Ratio Versus Difference Optimisation in Human Behaviour

Models of optimization have played an important role in the fields of evolution as well as economics. In the classical models of optimization, some tend to maximize the ratio of returns to investment, and others tend to maximize the difference between the two. Clarity in the contextual appropriateness of the ratio versus difference model came very recently. This clarity resolves several questions, paradoxes, and apparent fallacies in animal behaviour as well as in human social and economic behavior. Phenomena such as the offspring quality-quantity trade-off apply to human behaviour by principles similar to animal behaviour. Paradoxical phenomena such as the concord or sunk cost fallacy, the differential acceptance of high-yielding varieties in agriculture versus livestock, and the differential strategies of harvesting natural resources are better understood by ratio and difference optimization conditions. The human mind might have evolved an innate knowledge about when to use the ratio or difference model in decision making.