Armin Schulz
It is increasingly widely accepted that there are systematic differences in the ways in which humans make economic decisions. So, for example, it has been found that there are gender differences in risk aversion, as well as cultural differences in sharing norms. What is not yet clear is whether these differences are fundamental or merely evoked: are they just a product of differences in the decision situations faced by different humans, or are they a product of differences in the fundamental psychological makeup of different humans? Answering this question matters, as it has implications for how universally valid economic theories are.
Importantly, while it is clear that addressing this issue requires comparative empirical studies concerning economic decision-making, this does not mean that an appeal to evolutionary biology could not be useful here as well. In particular, given the complexities involved in studying the mechanisms underlying economic choices, an appeal to evolutionary biology can provide useful further evidence concerning the fundamentality of the diversity in economic decision-making. It is the aim of this paper is to analyze the promises and challenges of this appeal to evolutionary biology further.
The paper begins by laying out what is—and what is not—methodologically required to underwrite evidentially compelling evolutionary arguments for or against the fundamentality of human diversity in economic decision-making. It shows that these arguments need to be both internally coherent—plausible in their own right—and externally coherent—consistent with other findings in the literature. However, it also shows that these arguments do not need to provide a full account of the relevant issues—a partial account is all that is needed to make a useful contribution to the literature.
The paper then applies this methodological standard to two specific arguments for or against the fundamentality of the two forms of diversity in human economic decision-making mentioned above. It first considers the argument that since males and females have different “minimal parental investment,” gender differences in risk aversion are fundamental. Here, the paper shows that this argument is not internally compelling, as it fails to analyze mating decisions as a strategic interaction involving two different time horizons—in which levels of minimal parental investment are merely an input into the analysis, and not its final arbiter. Second, the paper considers the argument that since it is adaptive for all humans to share in line with the same biological principles (such as Hamilton’s rule), cultural differences in sharing norms must be merely “evoked.” Here, the paper shows that this argument fails to be externally coherent, as there is much evidence that operationalizing the relevant biological principles is complex and requires information about the locally prevailing conditions (e.g. who is kin with who). In turn, this makes it more plausible that sharing norms are culturally learned—and thus fundamentally different.
In all: the paper shows that while the appeal to evolutionary biology can say something about the nature of human diversity in economic decision-making, this appeal needs to be handled carefully.
