Hunting, gathering, investing, globalizing: The biological roots of economic behaviour

Abstract

AbstractThe emerging discipline of behavioural economics has established that humans do not follow the canonical rules of rational utility maximization that were the foundation of neoclassical economics. If people were rational economic agents, their behaviour would be highly predictable. No unifying predictive framework for actual economic behaviour has emerged to replace the canonical assumption of utility maximization. I suggest here that evolutionary biology can play a role in forging a new theoretical framework for behavioural economics. I argue that some apparently irrational economic behaviours can be understood as products of the hunter–gatherer ecology in which humans evolved. I discuss three examples of anomalous behaviour: hyperbolic time discounting, context‐dependent preferences and contribution to public goods. In each case, ‘irrational’ decisions are less surprizing when we recognize the evolutionary roots of the behaviour. Cultural effects remain relevant in an evolutionary account of economic behaviour. Indeed, an evolutionary perspective may help us anticipate economic behaviour and create sustainable societies in the novel, globalized economy that we have created. Copyright © 2010 John Wiley & Sons, Ltd.