On the Evolutionary Origin of Prospect Theory Preferences

2008/03/27 by Rose McDermott, James H. Fowler, Oleg Smirnov · 79 citations
Decision Sciences · Economics, Econometrics and Finance · Social Sciences · #Behavioral economics #Context (archaeology) #Decision-Making and Behavioral Economics #Economic and Environmental Valuation #Economics #Expected utility hypothesis #Experimental Behavioral Economics Studies #Foraging #Function (biology) #Mathematical economics #Microeconomics #Optimal foraging theory #Positive economics #Prospect theory #Risk aversion (psychology)

paper · doi:10.1017/s0022381608080341

published in The Journal of Politics 70(2), 335-350 (University of Chicago Press)

openalex publication_date 2008/03/27 · openalex created_date 2025/10/10 · openalex updated_date 2026/06/11

Abstract

Prospect theory scholars have identified important human decision-making biases, but they have been conspicuously silent on the question of the origin of these biases. Here we create a model that shows preferences consistent with prospect theory may have an origin in evolutionary psychology. Specifically, we derive a model from risk-sensitive optimal foraging theory to generate an explanation for the origin and function of context-dependent risk aversion and risk-seeking behavior. Although this model suggests that human cognitive architecture evolved to solve particular adaptive problems related to finding sufficient food resources to survive, we argue that this same architecture persists and is utilized in other survival-related decisions that are critical to understanding political outcomes. In particular, we identify important departures from standard results when we incorporate prospect theory into theories of spatial voting and legislator behavior, international bargaining and conflict, and economic development and reform.

Citations

• Rationalist explanations for war
• Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving
• Natural selection and animal personality
• Prospect Theory: An Analysis of Decision under Risk

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• Ecological expected utility and the mythical neural code. [europepmc]
• Foraging under conditions of short-term exploitative competition: the case of stock traders. [europepmc]
• Adaptive intertemporal preferences in foraging-style environments. [europepmc]
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• The influence of ergodicity on risk affinity of timed and non-timed respondents. [europepmc]
• Noninvasive stimulation of the ventromedial prefrontal cortex modulates rationality of human decision-making. [europepmc]

Related

• Prospect Theory and Political Decision Making
• Thirty Years of Prospect Theory in Economics: A Review and Assessment
• Prospect Theory: An Analysis of Decision under Risk
• Fitness-Maximizers Employ Pessimistic Probability Weighting for Decisions Under Risk
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