Doves and hawks in economics revisited: An evolutionary quantum game theory based analysis of financial crises

The last financial and economic crisis demonstrated the dysfunctional long-term effects of aggressive behaviour in financial markets. Yet, evolutionary game theory predicts that under the condition of strategic dependence a certain degree of aggressive behaviour remains within a given population of agents. However, as a consequence of the financial crisis, it would be desirable to change the "rules of the game" in a way that prevents the occurrence of any aggressive behaviour and thereby also the danger of market crashes. The paper picks up this aspect. Through the extension of the well-known hawk-dove game by a quantum approach, we can show that dependent on entanglement, evolutionary stable strategies also can emerge, which are not predicted by the classical evolutionary game theory and where the total economic population uses a non-aggressive quantum strategy. (C) 2010 Elsevier B.V. All rights reserved.