The Evolutionary Stability of Optimism, Pessimism and Complete Ignorance

Burkhard Schipper

Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems from Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich

Abstract: We provide an evolutionary foundation to evidence that in some situations humans maintain optimistic or pessimistic attitudes towards uncertainty and are ignorant to relevant aspects of the environment. Players in strategic games face Knightian uncertainty about opponents’ actions and maximize individually their Choquet expected utility. Our Choquet expected utility model allows for both an optimistic or pessimistic attitude towards uncertainty as well as ignorance to strategic dependencies. An optimist (resp. pessimist) overweights good (resp. bad) outcomes. A complete ignorant never reacts to opponents’ change of actions. With qualifications we show that optimistic (resp. pessimistic) complete ignorance is evolutionary stable / yields a strategic advantage in submodular (resp. supermodular) games with aggregate externalities. Moreover, this evolutionary stable preference leads to Walrasian behavior in those classes of games.

Keywords: ambiguity; Knightian uncertainty; Choquet expected utility; neo-additive capacity; Hurwicz criterion; Maximin; Minimax; Ellsberg paradox; overconfidence; supermodularity; aggregative games; monotone comparative statics; playing the field; evolution of preferences (search for similar items in EconPapers)
JEL-codes: C72 C73 D01 D43 D81 L13 (search for similar items in EconPapers)
Date: 2005-11
New Economics Papers: this item is included in nep-evo, nep-gth and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: The evolutionary stability of optimism, pessimism, and complete ignorance (2021)
Working Paper: The Evolutionary Stability of Optimism, Pessimism, and Complete Ignorance (2019)
Working Paper: The Evolutionary Stability of Optimism, Pessimism and Complete Ignorance (2005)
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