State power and conflict driven evolution

Abstract

The goal of this chapter is to examine the implications of the evolution of social organizations due to external competition. There are a variety of models of external competition. Models such as Ely (2002) examine voluntary migration - these models tend to efficient outcomes as people are drawn to locations with high per capita income. Historically, however, institutional success has not been through voluntary immigration into the arms of welcoming richer neighbors. Rather people and institutions have generally spread through invasion and conflict: the Carthaginians did not emigrate to Rome. Large institutional change has often occurred in the aftermath of the disruption caused by warfare and other conflicts. Hence it seems worthwhile studying external competition through conflict, which is the focus of this chapter. It is common to develop fact driven theories: a historical fact or laboratory anomaly is observed and a theory is introduced to explain that fact. Here we focus on using theory to analyze facts and particularly facts it was not designed to explain. The theory as indicated is external competition through conflict. The theory itself tells us what facts and data to look for. In a dynamic setting of a game or mechanism in which punishments and rewards are possible most social arrangements arise as equilibrium - this finds sharp definition in the folk theorem of repeated games (see Fudenberg and Maskin (1986)) but is a much broader observation. The goal of evolutionary game theory is to ask which of these many feasible institutions and arrangements are persistent, which are durable, which will we see in the long-run. Here we preview our results.