Risk and evolution
UNSPECIFIED (1999) Risk and evolution. ECONOMIC THEORY, 13 (2). pp. 329-343. ISSN 0938-2259Full text not available from this repository.
I examine a Knightian (1921) model of risk using a general equilibrium model of investment and trade. A population of agents with various preference types can choose between a safe production technology and a risky production technology. In addition, the distribution of types of agents changes through a standard evolutionary dynamic. For a given population distribution, the equilibrium is in general inefficient, however, by allowing the population distribution to change in response to market generated rewards, the population will converge to one where the equilibrium is efficient and where the population as a whole behaves as if all agents were risk neutral.
|Item Type:||Journal Article|
|Subjects:||H Social Sciences > HC Economic History and Conditions|
|Journal or Publication Title:||ECONOMIC THEORY|
|Number of Pages:||15|
|Page Range:||pp. 329-343|
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