This project is concerned with evolutionary game theory. It has two objectives: to explore the evolution of optimizing behavior and of attitudes toward risk. A basic presumption in economics is that agents optimize. This project examines this presumption by asking whether evolutionary (and other dynamic) forces will lead to the extinction of non-optimizing behavior. In particular, the authors will search for conditions under which evolutionary forces do select for optimizing behavior; and they will also explore what form of non-optimizing behavior does survive (in environments which are plausible but not sufficient to guarantee the extinction of non-optimizing behavior). More specifically, the interaction of learning and evolutionary forces in the selection of rules rather than strategies will be investigated. With regards to the evolution of attitudes towards risk it is important to know what forms of strategic interaction lead to what attitudes towards risk. For example, it is known that winner-takes-all games lead to risking-taking behavior. This will be useful for investigating, for instance, what forms of market interaction will lead to excessive risk taking behavior. This research is important because it will improve our understanding of the evolution of optimizing behavior and of attitudes toward risk.
