An evolutionary explanation for risk aversion

Moshe Levy*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

15 Scopus citations


Recent models of the evolution of preferences have provided profound new insights into the origins of risk attitudes. In most of these models the evolutionary "objective function" is the maximization of the expected number of offspring, or alternatively, the maximization of the geometric-mean growth rate. We suggest that careful consideration should also be given to the objective of maximizing the probability of Having Descendants Forever, p(HDF). We show that the p(HDF) criterion implies risk aversion. Moreover, it leads to preferences that are very closely approximated by the constant relative risk aversion preferences. Thus, constant relative risk aversion can be viewed as an evolutionary-developed heuristic aimed to maximize the probability of having descendants forever.

Original languageAmerican English
Pages (from-to)51-61
Number of pages11
JournalJournal of Economic Psychology
StatePublished - 1 Feb 2015

Bibliographical note

Publisher Copyright:
© 2014 Elsevier B.V.


  • CRRA preference
  • Evolution
  • Extinction
  • Having descendants forever
  • Risk aversion


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