Our understanding of risk preferences can be sharpened by considering their evolutionary basis. The existing literature … has focused on two sources of risk: idiosyncratic risk and aggregate risk. We introduce a new source of risk, heritable … risk, in which there is a positive correlation between the fitness of a newborn agent and the fitness of her parent …

for values of risk aversion greater than unity. This note studies the relationship between uncertainty and long … drives unbounded growth. With these preferences, risk aversion and intertemporal elasticity of substitution are allowed to be …