Evolutionary justifications for non-Bayesian beliefs

C-Tier
Journal: Economics Letters
Year: 2013
Volume: 121
Issue: 2
Pages: 198-201

Score contribution per author:

1.005 = (α=2.01 / 1 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This paper suggests that the evolutionarily optimal belief of an agent’s intrinsic reproductive ability is systematically different from the posterior belief obtained by the perfect Bayesian updating. In particular, the optimal belief depends on how risk-averse the agent is. Although the perfect Bayesian updating remains evolutionarily optimal for a risk-neutral agent, it is not for any other. Specifically, the belief is always positively biased for a risk-averse agent, and the more risk-averse an agent is, the more positively biased the optimally updated belief is. Such biased beliefs align with experimental findings and also offer an alternative explanation to the empirical puzzle that people across the population appear overconfident by consistently overestimating their personal hereditary traits.

Technical Details

RePEc Handle
repec:eee:ecolet:v:121:y:2013:i:2:p:198-201
Journal Field
General
Author Count
1
Added to Database
2026-01-29