We examine the evolutionary selection of attitudes toward aggregate risk in an age structured population. Aggregate shocks perturb the population's consumption possibilities. Consumption is converted to fertility via a technology that exhibits first increasing and then decreasing returns to scale, captured in the simplest case by a fertility threshold. We show that evolution will select preferences that exhibit arbitrarily high aversion to aggregate risks with even very small probabilities of sufficiently low outcomes. These findings complement the familiar result that evolution will select for greater aversion to aggregate than idiosyncratic risks by identifying circumstances under which the difference can be extreme.
This paper investigates the evolutionary foundation for our capacity to attribute preferences to others. This ability is intrinsic to game theory, and is a key component of “Theory of Mind,” perhaps the capstone of social cognition. We argue here that this component of theory of mind allows organisms to efficiently modify their behavior in strategic environments with a persistent element of novelty. Our notion of “Theory of Mind” ’ (ToM) yields a sharp, unambiguous advantage over less sophisticated approaches to strategic interaction because agents with ToM extrapolate to novel circumstances information about opponents’ preferences that was learned previously. We then report on experiments investigating ToM in a simpler version of the theoretical model. We find highly significant learning of opponents’ preferences, providing strong evidence for the presence of ToM as in our model in the subjects. Moreover, scores on standard measures of autism-spectrum behaviors are significant determinants of individual speeds of learning, so our notion of ToM is significantly correlated with theory of mind as in psychology.
This paper provides an evolutionary foundation for our capacity to attribute preferences to others. This ability is intrinsic to game theory, and is a key component of “Theory of Mind,” perhaps the capstone of social cognition. We argue here that this component of theory of mind allows organisms to efficiently modify their behavior in strategic environments with a persistent element of novelty. Such environments are represented here by multistage games of perfect information with randomly chosen outcomes. “Theory of Mind” then yields a sharp, unambiguous advantage over less sophisticated, behavioral approaches to strategic interaction. In related experiments, we show the subscale for social skills in standard tests for autism is a highly significant determinant of the speed of learning in such games.
Why did evolution not give us a utility function that is offspring alone? Why do we care intrinsically about other outcomes, food, for example, and what determines the intensity of such preferences? A common view is that such other outcomes enhance fitness and the intensity of our preference for a given outcome is proportional to its contribution to fitness. We argue that this view is inaccurate. Specifically, we show that in the presence of informational imperfections, the evolved preference for a given outcome is determined by the individual’s degree of ignorance regarding its significance. Our model sheds light on imitation and prepared learning, whereby some peer attitudes are more influential than others. Testable implications of the model include systematically biased choices in modern times. Most notably, we apply the model to help explain the demographic transition.
Psychologists report that people make choices on the basis of “decision utilities” that routinely overestimate the “experienced utility” consequences of these choices. This paper argues that this dichotomy between decision and experienced utilities may be the solution to an evolutionary design problem. We examine a setting in which evolution designs agents with utility functions that must mediate intertemporal choices, and in which there is an incentive to condition current utilities on the agent’s previous experience. Anticipating future utility adjustments can distort intertemporal incentives, a conflict that is attenuated by separating decision and experienced utilities.