Evolution and Market Complexity

Many complexities in our world come about through the use of preexisting purposeful information. This information may be structured in various ways (e.g., instructions, recipes, algorithms, rules, rules of thumb, business plans, and expert knowledge) and, if followed, directs the formation of something which otherwise would not have existed. This chapter argues that information organized in this way must ultimately arise as the output of an evolutionary computation. Because of this, an evolutionary process underlies most everything that characterizes human existence. This principle includes economics and markets. This chapter addresses whether or not understanding the fundamental role of evolutionary computation for enabling human and biological complexity provides useful insight into market behaviors and introduces the basic concepts necessary to have this discussion.