Evolving to the Impatience Trap The Example of the Farmer….pdfVIP

Evolving to the Impatience Trap: The Example of the Farmer-Sheriff Game1 BY DAVID K. LEVINE, SALVATORE MODICA, FEDERICO WEINSCHELBAUM AND FELIPE ZURITA First Version: July 22, 2010 This Version: September 18, 2011 Abstract The literature on the evolution of impatience, focusing on one-person decision problems, finds that evolutionary forces favor the more patient individuals. This paper shows that in the context of a game, this is not necessarily the case. In particular, it offers a two- population example where evolutionary forces favor impatience in one group while favoring patience in the other. Moreover, not only evolution but also efficiency may prefer impatient individuals. In our example, it is efficient for one population to evolve impatience and for the other to develop patience. Yet, evolutionary forces move the wrong populations. 1 We thank Fernando Vega-Redondo, Ramon Marimon and participants at the EUI Microeconomics working group for helpful comments. We are grateful to NSF grant SES-03-14713 for financial support. 1 1. Introduction Why are we often more impulsive than we might like to be? To take one of many examples: although the “cost” of getting a copy of a new book or the last model of a computer decreases substantially with time, few people choose to wait. Moreover, in some cases there are people that spend the night in line to be the first buyers. From the perspective of evolution this poses a puzzle: evolution favors the very long run. Given the great variation in patience