Discusses biological markets, in which there is mutual search for partners, in cooperation and mutualism.
From the abstract:
We present a formal model in which the influence of the market mechanism on selection is made explicit. We restrict ourselves to biological markets in which: (1) Individuals do not compete over access to partners in an agonistic manner, but rather by outcompeting each other in those aspects that are preferred by the choosing party, (2) The commodity the partner has to offer cannot be obtained by the use of force, but re- quires the consent of the partner. These two restrictions ensure a dominant role for partner choice in the formation of partnerships. In a biological market model the decision to cooperate is based on the comparison be- tween the offers of several potential partners, rather than on the behaviour of a single potential partner, as is implicitly assumed in currently accepted models of cooperation. In our example the members of one class A offer a commodity of fixed value in exchange for a commodity of variable value supplied by the other class, B. We show that when the B-class outnumbers the A-class sufficiently and the cost for the A-class to sample the offers of the B-class are low, the choosiness of the A-class will lead to selection for the supply of high value commodities by the B-class. Under the same market conditions, but with a high sampling cost this may still be the evolutionarily stable outcome, but an- other pair of strategies proves to be stable too: relaxed choosiness of class A coupled with low value commodities supplied by class B.
Differences from models based on a Prisoner's Dilemma paradigm
In PD game models, the emphasis is on how an individual can prevent cheating by its partner. Here, the focus on partner selection. Cheating is left out of the model entirely.
"To our minds the cheating option can safely be ignored in the large number of cases in which either the commodity cannot be withdrawn or changed in quality or quantity once it is offered on the market, or when cheating is effectively controlled." (p. 2)
An essential feature of market models is that the expected future gains are actively influenced by playing off potential partners against each other. There must therefore be at least 3 players.
From two to three players: the tale of the 'boa constructor' and the 'shadowbirds
This is a simple example that illustrates the importance of markets. Here is a simplified version. Suppose there is a mutualism between boa constructors and shadowbirds. The boa constructor is a snake that lays her eggs in a mound in the open desert. The shadowbird lays her eggs in the boa's mound. The bird needs the snake's protection for her eggs to survive. The snake needs the shade provided by the bird's tail. The bird has two possible traits: long tails and short tails. The long tail is costlier to the bird, but provides the snake with better shade, and hence higher fitness. The bird lands on a nest, and the snake has the option to allow it or not.
Ina two-player game, the snake needs the bird, so must accept the short tail, even though she prefers the long tail. The short tail is an ESS for the bird. However, now consider a 3-player game, in which two birds compete for one nest. If the two birds are the same, the boa flips a coin and chooses one at random. However, if one of the birds has a long tail, the snake chooses that bird. Thus, long tails are the ESS in this scenario.
Market games
They analyze market games in which there are two classes of traders. Class A produces a fixed good at a fixed cost. Class B can produce either low or high cost goods, which are usually of low or high quality, respectively (but with some variation). They then analyze scenarios where members of class A have low sampling costs when choosing among members of class B, or high sampling costs.
Low sampling costs
In this model traders of class A can choose between high and low values without paying a price for comparing a few offers. There are two different evolu- tionarily stable strategy (ESS) combinations with some range of overlap. In the first combination, ESS(1), B-traders produce with low effort and A-traders accept the highest value available in their trade group. In the second strategy combination, ESS(2), B-traders produce with high effort and A-traders accept high value only. Outside the range of overlap between ESS combinations the market's supply and demand structure fully determines the nature of an evolutionarily stable deal. Within this range the two ESS combinations represent alternative solutions.
High sampling costs
In this case, during one round of the game an A-trader meets only a single B-trader. If the A- trader rejects the possible deal, he has to pay a substantial price, the search or sample cost s, in order to participate in the next round of the remaining game. In this case, the ESS(1) combination 'accept any quality - low production effort' is very robust with regard to variation in the trade class ratio. In this sense, the principle of supply and demand fails to operate as an effective evolutionary market force. However, there is an alternative ESS combination, equivalent to combination (2) described above, which can occur when members of class B are much more abundant than members of class A, effectively giving members of class A some choice.
Both scenarios involve a version of the following for the chooser: settle for low quality when options are few, hold out for quality when there are options (Figure).
Empirical examples
The authors then go over many empirical examples from the behavioral ecology literature (mainly insects), and discuss the relevance of the market models. They specifically discuss 3 types of markets: (1) mating markets, (2) cooperation markets, and (3) mutualistic markets. The latter 2 are the most interesting.
Cooperation markets
The lay out the "inferior competitor hypothesis." Assume there are 2 classes of individuals: dominants (the choosers) and subordinates. Dominants would look for honest signals of subordination/inferiority, which would constrain the bearer to keep his role. Examples include (1) observable physical weakness, (2) badges of subordinance, (3) characteristics undesirable to the opposite sex, (3) signs of reduced fertility.
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