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An Evolutionary Perspective on Goal Seeking and Escalation of Commitment

Author

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  • Hamo, Y.
  • Heifetz, A.

Abstract

Maximizing the probability of bypassing an aspiration level, and taking increasing risks to recover previous losses are well-documented behavioral tendencies. They are compatible with individual utility functions that are S-shaped, as suggested in Prospect Theory (Kahneman and Tversky 1979). We explore evolutionary foundations for such preferences. Idiosyncratic innovative activity, while individually risky, enhances the fitness of society because it provides hedging against aggregate disasters that might occur if everybody had pursued the same course of action.

Suggested Citation

  • Hamo, Y. & Heifetz, A., 2001. "An Evolutionary Perspective on Goal Seeking and Escalation of Commitment," Papers 2001-4, Tel Aviv.
  • Handle: RePEc:fth:teavfo:2001-4
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    1. repec:eee:quaeco:v:66:y:2017:i:c:p:212-224 is not listed on IDEAS

    More about this item

    Keywords

    UTILITY FUNCTIONS ; RISK ; BEHAVIOUR;

    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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