  An evolving population, in which individual members (`agents') adapt their
behaviour according to past experience, is of central importance to many
disciplines. Because of their limited knowledge and capabilities, agents are
forced to make decisions based on inductive, rather than deductive, thinking.
We show that a population of competing agents with similar capabilities and
knowledge will tend to self-segregate into opposing groups characterized by
extreme behavior. Cautious agents perform poorly and tend to become rare.
