Selection Pressure in Strategic Environments

University Of California-Irvine, Irvine CA

Investigators

Abstract

Competition for scarce resources in the face of birth and death (the struggle for survival) has shaped social and economic interaction since the very beginnings of mankind. This research is the first to induce selection pressure in controlled strategic decision-making experiments using performance-based replacement of participants over time. The studies advance unique insights into how real-life human decision makers manage short- versus long-term strategic tradeoffs in the face of evolutionary competition. The effect of selection pressure on strategic decision-making is assessed by comparing two treatment conditions. In the selection pressure condition participants' survival (and payoffs) depend on their performance relative to that of other participants. Performance is evaluated every few periods and participants earning low payoffs relative to their peers are more likely to be replaced by new, inexperienced performers. In the control, no pressure condition, participants are selected for removal with the same frequency as under the selection pressure situation, but removal is random rather than based on relative performance. This experimental design enables the causal identification of the effects of selection pressure on behavior. Strategic decision-making is considered in three well-known economic applications, each with and without selection pressure. The first application is to repeated Tullock-type rent seeking contests. The experiment uses selection pressure to empirically separate evolutionary adaptive and maladaptive psychological mechanisms that have been proposed to explain the intensely competitive behavior of contestants in previous contest experiments that lacked selection pressure. The second application concerns evolving norms and social change. Selection pressure in repeated coordination games is used to study how short-term risks and long-term gains lead to path-dependencies in experimental equilibrium selection. The final application is to bargaining. In repeated Nash Demand games, the study addresses whether selection pressure helps increase the efficiency of bargaining conventions relative to results from previous experiments without selection pressure. This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.