Cognitive biases shape the evolution of zero-sum norms

TL;DR

This paper develops a behavioral evolutionary model showing how cognitive biases like risk aversion and subjective payoff evaluation can lead to stable yet inefficient zero-sum norms, explaining persistent inequality and societal divergence.

Contribution

It introduces an extended evolutionary game theory framework incorporating bounded rationality and prospect theory, revealing how cognitive biases influence norm evolution and societal outcomes.

Findings

Intermediate rationality improves coordination

Excessive rationality or loss aversion causes lock-in at low payoffs

Higher inequality correlates with higher societal efficiency

Abstract

Why do maladaptive perceptions and norms, such as zero-sum interpretations of interaction, persist even when they undermine cooperation and investment? We develop a framework where bounded rationality and heterogeneous cognitive biases shape the evolutionary dynamics of norm coordination. Extending evolutionary game theory with quantal response equilibria and prospect-theoretic utility, we show that subjective evaluation of payoffs systematically alters population-level equilibrium selection, generating stable but inefficient attractors. Counterintuitively, our analysis demonstrates that the benefit of rationality and the cost of risk aversion on welfare behave in nonmonotone ways: intermediate precision enhances coordination, while excessive precision or strong loss aversion leads to persistent lock-in at low-payoff and zero-sum equilibria. These dynamics produce an endogenous equity-efficiency trade-off: parameter configurations that raise aggregate welfare also increase inequality, while more equal distributions are associated with lower efficiency. The results highlight how distorted payoff perceptions can anchor societies in divergent institutional trajectories, offering a behavioral-evolutionary explanation for persistent zero-sum norms and inequality.