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Adaptive preferences: An evolutionary model of non-expected utility and ambiguity aversion
We enrich an evolutionary model with common and idiosyncratic uncertainty as in Robson (1996) by allowing for hidden actions (or phenotypic flexibility). In contexts where common uncertainty is ambiguous and idiosyncratic uncertainty is risky, the model generates both ambiguity aversion and non-expected-utility preferences for risk, thereby providing a link between the two types of behavior. While the general evolutionarily optimal objective function does not have an obvious similarity to functional forms studied in the literature, our main results show that it can be recast as a combination of familiar models of ambiguity aversion and non-expected utility. We show that particular classes of hidden actions generate the special cases of rank-dependent or divergence risk preferences embedded within a model of ambiguity aversion.
Duke Scholars
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Related Subject Headings
- Economic Theory
- 3803 Economic theory
- 3801 Applied economics
- 1499 Other Economics
- 1401 Economic Theory
Citation
![Journal cover image](https://secure.syndetics.com/index.aspx?isbn=/lc.gif&issn=1095-7235&client=dukeuniv)
Published In
DOI
EISSN
ISSN
Publication Date
Volume
Related Subject Headings
- Economic Theory
- 3803 Economic theory
- 3801 Applied economics
- 1499 Other Economics
- 1401 Economic Theory