ArticleProceedings of the National Academy of Sciences of the United States of America2021
Evolved attitudes to risk and the demand for equity.
Article in Proceedings of the National Academy of Sciences of the United States of America, 2021. The graph could read no effect estimate from its abstract, so it casts no vote on the map. Cited by 2 papers.
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The abstract states no effect estimate the extractor could read, or names no intervention and outcome on the map, so this paper lights no cell and moves no belief. It is still indexed, cited and linked below.
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Who cites it
2 citing papers in PubMed.
- Scales of risk and adaptive 'dread': an evolutionary theory of risk inflation.Scientific reports · 2025Article
- Introduction to PNAS special issue on evolutionary models of financial markets.Proceedings of the National Academy of Sciences of the United States of America · 2021Article
Corrections and comments
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Authors and funding
2 authors.
Funding
No grant is acknowledged in the PubMed record.
Abstract
The equity premium puzzle refers to the observation that people invest far less in the stock market than is implied by measures of their risk aversion in other contexts. Here, we argue that light on this puzzle can be shed by the hypothesis that human risk attitudes were at least partly shaped by our evolutionary history. In particular, a simple evolutionary model shows that natural selection will, over the long haul, favor a greater aversion to aggregate than to idiosyncratic risk. We apply this model-via both a static model of portfolio choice and a dynamic model that allows for intertemporal tradeoffs-to show that an aversion to aggregate risk that is derived from biology may help explain the equity premium puzzle. The type of investor favored in our model would indeed invest less in equities than other common observations of risk-taking behavior from outside the stock market would imply, while engaging in reasonable tradeoffs over time.
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Registered trials
Read under generation 80e0d062 · epoch 390. Bibliography from PubMed, PubMed Central and OpenAlex; grants from NIH RePORTER; trial links from ClinicalTrials.gov; estimates, votes and beliefs from the OpenQuestion graph.