Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/150157
Authors: 
Robson, Arthur J.
Samuelson, Larry
Year of Publication: 
2011
Citation: 
[Journal:] Theoretical Economics [ISSN:] 1555-7561 [Volume:] 6 [Year:] 2011 [Issue:] 3 [Pages:] 311-339
Abstract: 
Psychologists report that people make choices on the basis of "decision utilities'' that routinely overestimate the "experienced utility'' consequences of these choices. This paper argues that this dichotomy between decision and experienced utilities may be the solution to an evolutionary design problem. We examine a setting in which evolution designs agents with utility functions that must mediate intertemporal choices, and in which there is an incentive to condition current utilities on the agent's previous experience. Anticipating future utility adjustments can distort intertemporal incentives, a conflict that is attenuated by separating decision and experienced utilities.
Subjects: 
Evolution
decision utility
experienced utility
focusing illusion
JEL: 
D11
D03
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by-nc/3.0/
Document Type: 
Article

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