The Origin of Behavior
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Lo_Origins of behavior.pdf
Size
553.96 KB
Format
Adobe PDF
Checksum (MD5)
c75f2d1e453e8d0447e827df220b53bd
Author(s)
Brennan, Thomas J.
Lo, Andrew W.
Date Issued
March 2011
Journal
Quarterly Journal of Finance
Publisher
World Scientific
Citation
Brennan, Thomas J., and Andrew W. Lo. “The Origin of Behavior.” Quarterly Journal of Finance 01.01 (2011): 55–108.
Version
Author's final manuscript
Abstract
We propose a single evolutionary explanation for the origin of several behaviors that have been observed in organisms ranging from ants to human subjects, including risk-sensitive foraging, risk aversion, loss aversion, probability matching, randomization, and diversification. Given an initial population of individuals, each assigned a purely arbitrary behavior with respect to a binary choice problem, and assuming that offspring behave identically to their parents, only those behaviors linked to reproductive success will survive, and less reproductively successful behaviors will disappear at exponential rates. When the uncertainty in reproductive success is systematic, natural selection yields behaviors that may be individually sub-optimal but are optimal from the population perspective; when reproductive uncertainty is idiosyncratic, the individual and population perspectives coincide. This framework generates a surprisingly rich set of behaviors, and the simplicity and generality of our model suggest that these derived behaviors are primitive and nearly universal within and across species.
MIT Department
Sloan School of Management
Terms of Use
Creative Commons Attribution-Noncommercial-Share Alike 3.0
Persistent DSpace Link
DOI of Published Version
https://doi.org/10.1142/S201013921100002X
