Cultural evolution and constitutional public choice: Institutional diversity and economic performance on American Indian reservations

Stephen E Cornell, Joseph P. Kalt

Research output: Chapter in Book/Report/Conference proceedingChapter

3 Scopus citations

Abstract

In a major contribution to social science reasoning, Armen Alchian set forth in “Uncertainty, Evolution, and Economic Theory�? an alternative to neoclassical economic mechanisms of change and equilibration in individual and organizational behavior (Alchian, 1950). Alchian’s mechanism - what he called “environmental adoption�? - replaced orthodox utility maximization and profit maximization with agents that draw on suites of adaptive, imitative, trial and error, lucky, and goal-directed strategies. With conscious use of Darwinian language, Alchian defines success in terms of survival, and surviving strategies are selected on the basis of their relative performance (fitness) in an environment in which resource constraints mean that not every strategy can survive. Rationality, in the usual sense of informed transitive choice over more or less complete preference orderings under conditions of scarcity, remains standing only as a special case of models that produce downwardsloping demand schedules and (relatively) efficient outcomes.

Original languageEnglish (US)
Title of host publicationUncertainty and Economic Evolution
Subtitle of host publicationEssays in Honour of Armen Alchian
PublisherTaylor and Francis
Pages116-142
Number of pages27
ISBN (Electronic)041515166X, 9781134745616
ISBN (Print)9781138986374
DOIs
StatePublished - Jan 1 2005

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)
  • Business, Management and Accounting(all)

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