ABSTRACT

Cognitive science meets evolutionary theory – that is how evolutionary psychology (henceforth: EP) often is characterised. And indeed, as we shall see, one of EP’s main objectives is to point out the evolutionary raison d’être of information-processing modules in the human mind. EP not only sets out to explain why we have the modules that we have, but also aims to facilitate the identification of hitherto unknown modules. In this chapter I try to explore what potential contributions EP can make to economics. As a starting-point I take two recent attempts made by economists to connect evolutionary theory in general, and EP in particular, with economics. First Oliver Williamson’s (1998) argument is addressed that EP supports the ‘transaction cost triple’ for describing human agents: opportunism, bounded rationality and farsighted contracting. The second attempt to relate evolutionary theory to economic theory is made in the so-called indirect evolutionary approach. This approach aims to explain what basic preferences evolutionary processes have endowed us with. The indirect evolutionary approach assumes that the insights of evolutionary theory can readily be accommodated within the analytical framework of standard economic theory. After a brief discussion of EP’s essential features an effort is made to find out which of the two attempts gets the main thrust of EP right.1 It is argued that after having had a first, superficial glance it seems that each of the two attempts is partly right and partly wrong. But if we dig deeper it turns out that at a more fundamental theoretical level they both got it wrong. It will be pointed out that EP’s basic presuppositions are incompatible with presuppositions underlying both Williamson’s transaction cost economics and the indirect evolutionary approach. The chapter concludes with a few speculations about alternative ways to link EP with economics.