An Evolutionary Model of Economic Behavior, Bounded Rationality, and Intelligence
summary
A simple evolutionary model has agents that inherit a fixed mixing probability F for a binary choice and reproduce with random offspring XA or XB; with shared vs idiosyncratic risk the math (population arithmetic, LLN, simulations) yields either exact probability matching at 75% (shared draws: 75% sunshine → F*=0.75) or deterministic play (IID draws), explains why optimizing agents (F=1) get wiped out by the first rain, shows 99.9% inheritance with 0.1% mutation preserves all Fs, and defines intelligence as positive action–outcome covariance.
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chapters (8)
- 0:00Intro
- 0:50Motivation
- 8:06Binary Choice Model
- 18:27Population Arithmetic
- 22:10Probability Matching Explained
- 34:15Systematic vs. Idiosyncratic Risk
- 38:12Bounded Rationality and Intelligence
- 41:17Other Extensions
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