The Development of Risk Attitudes and their Cultural Transmission

Alejandro Pérez Velilla, Bret Beheim and Paul E. Smaldino
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Alejandro Pérez Velilla: University of California, Merced

No 9yjes, SocArXiv from Center for Open Science

Abstract: We use cultural evolutionary models to examine how individual experiences and culturally-inherited information jointly shape risk attitudes under environmental uncertainty. We find that learning processes not only generate plausible variation in risk attitudes, but also that conservative learning strategies---emphasizing the preservation of generational knowledge---excel in high-risk environments, promoting stable wealth accumulation and long-term survival but limiting asset growth as conditions improve. In contrast, exploratory learning strategies---leveraging risk-free juvenile exploration and peer influence---foster risk-tolerant attitudes that thrive in affluent, low-risk settings where wealth buffers and social safety nets reduce the costs of miscalculations. Introducing economic stratification to the model reveals how wealth disparities and inter-class interactions reinforce these patterns, exacerbating differences in learning strategies and risk-taking behaviors, and perpetuating socioeconomic inequalities through the cultural inertia of excessive risk aversion. By uniting developmental, social, and evolutionary perspectives, our framework provides a novel lens on the cultural evolution of risk attitudes and their broader societal implications.

Date: 2025-01-24
New Economics Papers: this item is included in nep-evo, nep-gro, nep-rmg and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:9yjes

DOI: 10.31219/osf.io/9yjes

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