A new approach to age and risk taking behavior of agents
Please cite this item using this persistent URL
http://hdl.handle.net/11693/15702Collections
Advisor
Karagözoğlu, Emin
Publisher
Bilkent University
Abstract
In this thesis, we use evolutionary game theory techniques to analyze the relation
between risk taking behavior of agents and their ages. We suppose that
risk aversion is the stable pattern for the old agents and risk seeking is the
stable pattern for the young agents as it is commonly assumed so in economics
literature. First, we solve a benchmark model without heterogeneity in terms of
age di§erentiations. In such a case, we observe that mutation either increases or
decreases with respect to the payo§ levels, depending on the initial Ötness levels
of the population groups. In the second step, we introduce heterogeneous population
frontier. The anticipated level of the initial mutant proportion provides
incentives to triger the evolution. Then, we analyze numerically the e§ects of
the initial level of Ötness, initial risk averse and risk seeking proportions on the
pattern of the evolution process. Finally, we studied the intertemporal e§ects
of di§erent risk averse and risk seeking population proportions on mutation.