Costly Predation and the Distribution of Competence

Abstract

An evolutionary game model shows how an equilibrium distribution of competence may evolve when members of a population prey on one another, but when predatory competence is costly to acquire. Under one interpretation, the competence distribution is an endogenously determined distribution of bounded rationality. An example shows how “tricksters” and “suckers” might coexist in the long run. The analysis leads to a curious result about a mixed equilibrium for a symmetric, zero-sum game. An increase in the costs of one or more competence levels has exactly zero effect on the fraction of the population at those levels. (JEL C79, D89)