibria are not computable. A different approach to the problem of strategic interaction is a "constructivist" one. Such a perspective, instead of being based upon an axiomatic view of human behaviour grounded on the principle of optimisation, focuses on algorithmically implementable "satisfycing" decision procedures. Once the axiomatic approach has been abandoned, decision procedures cannot be deduced from rationality assumptions, but must be the evolving outcome of a process of learning and adaptation to the particular environment in which the decision must be made. This paper considers one of the most recently proposed adaptive learning models: Genetic Programming and applies it to one the mostly studied and still controversial economic interaction environment, that of oligopolistic markets. Genetic Programming evolves decision procedures, represented by elements in the space of functions, balancing the exploitation of knowledge previously obtained with the search of more productive procedures. The results obtained are consistent with the evidence from the observation of the behaviour of real economic agents.

JEL Classification: C63, D43, D83

Suggested Citation

Dosi, Giovanni and Marengo, Luigi and Bassanini, Andrea and Valente, Marco, Norms as Emergent Properties of Adaptive Learning: The Case of Economic Routines. Available at SSRN: https://ssrn.com/abstract=149148

Giovanni Dosi

Scuola Superiore Sant'Anna di Pisa - Laboratory of Economics and Management (LEM) ( email )

Piazza Martiri della Liberta, 33
Pisa, I-56127
Italy

HOME PAGE: www.lem.sssup.it

Luigi Marengo (Contact Author)

University of Trento - Department of Economics and Management ( email )

Via Inama 5
Trento, I-38100
Italy

University of Teramo - Faculty of Law ( email )

Loc. Colleparco
Teramo 64100
Italy

Andrea Bassanini

Organization for Economic Co-Operation and Development (OECD) ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France
+33 1 45 24 90 32 (Phone)
+33 1 45 24 90 98 (Fax)

HOME PAGE: http://https://sites.google.com/site/bassaxsite/home

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Marco Valente

University of L'Aquila - Faculty of Economics ( email )

Piazza del Santuario, 19
Roio Poggio, AQ, 67040
Italy

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