F.A. Hayek’s theory of mind and theory of cultural ...egick/mind_and_society_2001.pdfMind & Society, 3, 2001, Vol. 2, pp. 149-162 9 2001, Rosenberg & Sellier, Fondazione Rosselli

Mind & Society, 3, 2001, Vol. 2, pp. 149-162 �9 2001, Rosenberg & Sellier, Fondazione Rosselli

F.A. Hayek's Theory of Mind and Theory of Cultural Evolution Revisited:

Toward an Integrated Perspective

Evelyn Gick a, Wolfgang Gick b•

a PhD Candidate, Department of Economics and Business Administration, University of Jena, Germany contact address: 7 Austin ave., Hanover NH 03755, USA,

e-mail: [email protected]

b Department of Economics, Dartmouth College, Hanover NH 03755-3514, USA, e-mail: wolfgang.gick@ dartmouth.edu

(Received January 2001, accepted August 2001 )

Abstract EA. Hayek's theory of cultural evolution has often been regarded as incompatible with his earlier works. Since it lacks an elaborated theory of individual learning, we try to back his arguments by starting with his thoughts on individual perception described in his Theory of Mind. With a focus on the current discussion concerning biological and cultural selection theories, we argue his Theory of Mind leads to two different stages of societal evolution with well-defined learning processes, respectively. The first learning process describes his Morality of Small Groups, in which ftayek ~ thoughts coin- cide with learning theories that do not allow for the perception of behavior from outside the group. His second stage of cultural evolution, the Open Society, involves a different kind of learning behavior. We connect this notion with a model of local interaction in which the cultural learning aspect is addressed by a distinction between interaction and learning neigh- borhoods. This results in a situation in which individuals change their strategy and - depending on the radius of interaction and learning neighborhood - eventually may adopt new strategies that lead to higher payoffs.

Keywords interaction.

Theory of mind, dispositions, cultural evolution, cultural learning, local

Hayek's theory of cultural evolution has often been regarded as a detached part of his oeuvre, and yet it deserves to be recognized as more than an unfinished lega- cy. Hayek not only devoted an enormous time to develop his thoughts on cultural evolution, he also claimed he had much more to say than simple economics had been able to. Today, it would still be a daunting task to deliver a complete model that covers his process of cultural evolution entirely. We therefore try to take a different approach in order to Shed some light on his arguments from a current perspective.

To understand Hayek's theory of cultural evolution, one needs to focus on his concept of morality, which he uses in a positive perspective. Morality is a prerequi-

* Corresponding author

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site in understanding his concept of cultural evolution that in turn is linked to two different concepts of morality. Some scholars treated cultural and biological evolution in much the same way; we instead argue that only in following Hayek's cognitive ideas one can fully understand his process of cultural evolution as a whole.

Hayek's concept of morality strongly relates to his subjectivism which goes back to his thoughts described in The Sensory Order (1952) We try to offer an answer as to why current interpretations of his theory that do not follow his cognitive writings cannot gain further insights. Briefly stated, most of the unnecessary critique of Hayek's work is based on a misunderstanding of his thoughts on individual perception.

This viewpoint is also related to sociobiological and anthropological perspec- tives. As pointed out in Vanberg (1994), rule-setting, rule-following and punishment are important topics in the organization of societies. Seen in such a framework, it was Hayek's achievement to point out how a gradual suppression of instincts together with the upcoming of individual selection may lead to a process of cultural selection. Such a process can only be initiated if individuals perceive rules from outside their group. Individuals as well as governments cannot know ex ante how new rules will perform in the process of group selection.

Our paper proceeds as follows: Section two describes Hayek's Theory of Mind, followed by a chapter describing his theory of cultural evolution. Section four highlights the importance for a joint treatment of both theories, and section five tries to support his theories from a current model on individual learning, followed by the conclusion.

1. Individual perception and Hayek's theory of mind

We argue that cognition theory offers a suitable starting point to an interpretation of Hayek's theory of cultural evolution. In his 1952 work The Sensory Order as well as in his essays "Rules, Perception and Intelligibility" (1967, pp. 43-65), "The Primacy of the Abstract" (1978, pp. 35-49), and "The Theory of Complex Phenomena" (1967, pp. 22-42), Hayek explains individual perception as well as individual action as a purely individual phenomenon.

The starting point to Hayek's cognitive theory is the relationship between stimulus and response on an individual plane. Hayek thoroughly reflects on a simple stimulus-response mechanism and links processes that occur on a neural plane with philosophical reasonings. Stimuli cannot be perceived in their original and pure shape but only when connected with other stimuli. Here Hayek refers to a group of stimuli as a whole. Groups of stimuli proceed through a classification and catego- rization mechanism that creates "molds" in the human mind.

After the group of stimuli has passed such a classification process, the human mind by having these patterns present is able to perceive stimuli that belong to the set in question. One may find parallels to Kant's concept of ca tegor ies . It is important to note that while the categories of mind in Kant's theory are unchangeable and permanent, Hayek's concept allows for the attribution of a semi-permanent nature to

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these patterns. This quality is due to their dual nature: Both categories are genetically transmitted and thus reflect the Kantian viewpoint. They are however highly influenced by individual experience as well, and hence can be changed - a fact that marks the starting point of Hayek's subjectivism.

In other words, categories or pattems lead to the perception of data from outside the mind. Since these patterns are individually unique - inherited and formed by experience - every individual has his own framework with which he is able to perceive the world. In Hayek's (1952) own description, the mind itself is such a framework that organizes the perceptions it receives from the outside world. However, perceiving is not a passive act but entails an act of interpretation l: "the placing of something into one or several classes of objects" (1952, p. 142). Individual perception, furthermore, is necessarily reduced to parts of any physical event 2. Experience plays a crucial role in bundling the results of a group of stimuli. What we perceive is what we already have compared with other classes of events on a neural plane. In other words, mind is a framework attributing classifications to groups of stimuli.

In explaining why an individual uses certain categories and not others, and is likely to respond to stimuli in a certain way, Hayek introduces the concept of dispositions. Dispositions according to Hayek are "It]he most convenient starting point ... which make an organism inclined to respond to stimuli of a certain class, not by a particular response, but by a response of a certain kind" (Hayek, 1978, p. 40). Dispositions have formed categories and they share some similarities. Dispositions are genetically inherited and are the result of the society's experiences which the individual in question lives. Dispositions may be regarded as the result of the socialization process in a broader sense, encompassing both education and living conditions; however, they are the result of individual experiences as well. Similar to categories that do not follow a single stimulus,, dispositions do not refer to a single human action but to a group of actions. A disposition that primarily accounts for a certain kind of behavior is called a general rule of action. It is usually superimposed by other dispositions (see Figure 1, at the next page).

External stimuli pass through a process of classification. The individual therefore can only rely on a so-called abstract perception, which is contingent upon different dispositions of action. A primary disposition that enables the individual to take deci- sions - or governs its behavior - is called a general pattern of action. The addition- al existing dispositions refer to the current situation of the individual and evoke the individual's response. �9 '

It is important for our purposes to highlight the abstract quality of primary dispositions. These, rather, predispose an action in a general sense. Moral rules are an example Of these abstract rules and patterns of behavior:

I See Rizzello (1999, p. 25). 2 Hayek (1952, p. 142)~ "If sensory perception must be regarded as an act of classification, what we perceive can never be unique properties of individual objects but always only properties which the objects have in common with other objects."

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Fig. 1: Hayek's two types of dispositions.

As the organism plays with a great many action patterns of which some are confirmed and retained as conducive to the preservation of the species, corresponding structures of the nervous system producing appropriate dispositions will first appear experimentally and then either be retained or abandoned. (Hayek, 1978, p. 43)

A new rule or disposition to act cannot change the mind of the individual as a whole. Hence, knowledge is necessarily closely related to individual perceptions and interpretations of how to act. This reasoning forms the central point of Hayek's subjectivist theory of learning: Our knowledge is memorized in our rules of perception and our rules of conduct. In other words, knowledge will always have a subjectivist quality since all information that reaches the mind still, depends on individual categories and individual dispositions. Hayek's definition of knowledge repeat- edly refers to knowledge about the environment in which the individual lives. In the end, what we call knowledge is nothing else than what we have stored in our patterns of action 3.

3 Hayek (1978, p. 41).

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Hayek distinguishes three types of rules that are followed by the individual:

(1) rules that are merely observed in fact but have never been stated in words; if we speak of the 'sense of justice' or the 'feeling for language' we refer to such rules which we are able to apply, but do not know explicitly; (2) rules that, though they have been stated in words, still merely express approximately what has long before been generally observed in action; and (3) rules that have been deliberately introduced and therefore necessarily exist as words set out in sentences. (Hayek, 1978, p. 8.)

The first two types of rules are abstract. There is no method by which to define them in terms of concrete goals. Especially the first type of rules refers to implicit and tacit knowledge since it covers the potential to act in congruence with the environment. In many cases, individuals do not consciously follow these rules since they are embedded in traditions, which means they are complex phenomena of patterns and rules of behavior and perception.

This leads to an interesting point: Dispositions and categories at their core are genetically transmitted and cannot simply be changed. They are the result of individual learning through a socialization process. Finally, dispositions and categories are also influenced by individual experience.

This very point constitutes Hayek's concept of "immanent criticism". (1988, p. 69) that leads the individual to solve the inconsistency between general patterns of action and the requirements that are predisposed by his environment. Insofar as the individual is able to deviate in his actions, deviation is necessarily limited to what he perceives. The individual obviously needs to perceive negative feedback between an existing rule of action and its unsatisfactory outcome. Therefore, entirely new rules cannot be perceived at all.

Nevertheless, the individual may add his own experiences to build on his dispositions. This leads to two lines of thought: First, the individual learns on his own, and second, he is embedded in the tradition of the society in which he lives. This limits his choices in changing his behavior completely and simultaneously this offers the members of his society a chance to learn from his behavior. Quite simply, progress and tradition are interlinked.

2. Hayek's theory of cultural evolution

Hayek's theory of morality leads directly to his theory of cultural evolution. It plays a major role since the development of moral behavior in societies is a part of societal evolution. On a societal plane, groups have their own traditions in accordance with the dispositions of their members. Group members have similar knowledge about their environment; they share similar needs and expectations about the behavior of their group members. In this way they show a regularity of action that brings about an order. This order, according to Hayek, is spontaneous

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in that it follows a combination of rules of actions in society, and has emerged unintentionally.

Hayek distinguishes the "small" from the "large" society, and refers both to historic and to current processes of development. Both methods of observation allow for two different kinds or morality: the morality of the small group and the morality of the large society, respectively (Figure 2).

Fig. 2: Linking cognitive theory and cultural evolution.

It should be remembered that stimuli lead to certain dispositions and actions. These patterns eventually produce a societal order.

Hayek's theory of cultural evolution starts with the concept of a "face-to-face society" in which the genetic fixation of instincts is prevalent; this in turns deter- mines the development of mind. Small groups with 10-15 members, usually groups of relatives, such as gatherers and hunters, emerge together with strong linkages among one another. Instincts play the decisive role in ensuring the best available adaptation to the prevailing environment. Instincts are the best response to the stimuli that reach the individual. Instincts are Hayek's moral rules of small groups or his natural morality 4. They help to control and to ensure cooperation among group members. This form of cooperation has been established by trust; the behavior

4 See Hayek (1979, pp. 153-176) and Hayek (1988, p. 12).

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among the members is ensured by altruism, solidarity, sympathy and group deci- sions. Seen from a historic perspective, members during this age shared the same perception of the environment, of aims, risks and threats since they have developed similar dispositions.

The crucial step forward occurred during a stage in which trade became a common pattern of action. By historic coincidence societies changed simultaneously with their environment. The possibility to trade with non-members of the own group led to the division of labor and specialization and thus to the division of knowledge. Trade cannot be based on collective knowledge but needs the estab- lishment of conditions that permitted these activities to flourish. Without a doubt there was a need for a new mechanism. Private property rights emerged as a sub- stitution for common ownership. As Hayek 5 points out, private property is the fun- damental principle of cultural evolution. These new phenomena made it possible for the group to grow richer and faster, but one of the consequences of this process was the separation of goals for different members. Knowledge that varied from person to person led to a different perception and to an individually different cognitive framework.

At this point the group and its behavior changed and a new social order arose. The gradual replacement of innate responses by new rules, perceived and learned from outside the group, accounted to a large extent for human evolution. The instincts themselves did not lead to a beneficial life any longer, but instead it was their gradual suppression together with their replacement by new rules of conduct that brought about a new order.

At this point Hayek's approach of overlapping dispositions comes into action. Human behavior in small groups generally showed a high degree of similarity because of the similar perception of the environment and could be controlled easily by other group members. The character of rules now changed. Different dispositions overlapped with new rules. Regulations often left certain areas open for individual action while prohibiting other activities completely - a fact that permitted individuals to share their knowledge. These new sets of rules Hayek calls the morality of the large group or of the open society. They include frugality, fairness, property rights, trade and competition. Over time, these rules have become increasingly established inside societal tradition and transmitted through the cultural process of socialization. Rules of morality form a part of culture and are constantly changed. In addition to tradition, reason also plays a role in determining current societal evolution. However, its impact is a limited one since reason is a "thin layer of rules, deliberately adopted or modified to serve known purposes" (Hayek, 1979, p. 160). The rules of morality as a whole cannot be understood as long as tradition operates on a different plane other than reason. But individual action by finding out inconsisten- cies in certain rules, eventually alters these rules and, according to Hayek, con- tributes to the development of society.

s See Hayek (1988, ch. 2 and 3)

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3. The importance of rule-perceiving for an understanding of individual and group selection processes

The cognitive approach described above highlights the individual contribution of rule perceiving and, consequently, of changing individual action according t 9 the prevalent dispositions. We argue that this viewpoint is the key to an understanding of Hayek's process of cultural evolution. First, it implies that any rule-setting following the Kantian concept of dispositions can hardly apply to what Hayek describes. Human mind in its structure reduces the possibility of an ex ante setting of rules. This point has been largely neglected by Public Choice theorists. While Kaisla (1997, p. 41) argues according to Vanberg (1993, p. 176) that "[we] tend to form categories of situations which we in some sense perceive as similar" (our italics), Hayek's focus is clearly different: Individuals do not have categories of situations but categories of stimuli. The difference is obvious: two identical situations do not lead to new stimuli, only to a deviation. Whether individuals perceive alterna- tive rules highly depends on whether they may perceive them in relation to their old rules. Learning processes within societies thus cannot be circumvented by a central authority that changes the rules for the whole society. No individual would do so at large since he lacks the necessary knowledge. This does not exclude rule-setting completely; as shown above, Hayek argues that reason may account for some dispositions. Groups may also consciously change parts of their system; however, any deliberate rule-setting by an authority remains subject to the above mentioned process of individual and group selection.

In our view, this Hayekian viewpoint is still largely misunderstood. Public Choice theory and Constitutional Economics starts from an assumption that takes the outcome of the highly subjectivist processes described by Hayek as a given and embed his thought in a framework of deliberate rule-setting. Vanberg (1994, p. 79), in referring to Hayek (1967, p. 72) interprets the notion of appropriate rules - notably as an outcome of a purely subjectivist process that works on the individual plane - as a justification for an ex ante rule-setting by the government. The fallacy lies in the circumvention of group selection processes - and partly of processes of individual selection. These processes in the end will show which kind of morality - as a set of rules - may foster the group's survival and growth. Hence, rule-setting, understood in this way omits the subjectivist character of knowledge as well as the selection processes working on two different planes.

The important contribution of Hayek, as already sketched in historical perspective, is that his individual predisposition to perceive rules from outside the group allows for a process of individual selection as well as group selection. Individual selection refers to the perception of rules that are slightly different from already existing ones and hence leads to the creation of new rules. In turn, group selection occurs in a process in which the set of new rules may lead to more beneficial outcomes for the group as a whole - and thus enhancing the group's fitness - compared to the situation before the individual selection took place. The key criterion in the process of individual selection is individual fitness, in the case of group selection it is the fitness and thus the growth and survival of the group. Vanberg, by referring to

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the notion of appropriate rules omits the necessity of creating a variety of outcomes within the process of individual selection. Langlois and Sabooglu (2001) in our view were first in understanding the difference: "[I]f Hayek were precise about which rules of conduct can bring about a spontaneous order, it would mean that reason could reconstruct such rules and that we could teach them to future generations".

Individual selection is subject to the degree to which an individual may deviate from rules, which in turn depends largely on his reputation:

Though present morals evolved by selection, this evolution was not made possible by a license to experiment but on the contrary by strict restraints which made changes of the whole system impossible and granted tolerance to the breaker of accepted rules, who may have turned out a pioneer, only when he did so at his own risk and had had earned such license by his strict observation of most rules which alone could gain him the esteem which legitimized experimentation in a particular direction. (Hayek, 1979, p. 204; fn. 48)

Individual selection, seen in Hayek's cognitive framework, is a process that operates on a subjectivist plane. The perception of rules brings about individual decision to act according to a certain rule. The decision, again, is the answer to an individual process of trial and error; it is a process in which the individual responds to an outside stimulus and the dispositions that reflect group behavior. Individuals that are successful will provoke imitation by other individuals. The more individuals follow this process of problem solving, the faster these rules become a part of the group's dispositions: a new tradition has emerged. This kind of imitation follows individu- alist principles and is called 'within-group-imitation' (Vromen 1995). Likewise, moral rules may also be accepted directly from other groups. If the individual cannot change his behavior inside his group, he still may migrate to a group that either already practices the new rule in question or offers more tolerance toward deviators. This process according to Vromen (1995) is called 'between-group-migration'.

4. Mapping mind and local interaction structure: Does Hayek's theory offer a suitable explanation for cultural learning?

As argued above, Hayek's cognitive theory is the key to an understanding of his process of cultural evolution. To back his arguments from a game-theoretical perspective that involves cultural learning, we need to answer the question whether Hayek, in offering a contribution to cultural evolution, succeeds in explaining the emergence of altruism. Seen in a game-theoretical perspective, Hayek's contribution on one hand needs to ensure cooperation (in that the rules adopted lead to beneficial outcomes when adopted in the group), and not only to solve coordination problems (as it may be the case when we limit ourselves to rule-perception and not rule-following). Primarily Hayek refers only to altruism together with the notion of moral-

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ity of the small group. We explicitly argue that in order to reach a new understanding and valuation of Hayek 's oevre as a whole there is a need to find out how his reasonings are in congruence with well-defined assumptions that apply in game-the- oretic settings. Our reasoning is simple: If Hayek 's predispositions of human mind are consistent with the assumptions that apply in a standard model of cultural learning, Hayek 's theory may reach further impact as a tool to explain cognitive and societal processes in a process cultural evolution.

In our view, Eshel et al. 's (1999) model can be regarded as one that matches Hayek 's thoughts very closely 6. Their concept to model cultural learning in a conservative learning process in which the players change their strategy by imitating their neighbors represents the Hayekian viewpoint to a large extent. Individual learning by imitating members of the own as well as of other groups represents cultural inheritance. Cultural learning in Hayek 's view is largely defined by tradition and can be found in those parts of our dispositions that are formed by group experience. Cultural learning in a historic perspective can be found in the transition from primitive to modem societies, enabled by the gradual suppression of instincts. It did not occur by genetic transmission but by imitational learning. As Vromen (1995, p.170, italics in original) points out:

Hayek concentrates on the rules that the individuals in a group.have in common. His emphasis is on custom and shared tradition. This raises the question as to how rules of custom and of shared tradition come about; that is, how do the individuals in a group come to adhere to the same rules? According to Hayek, this is primarily due to imitation.

Eshel et al. (1999) depart from biological models o f kin selection in which each individual dies at random and is replaced by descendants of one of its group members. In the context of cultural evolution, individuals may even be unaware to be involved in a game. They choose their behavior according to the cultural influence of their neighbors. This cultural influence is determined by their imitational learning behavior. Learning is conservative in that an individual has no incentive to learn as long as he does not receive a stimulus from his neighborhood. An individual will start to search for new strategies 0nly if at least one of his direct neighbors plays a different strategy.

6 We deliberately do not follow the extended discussions along the "history of thought" line of research that follow the shift from merely biological learning to clearly cultural elements of transmission. This discussion has led too often to a unnecessary critique of helpful, though limitedly, usable, approaches in that it simply regarded those theories as subject to "group selection fallacy". In order to avoid any misunderstanding we emphasize here that Eshel et al. (1999), despite mentioning kin selection and using this term in their model, do not follow any biological kin selection theory at all. It is their merit to have developed a model of cultural learning that follows closely Hayek's cognitive arguments of individual learning behavior. Moreover the overwhelming body of the most recent literature - see e.g. Boyd and Richerson (1985), Rubin (forthcoming), Sober and Wilson (1998), Gifford (2000) and Searle (1995), but also Vromen (1995) and Binmore (1998) - suggests that models of sociobiolo- gy may lead to a better understanding of processes of cultural evolution and the work of F.A. Hayek.

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I~ learning I~ neighborhood

0 �9 0 0 0 ~ ~ �9 ~ �9

IA interaction ~ . ~ I ~ neighborhood

Fig. 3: Learning and interaction in a small group (following Eshel et al., 1999).

This implies that individuals do not learn inside a their interaction group. Moreover, since the learning neighborhood coincides with the interaction neighborhood, strategies cannot change. Only players located at the border between two strategies may revise their strategies. This conservative learning behavior, a concept that follows Hayek's reasoning, is crucial. If this assumption is relaxed and individuals may change their strategies too quickly, this behavior may result in instability and lead to a panmictic model.

Learning is closely related to a gradual shift in individual strategy and consequently to a shift of group borders. The rate of transition between two interacting groups (regions) in which two strategies _x and ~ are played is denoted by the momentaneous transition rate P~-,_x and Px_-v, respectively. Pv-,_x > Px-zd follows the properties of a continuous time random walk: an x player will change to strategy 2~ and this process will continue until all 2~ players eventually will shift to play 2~ (Eshel et al. 1999, pp. 451-2). It is important to note that every individual may, though not initially, play a mixed strategy, consisting of both x and 2~ in a certain proportion. It depends on his dispositions, or - in terms of local interaction - on his location and thus his ability to learn from individuals outside his interaction group. The individual itself, since his fitness depends on the success of his strategy, needs to "strike a balance" between cooperation with identical strategies and beating other strategies when playing with group members and non-group members. Learning by imitation eventually leads to the adoption of a new strategy, the individual now plays additionally a new strategy in that he plays a mixed strategy. His old strategy is still played but might be reduced subsequently if the new one proves to lead to a higher payoff. Whenever the (mixed) strategy he plays proves to be more successful when played against other individuals in the interaction group, the individual under consideration will adopt the new strategy gradually. This model of local interaction permits Eshel et al. (1999) to explain the emergence of cooperation in societies. 7

7 One could, e.g. assume that all group members play the cooperative strategy in a Hawk-Dove game and - depending on the payoff structure - reach a pareto-efficient Nash equilibrium. Within-group cooperation is ensured, In a simpler setting, Myerson et al. (1991) have trivially shown that local interaction ensures cooperation in PD games.

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The search process itself is determined by the individual's perception of new strategies, which in Eshel et al. (1999) is described by local interaction. The individual located at the border between two strategies plays a cooperation game. Eshel et al. (1999) use an equilibrium concept adopted from the concept of evolutionary sta- ble strategies (ESS) to local interactions. Eshel et al. define an unbeatable strategy as one to which a dynamic process of strategy changes converges; a progress starting from a state in which all but a finite number of individuals plays this strategy:

A strategy 2~, e.g., is unbeatable if and only if in the game (fL k, n) for all strategies x a: 2~ : 2~--- x (and thus Px_-,~ > P~--,_x) holds. The variables k and n denote the radii of the interaction and the learning neighborhood, respectively.

We restrict our discussion now to the interesting case in which the learning neighborhood is larger than the interaction neighborhood one. Such a setting typi- cally exists in a transition stage from e.g. primitive societies to open ones as it his- torically occurred when trade became an important issue. This describes the Hayekian transition in which individuals perceive rules from outside the group and gradually adopt them under certain conditions. Learning processes may lead to a change of their behavior in that they adopt new strategies (Figure 4):

I ~ learning ~ I I ~ neighborhood ~1

f �9 0 0 0 e

group borders I ~ eventually ~ I r I may shift

@ @ @ @

interaction neighborhood ~

@ �9 Q �9

Fig. 3: Learning and interaction in the open society (following Eshel et at., 1999).

The individual's long-term performance payoff eventually decides whether a strategy is superior the a former strategy played by the individual. If a player located at the border of one group observes that other players increase their fitness by playing a different strategy, he finds out the superiority of this new rule that is played in the adjacent group. He is likely to adopt it.

Eshel et al. (1999) show that, for sufficiently large n, k with n/k = O, the conditions for unbeatability are very simple:

O / f 0< 1

(1) r ( 0 ) = [ l - b i f O > l

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If r is sufficiently high, the cooperation strategy is unbeatable in {~, r} if and only if it is unbeatable in {fir, 0}, where f~r in a standard Hawk-Dove situation of the following type denotes:

C

D

a (l+r) b + rc

c + rb d (1 +r)

C D

Since a strategy C is unbeatable in {f~r, 0} if for any strategy 2~ = (Y~, Y2) with Y2 = 0, one can transform the following inequality as follows:

a(1 + r) + a(l + r ) y m + (b + r c ) y 2 > (or (2L, 2s + a(l + r ) y I + (c + r b ) y 2 (2)

tot (2~, 20 is the proportion of 2~ players with whom the 2~ players in the group inter- act 8. The above inequality determining the condition for unbeatability can be rewrit- ten as follows:

(1 + r) [(2a - b - c)Ym + a - d)y2] > (1 - r ) ( c + b) . (3)

This hold for all types of Hawk-Dove games, including the PD case. Since a-d is always positive and 2a - b - c > 0, as long as r is sufficiently close to 1, this leads to cooperation.

5. Conclusion

Hayek's Theory of Mind has linked human action to processes of cognition. This framework predetermines individual behavior in societies, contingent upon individual dispositions. Seen in this way, Hayek's Theory of Mind is a prerequisite for an understanding of his theory of cultural evolution, which works on two different lev- els. In a theoretical and historical sense, we have argued that cultural selection processes depend on individual rule perception and individual action following individual dispositions. Cultural evolution therefore builds on learning processes. Hayek's description of these processes may be regarded as the cognitive interpretation of a model of local interaction, as our interpretation of Eshel e t al. (1999) suggests. In their model, ctiltural learning occurs when interaction and learning neigh- borhoods differ. Such a setting enables individual learning in the Hayekian sense: Individuals may change their strategies subject to their perception. The change of the morality in a society in the course of cultural evolution is thus explained as a result of individual action and individual perception.

s Eshel et al. (1999, p. 460)

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Acknowledgements

We gratefully acknowledge helpful comments on earlier drafts presented at the Public Choice Annual Meeting 2000,coming from Richard Wagner, Yong Yoon, Roger Congleton and Anton Lowenberg, as well as from participants at the Freiburger Hayek Tage 2001 and two anonymous referees. All remain- ing errors are ours.

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F.A. Hayek’s theory of mind and theory of cultural ...egick/mind_and_society_2001.pdfMind & Society, 3, 2001, Vol. 2, pp. 149-162 9 2001, Rosenberg & Sellier, Fondazione Rosselli