Selection matters

Paolo Pin

No 138, Working Papers from Department of Applied Mathematics, Università Ca' Foscari Venezia

Abstract: To test for the adaptive optimization of risk attitudes, we use a simple model of preferences among lotteries, where agents evolve with a Genetic Algorithm. We find that the genetic selection operator are fundamental in determining the outcomes of the simulations, along with the possibility of iterate choices in a single generation and an eventual factor of heritage across generations (all innocuous technical parameters at a first sight). Different choices of these mechanisms may easily lead to opposite behaviors, from risk aversion to even risk love. The simulations give a hint on the possible implications of the different selection operators, when trying to model the evolution of risk attitudes in different social and economic settings.

Keywords: Risk preferences; genetic algorithm (search for similar items in EconPapers)
JEL-codes: C61 D81 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2006-09
New Economics Papers: this item is included in nep-cmp, nep-evo and nep-upt
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