No species engages in trade to the extent that humans do. Trade (cooperation, reciprocation) is as characteristic of humans as language and tool use. The field of economics can be thought of as the study of what happens when large numbers of people engage in trade. For research on the cognitive foundations of trade, see our entry on social exchange.
To see how evolved mechanisms can create behavior that is better than rational (in the economist’s sense), see:
Cosmides, L. & Tooby, J. (1994). Better than rational: Evolutionary psychology and the invisible hand. American Economic Review (May), 327-332.
Market economies have produced prosperity with no precedent in primate evolution. Yet people often feel alienated by trade in market economies. Is there a principled reason for this feeling of alienation? See:Tooby, J. & Cosmides, L. (1996). Friendship and the Banker’s Paradox: Other pathways to the evolution of adaptations for altruism.In W. G. Runciman, J. Maynard Smith, & R. I. M. Dunbar (Eds.), Evolution of Social Behaviour Patterns in Primates and Man. Proceedings of the British Academy, 88, 119-143. (especially starting with the section called “Crisis Management”)
Collectivism sometimes appeals to our moral intuitions, yet has had dark consequences for humanity. Markets often do not appeal to our moral intutions, but have fed, clothed, and sheltered people on a vast scale. Do we have evolved moral heuristics that no longer match the conditions in which we live? See:
Cosmides, L. & Tooby, J. (2006). Evolutionary psychology, moral heuristics, and the law In G. Gigerenzer & Christoph Engel (Eds.), Heuristics and the Law (Dahlem Workshop Report 94). Cambridge, MA: MIT Press.
For work on how evolutionary psychology can inform business ethics, see:
Cosmides, L. & Tooby, J. (2004). Knowing thyself: The evolutionary psychology of moral reasoning and moral sentiments. In R. E. Freeman and P. Werhane (Eds.), Business, Science, and Ethics. The Ruffin Series No. 4. (pp. 93-128). Charlottesville, VA: Society for Business Ethics.
Can our coalitional psychology affect modern transactions, such as mergers? See:
Cosmides, L. & Tooby, J. (May 2004). Can a clash of cultures undermine this cross-border merger? Harvard Business Review, 82(5), 40.
The psychology of collective action governs teamwork, which is a central feature of modern business organizations. To see how evolutionary psychology can inform issues in organizational behavior, see:
Price, M. E., Cosmides, L. & Tooby, J. (2002). Punitive sentiment as an anti-free rider psychological device. Evolution and Human Behavior, 23, 203-231.
Tooby, J., Cosmides, L., & Price, M. (2006). Cognitive adaptations for n-person exchange: The evolutionary roots of organizational behavior. Managerial and Decision Economics, 27, 103-129.
See the webpage of CEP alumnus Michael Price for more on the evolutionary psychology of organizational behavior.
The new field of neuroeconomics is closely related to evolutionary psychology. For more information on neuroeconomics, see:
Center for the Study of Neuroeconomics at George Mason University in Virginia