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On the biological foundation of risk preferences

Roberto Robatto and Balázs Szentes

Journal of Economic Theory, 2017, vol. 172, issue C, 410-422

Abstract: This paper considers a continuous-time biological model in which the growth rate of a population is determined by the risk attitude of its individuals. We consider choices over lotteries which determine the number of offspring and involve both idiosyncratic and aggregate risks. We distinguish between two types of aggregate risk: environmental variations and natural disasters. Environmental variations influence the death and birth rates, while natural disasters result in instantaneous drops in population size.

Keywords: Risk preferences; Evolution; Expected utility (search for similar items in EconPapers)
JEL-codes: D81 D91 (search for similar items in EconPapers)
Date: 2017
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