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113
Prospect theory on the brain? Toward a cognitive neuroscience of decision under risk
, 2005
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Neural bases of motivated reasoning: An fMRI study of emotional constraints on partisan political judgment in the 2004 US Presidential Election
- Journal of Cognitive Neuroscience
, 2006
"... & Research on political judgment and decision-making has converged with decades of research in clinical and social psy-chology suggesting the ubiquity of emotion-biased motivated reasoning. Motivated reasoning is a form of implicit emotion regulation in which the brain converges on judgments tha ..."
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& Research on political judgment and decision-making has converged with decades of research in clinical and social psy-chology suggesting the ubiquity of emotion-biased motivated reasoning. Motivated reasoning is a form of implicit emotion regulation in which the brain converges on judgments that minimize negative and maximize positive affect states associ-ated with threat to or attainment of motives. To what extent motivated reasoning engages neural circuits involved in ‘‘cold’’ reasoning and conscious emotion regulation (e.g., suppres-sion) is, however, unknown. We used functional neuroimag-ing to study the neural responses of 30 committed partisans during the U.S. Presidential election of 2004. We presented subjects with reasoning tasks involving judgments about in-formation threatening to their own candidate, the opposing candidate, or neutral control targets. Motivated reasoning was associated with activations of the ventromedial prefrontal cor-tex, anterior cingulate cortex, posterior cingulate cortex, in-sular cortex, and lateral orbital cortex. As predicted, motivated reasoning was not associated with neural activity in regions previously linked to cold reasoning tasks and conscious (explicit) emotion regulation. The findings provide the first neuroimaging evidence for phenomena variously described as motivated reasoning, implicit emotion regulation, and psy-chological defense. They suggest that motivated reasoning is qualitatively distinct from reasoning when people do not have a strong emotional stake in the conclusions reached. &
The multiplicity of emotions: A framework of emotional functions in decision making
- Judgm. Decis. Mak
"... A four-fold classification of emotions with respect to their functions in decision making is proposed. It is argued that emotions are not homogenous concerning their role in decision making, but that four distinct functions can be distinguished concerning emotional phenomena. One function is to prov ..."
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Cited by 23 (1 self)
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A four-fold classification of emotions with respect to their functions in decision making is proposed. It is argued that emotions are not homogenous concerning their role in decision making, but that four distinct functions can be distinguished concerning emotional phenomena. One function is to provide information about pleasure and pain for preference construction, a second function is to enable rapid choices under time pressure, a third function is to focus attention on relevant aspects of a decision problem, and a fourth function is to generate commitment concerning morally and socially significant decisions. The pertinent literature on the relationship between emotion and decision making is reviewed, and it is concluded that most approaches fit into the proposed framework. We argue that a precise conceptualization of emotional phenomena is required to advance our understanding of the complex role of emotions in decision making.
Decisions from experience and statistical probabilities: why they trigger different choices than a priori probabilities
, 2010
"... The distinction between risk and uncertainty is deeply entrenched in psychologists ’ and economists ’ thinking. Knight (1921), to whom it is frequently attributed, however, went beyond this dichotomy. Within the domain of risk, he set apart a priori and statistical probabilities, a distinction that ..."
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The distinction between risk and uncertainty is deeply entrenched in psychologists ’ and economists ’ thinking. Knight (1921), to whom it is frequently attributed, however, went beyond this dichotomy. Within the domain of risk, he set apart a priori and statistical probabilities, a distinction that maps onto that between decisions from description and experience, respectively. We argue this distinction is important because risky choices based on a priori (described) and statistical (experienced) probabilities can substantially diverge. To understand why, we examine various possible contributing factors to the description–experience gap. We find that payoff variability and memory limitations play only a small role in the emergence of the gap. In contrast, the presence of rare events and their representation as either natural frequencies in decisions from experience or single-event probabilities in decisions from description appear relevant for the gap. Copyright # 2009 John Wiley & Sons, Ltd. key words decisions; experience; information representation; rare events; risk and uncertainty; risky choice; sampling
Hierarchical Bayesian parameter estimation for cumulative prospect theory
, 2011
"... a b s t r a c t Cumulative prospect theory (CPT Tversky & Kahneman, 1992) has provided one of the most influential accounts of how people make decisions under risk. CPT is a formal model with parameters that quantify psychological processes such as loss aversion, subjective values of gains and ..."
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Cited by 14 (2 self)
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a b s t r a c t Cumulative prospect theory (CPT Tversky & Kahneman, 1992) has provided one of the most influential accounts of how people make decisions under risk. CPT is a formal model with parameters that quantify psychological processes such as loss aversion, subjective values of gains and losses, and subjective probabilities. In practical applications of CPT, the model's parameters are usually estimated using a singleparticipant maximum likelihood approach. The present study shows the advantages of an alternative, hierarchical Bayesian parameter estimation procedure. Performance of the procedure is illustrated with a parameter recovery study and application to a real data set. The work reveals that without particular constraints on the parameter space, CPT can produce loss aversion without the parameter that has traditionally been associated with loss aversion. In general, the results illustrate that inferences about people's decision processes can crucially depend on the method used to estimate model parameters.
Keeping doors open: The effect of unavailability on incentives to keep options viable
- Management Science
, 2004
"... Decision makers must often expand efforts to preserve the future viability of current options. Do decision makers sometimes value such options more highly than the outcomes they make possible? In five experiments using a “door game, ” we demonstrate that decision makers care a great deal about opti ..."
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Cited by 14 (0 self)
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Decision makers must often expand efforts to preserve the future viability of current options. Do decision makers sometimes value such options more highly than the outcomes they make possible? In five experiments using a “door game, ” we demonstrate that decision makers care a great deal about options and are willing to invest effort and money in order to keep options open, even when the options themselves seem to be of little interest. This general decision rule of keeping options viable is shown to be resilient to information about the outcomes, to increased experience, to the cost of the options, and to the saliency of the cost and of the option elimination. Experiment 5 provides initial evidence that the mechanism underlying the tendency to keep doors open is a type of loss aversion and not regret.- 2-I find that absence still increases love. — Hopkins Distance sometimes endears friendship, and absence sweeteneth it.—Howell Absence makes the heart grow fonder: Isle of Beauty, fare thee well! — Bayly Imagine a student who is uncertain whether he wants to become a computer programmer or a poet. Our student in this case is facing a dilemma: On one hand, he wants to keep both options available
The Affective Costs of Overconfidence
- JOURNAL OF BEHAVIORAL DECISION MAKING J. BEHAV. DEC. MAKING, 17: 281–295 (2004)
, 2004
"... Positive illusions, though often beneficial (Taylor & Brown, 1988), can diminish the pleasure of outcomes. This prediction follows from decision affect theory. We investigated this prediction by measuring the confidence that recreational basketball players felt while making shots and the pleasur ..."
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Cited by 13 (1 self)
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Positive illusions, though often beneficial (Taylor & Brown, 1988), can diminish the pleasure of outcomes. This prediction follows from decision affect theory. We investigated this prediction by measuring the confidence that recreational basketball players felt while making shots and the pleasure they felt with subsequent outcomes. Results showed that most players were overconfident. Those who were more overconfident tended to experience less enjoyment with their outcomes. Using individual parameter estimates from decision affect theory, we estimated how each player would have felt if their self assessments had been accurate. For the vast majority, better calibration would have led to greater pleasure. In a second study, we randomly assigned players to a debiasing treatment condition or a control condition. Relative to the control players, debiased players were better calibrated and derived greater average pleasure from the task.
Decision Making
"... y be factored into the decision more heavily than is price. The execu- tive may choose to ride dow-ntown by taxi and then implement this decision by standing on line and taking a taxi to the hotel. To bring these sorts of decision situations into the laboratory, researchers commonly focused on the g ..."
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Cited by 13 (0 self)
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y be factored into the decision more heavily than is price. The execu- tive may choose to ride dow-ntown by taxi and then implement this decision by standing on line and taking a taxi to the hotel. To bring these sorts of decision situations into the laboratory, researchers commonly focused on the goal of obtaining money, which they assume is shared across people. In the prototypical task, subjects are given choice options that differ in probability and amount. The use of gambles enabled researchers to explore decision making under risk. Often, a number of different choices are made in a single experimental session, and the pattern of choices across sets is analyzed. For ample, people might be asked whether they prefer a 45% chance to win $200 or a 50% chance to win $150. Later in the same ses sion, they might be asked whether they prefer a 90% chance to win $200 or a 100% chance to win $150. At issue in studies like these is the consistency of people's choices. The anal- yses would in
Testing theories of happiness
- In
, 2005
"... Abstract: Happiness research in economics takes reported subjective well-being as a proxy measure for utility and has already provided many interesting insights about human well-being and its determinants. We argue that future research on happiness in economics has a lot of potential, but that it ne ..."
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Cited by 12 (2 self)
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Abstract: Happiness research in economics takes reported subjective well-being as a proxy measure for utility and has already provided many interesting insights about human well-being and its determinants. We argue that future research on happiness in economics has a lot of potential, but that it needs to be guided more by theory. We propose two ways to test theories of happiness, and illustrate them with two applications. First, reported subjective well-being can contribute towards a new understanding of utility in economics. Here, we study the introduction of income aspirations in individuals ’ utility functions in order to improve our understanding of how income affects individual well-being. Second, happiness data offers a new possibility of discriminating between different models of behavior. This is studied for theories of marriage, which crucially depend on auxiliary assumptions as to what contributes to well-being in marriage. Both applications are empirically tested with panel data for Germany.
Neural affective decision theory: Choices, brains, and emotions
- PROCEEDINGS OF THE INTERNATIONAL CONFERENCE ON COGNITIVE MODELLING, ICCM’04
, 2008
"... We present a theory and neurocomputational model of how specific brain operations produce complex decision and preference phenomena, including those explored in prospect theory and decision affect theory. We propose that valuation and decision making are emotional processes, involving interacting br ..."
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Cited by 12 (6 self)
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We present a theory and neurocomputational model of how specific brain operations produce complex decision and preference phenomena, including those explored in prospect theory and decision affect theory. We propose that valuation and decision making are emotional processes, involving interacting brain areas that include two expectation-discrepancy subsystems: a dopamine-encoded system for positive events and a serotonin-encoded system for negative ones. The model provides a rigorous account of loss aversion and the shape of the value function from prospect theory. It also suggests multiple distinct neurological mechanisms by which information framing may affect choices, including ones involving anticipated pleasure. It further offers a neural basis for the interactions among affect, prior expectations and counterfactual comparisons explored in decision affect theory. Along with predicting the effects of particular brain disturbances and damage, the model suggests specific neurological explanations for individual differences observed in choice and valuation behaviors.
