Biology and the Arguments of Utility

38 Pages Posted: 16 Apr 2014

See all articles by Luis Rayo

Luis Rayo

University of Chicago - Booth School of Business

Arthur J. Robson

Simon Fraser University (SFU) - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: April 14, 2014

Abstract

Why did evolution not give us a utility function that is offspring alone? Why do we care intrinsically about other outcomes, food, for example, and what determines the intensity of such preferences? A common view is that such other outcomes enhance fitness and the intensity of our preference for a given outcome is proportional to its contribution to fitness. We argue that this view is inaccurate. Specifically, we show that in the presence of informational imperfections, the evolved preference for a given outcome is determined by the individual's degree of ignorance regarding its significance. Our model sheds light on imitation and prepared learning, whereby some peer attitudes are more influential than others. Testable implications of the model include systematically biased choices in modern times. Most notably, we apply the model to help explain the demographic transition.

Keywords: Utility, Biological evolution

JEL Classification: D01, D80

Suggested Citation

Rayo, Luis and Robson, Arthur J., Biology and the Arguments of Utility (April 14, 2014). Cowles Foundation Discussion Paper No. 1893R, Available at SSRN: https://ssrn.com/abstract=2424793 or http://dx.doi.org/10.2139/ssrn.2424793

Luis Rayo

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

Arthur J. Robson (Contact Author)

Simon Fraser University (SFU) - Department of Economics ( email )

8888 University Drive
Burnaby, British Columbia V5A 1S6
Canada

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