Risk, Rational Choice, and Evolution

Abstract

Decision-theoretic ideas arise in two areas of biology: risk-sensitive foraging, and the theory of evolution in variable environments. The former concerns the actual behavioural choices that organisms make, the latter the ‘choices’ made by natural selection. A natural suggestion is that both sorts of choices can be modelled in terms of expected utility maximization, the standard theory of rational decision in the face of risk. However, this is only true under particular model assumptions; it does not hold in situations involving a combination of aggregate and idiosyncratic risk. Mixed strategies further complicate the relation between rational and biologically optimal risk preferences. This implies a limit on the validity of the organism-as-rational-agent heuristic as a tool for understanding evolved behaviour.