Re-reading Beinhocker

The book by Beinhocker "The Origin of Wealth" parallels Darwin's "The Origin of Species" and presents the foundations of a complex evolutionary approach to economics. I read it some time ago and I re-read it now to talk about complexity and evolution in soccer for my class on soccer and economics in the Study Abroad programme in Barcelona. The book shows that combining the prisoner’s dilemma with the “game of life” one can see patterns in the evolution of successful strategies (Lindgren, 1997). In the Game of life cells that develop successful strategies (the ones that obtain a higher payoff when playing with others the prisoner's dilemma) occupy the space of less successful cells after playing against them and their neighbours. Each cell in a grid is randomly endowed with one of the strategies in the prisoner’s dilemma repeated game. 

In addition, random mutations (small changes in the strategies) and errors are introduced. The cell grid then experiences changes in patterns of more or less cooperative strategies, depending on initial conditions and proportion of errors and mutations.

There are lessons derived from analyzing many rounds of play:

–There is no stable equilibrium.

–There is no single successful strategy (who is the winner? what is the best strategy? are 
non-sensical questions).

–Highly successful strategies today might be real losers in a hundred years,

–and the most successful strategies in a century might be ones that were only modestly  
successful today, or don’t even exist yet.

–Some strategies do not even survive, and others are the “cockroaches” of the game: 
simple  strategies like Tit for tat, which never dominated, but seemed somehow to survive 
and make a living, no matter what else was going on.

–Strategies that use longer memories achieve higher payoffs.

–Patterns of punctuated equilibrium: long periods of stability followed by sudden change.
 The book then goes on to apply these insights to business and organization strategy, and the 
main lesson is that what is important is not to learn to become successful, but to learn to be 
good evolvers.