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In a model inspired by neuroscience, we show that constrained optimal perception encodes lottery rewards using an S-shaped encoding function and over-samples low-probability events. The implications of this perception strategy for behavior depend on the decision-maker's understanding of the risk. The strategy does not distort choice in the limit as perception frictions vanish when the decision-maker fully understands the decision problem. If, however, the decision-maker underrates the complexity of the decision problem, then risk attitudes reflect properties of the perception strategy even for vanishing perception frictions. The model explains adaptive risk attitudes and probability weighting as in prospect theory and, additionally, predicts that risk attitudes are strengthened by time pressure and attenuated by anticipation of large risks.

Understanding the purpose of sex remains one of the most important unresolved problems in evolutionary biology. The difficulty is not that there are too few theories of sex, the difficulty is that there are too many and none stand out. To distinguish between theories we suggest the following question: Why are there no triparental species in which an offspring is composed of the genetic material of three individuals? A successful theory should confer an advantage to biparental sex over asexual reproduction without conferring an even greater advantage to triparental sex. We pose our question in the context of two leading theories of sex, the (deterministic) mutational hypothesis that sex reduces the rate at which harmful mutations accumulate, and the red queen hypothesis that sex reduces the impact of parasitic attack by increasing genotypic variability. We show that the mutational hypothesis fails to provide an answer to the question because it implies that triparental sex dominates biparental sex, so the latter should never be observed. In contrast, we show that the red queen hypothesis is able to explain biparental sex without conferring an even greater advantage to triparental sex.

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.