Evolutionary Foundation for Heterogeneity in Risk Aversion

We examine evolutionary basis for risk aversion with respect to aggregate risk. study populations in which agents face choices between and idiosyncratic show that the maximize long-run growth rate are induced by a heterogeneous population least most averse indifferent obtaining its linear harmonic mean sure, respectively. Moreover, an approximately optimal behavior can be simple distribution according all have constant relative aversion, coefficient of is uniformly distributed zero two.