ICES Experimental Economics Brown Bag Lecture
Survival First: Decision Architecture Under Ruin, Insurance, and Deep Uncertainty
Friday, March 6, 2026 4:00 PM to 5:00 PM EST
Vernon Smith Hall (formerly Metropolitan Building), Room 5075
The Interdisciplinary Center for Economic Science (ICES) presents an ICES Brown Bag Lecture featuring:
George Mason University
Survival First: Decision Architecture Under Ruin, Insurance, and Deep Uncertainty
Abstract
Standard expected utility theory treats risk preferences as stable parameters governing smooth tradeoffs between risk and return. Yet evidence from dynamic portfolio experiments, path-dependent choice, risk-sensitive foraging theory, and the ecological rationality program suggests that decision-makers facing survival-relevant thresholds may switch to qualitatively different decision rules rather than merely adjusting curvature parameters. This paper tests that hypothesis experimentally. In a 100-round dynamic portfolio allocation task with an absorbing ruin state, subjects allocate wealth across assets of varying risk under a 2×2 design crossing insurance availability with deep uncertainty. The design discriminates between competing accounts of behavior near ruin: loss-averse parameter adjustment, lexicographic survival-first heuristics, and time-average growth optimization. The analysis tests for discrete regime switching in allocation behavior as wealth approaches the ruin boundary, differential heuristic adoption across uncertainty conditions, and whether insurance shifts the survival threshold or instead induces risk compensation.
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