Evolution of Time Preferences and Attitudes Towards Risk
No 29, TWI Research Paper Series from Thurgauer Wirtschaftsinstitut, UniversitÃ¤t Konstanz
This paper explores a general model of the evolution and adaption of hedonic utility. It is shown that optimal utility will be increasing strongly in regions where choices have to be made often and decision mistakes have a severe impact on fitness. Several applications are suggested. In the context of intertemporal preferences, the model offers an evolutionary explanation for the existence of conflicting short- and long-run interests that lead to dynamic inconsistency. Concerning attitudes towards risk, an evolutionary explanation is given for S-shaped value functions that adjust to the decision-makerï¿½s environment.
Keywords: Evolution of Utility; Risk Attitudes; Time Preferences (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-evo and nep-upt
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Journal Article: Evolution of Time Preferences and Attitudes toward Risk (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:twi:respas:0029
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