89 research outputs found

    The neural basis of bounded rational behavior

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    Bounded rational behaviour is commonly observed in experimental games and in real life situations. Neuroeconomics can help to understand the mental processing underlying bounded rationality and out-of-equilibrium behaviour. Here we report results from recent studies on the neural basis of limited steps of reasoning in a competitive setting – the beauty contest game. We use functional magnetic resonance imaging (fMRI) to study the neural correlates of human mental processes in strategic games. We apply a cognitive hierarchy model to classify subject’s choices in the experimental game according to the degree of strategic reasoning so that we can identify the neural substrates of different levels of strategizing. We found a correlation between levels of strategic reasoning and activity in a neural network related to mentalizing, i.e. the ability to think about other’s thoughts and mental states. Moreover, brain data showed how complex cognitive processes subserve the higher level of reasoning about others. We describe how a cognitive hierarchy model fits both behavioural and brain data.Game theory, Bounded rationality, Neuroeconomics

    Partner Selection in Public Goods Experiments

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    This paper studies the effect of introducing costly partner selection for the voluntary contribution to a public good. Subjects participate in six sequences of five rounds of a two-person public good game in partner design. At the end of each sequence, subjects can select a new partner out of six group members. Unidirectional and bidirectional partner selection mechanisms are introduced and compared to controls with random partner rematching. Results demonstrate significantly higher cooperation in correspondence to unidirectional partner selection than to bidirectional selection and random rematching. Average monetary effort for being able to choose a partner is substantially high and remains stable.Public goods, Partner selection, Experimental economics

    The neural basis of bounded rational behavior

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    Bounded rational behaviour is commonly observed in experimental games and in real life situations. Neuroeconomics can help to understand the mental processing underlying bounded rationality and out-of-equilibrium behaviour. Here we report results from recent studies on the neural basis of limited steps of reasoning in a competitive setting – the beauty contest game. We use functional magnetic resonance imaging (fMRI) to study the neural correlates of human mental processes in strategic games. We apply a cognitive hierarchy model to classify subject’s choices in the experimental game according to the degree of strategic reasoning so that we can identify the neural substrates of different levels of strategizing. We found a correlation between levels of strategic reasoning and activity in a neural network related to mentalizing, i.e. the ability to think about other’s thoughts and mental states. Moreover, brain data showed how complex cognitive processes subserve the higher level of reasoning about others. We describe how a cognitive hierarchy model fits both behavioural and brain data

    The impact of perceived similarity on tacit coordination: propensity for matching and aversion to decoupling choices

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    Homophily, or “love for similar others,” has been shown to play a fundamental role in the formation of interpersonal ties and social networks. Yet no study has investigated whether perceived similarities can affect tacit coordination. We had 68 participants attempt to maximize real monetary earnings by choosing between a safe but low paying option (that could be obtained with certainty) and a potentially higher paying but “risky” one, which depended on the choice of a matched counterpart. While making their choices participants were mutually informed of whether their counterparts similarly or dissimilarly identified with three person-descriptive words as themselves. We found that similarity increased the rate of “risky” choices only when the game required counterparts to match their choices (stag hunt games). Conversely, similarity led to decreased risk rates when they were to tacitly decouple their choices (entry games). Notably, though similarity increased coordination in the matching environment, it did not did not increase it in the decoupling game. In spite of this, similarity increased (expected) payoffs across both coordination environments. This could shed light on why homophily is so successful as a social attractor. Finally, this propensity for matching and aversion to decoupling choices was not observed when participants “liked” their counterparts but were dissimilar to them. We thus conclude that the impact of similarity of coordination should not be reduced to “liking” others (i.e., social preferences) but it is also about predicting them

    Tax Evasion: Cheating Rationally or Deciding Emotionally?

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    The economic models of tax compliance predict that individuals should evade taxes when the expected benefit of cheating is greater than its expected cost. When this condition is fulfilled, the high compliance however observed remains a puzzle. In this paper, we investigate the role of emotions as a possible explanation of tax compliance. Our laboratory experiment shows that emotional arousal, measured by Skin Conductance Responses, increases in the proportion of evaded taxes. The perspective of punishment after an audit, especially when the pictures of the evaders are publicly displayed, also raises emotions. We show that an audit policy that induces shame on the evaders favors compliance.emotions; experiment; neuro-economics; physiological measures; shame; tax evasion

    Does exposure to alternative decision rules change gaze patterns and behavioral strategies in games?

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    We run an eye-tracking experiment to investigate whether players change their gaze patterns and choices after they experience alternative models of choice in one-shot games. In phase 1 and 3, participants play 2 × 2 matrix games with a human counterpart; in phase 2, they apply specific decision rules while playing with a computer with known behavior. We classify participants in types based on their gaze patterns in phase 1 and explore attentional shifts in phase 3, after players were exposed to the alternative decision rules. Results show that less sophisticated players, who focus mainly on their own payoffs, change their gaze patterns towards the evaluation of others' incentives in phase 3. This attentional shift predicts an increase in equilibrium responses in relevant classes of games. Conversely, cooperative players do not change their visual analysis. Our results shed new light on theories of bounded rationality and on theories of social preferences

    Tax Evasion: Cheating Rationally or Deciding Emotionally?

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    Working paper GATE 2007-24The economic models of tax compliance predict that individuals should evade taxes when the expected benefit of cheating is greater than its expected cost. When this condition is fulfilled, the high compliance however observed remains a puzzle. In this paper, we investigate the role of emotions as a possible explanation of tax compliance. Our laboratory experiment shows that emotional arousal, measured by Skin Conductance Responses, increases in the proportion of evaded taxes. The perspective of punishment after an audit, especially when the pictures of the evaders are publicly displayed, also raises emotions. We show that an audit policy that induces shame on the evaders favors compliance.Les modèles économiques d'évasion fiscale prédisent que les individus devraient frauder dès que le bénéfice attendu de l'évasion dépasse son coût espéré. Sous cette condition, le fort taux de revenu déclaré pourtant observé constitue une énigme. Dans cet article, nous nous intéressons au rôle des émotions comme explication possible de ce phénomène. Notre expérience de laboratoire montre que l'intensité des émotions, mesurée par la conductance de la peau, augmente avec la proportion du revenu qui n'est pas déclarée. La perspective d'une sanction à l'issue d'un contrôle, en particulier lorsque la photo des contrevenants est diffusée, soulève également des émotions. Nous montrons qu'une politique de contrôle qui suscite la honte chez les fraudeurs favorise l'honnêteté fiscale

    Preference for Safe Over Risky Options in Binge Eating.

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    Binge eating has been usually viewed as a loss of control and an impulsive behavior. But, little is known about the actual behavior of binging patients (prevalently women) in terms of basic decision-making under risk or under uncertainty. In healthy women, stressful cues bias behavior for safer options, raising the question of whether food cues that are perceived as threatening by binging patients may modulate patients' behaviors towards safer options. A cross-sectional study was conducted with binging patients (20 bulimia nervosa (BN) and 23 anorexia nervosa binging (ANB) patients) and two control groups (22 non-binging restrictive (ANR) anorexia nervosa patients and 20 healthy participants), without any concomitant impulsive disorder. We assessed decisions under risk with a gambling task with known probabilities and decisions under uncertainty with the balloon analog risk taking task (BART) with unknown probabilities of winning, in three cued-conditions including neutral, binge food and stressful cues. In the gambling task, binging and ANR patients adopted similar safer attitudes and coherently elicited a higher aversion to losses when primed by food as compared to neutral cues. This held true for BN and ANR patients in the BART. After controlling for anxiety level, these safer attitudes in the food condition were similar to the ones under stress. In the BART, ANB patients exhibited a higher variability in their choices in the food compared to neutral condition. This higher variability was associated with higher difficulties to discard irrelevant information. All these results suggest that decision-making under risk and under uncertainty is not fundamentally altered in all these patients

    Multiple Sclerosis Decreases Explicit Counterfactual Processing and Risk Taking in Decision Making

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    Deficits in decision making (DM) are commonly associated with prefrontal cortical damage, but may occur with multiple sclerosis (MS). There are no data concerning the impact of MS on tasks evaluating DM under explicit risk, where different emotional and cognitive components can be distinguished.Methods: We assessed 72 relapsing-remitting MS (RRMS) patients with mild to moderate disease and 38 healthy controls in two DM tasks involving risk with explicit rules: (1) The Wheel of Fortune (WOF), which probes the anticipated affects of decisions outcomes on future choices; and (2) The Cambridge Gamble Task (CGT) which measures risk taking. Participants also underwent a neuropsychological and emotional assessment, and skin conductance responses (SCRs) were recorded.Results: In the WOF, RRMS patients showed deficits in integrating positive counterfactual information (p <0.005) and greater risk aversion (p <0.001). They reported less negative affect than controls (disappointment: p = 0.007; regret: p = 0.01), although their implicit emotional reactions as measured by post-choice SCRs did not differ. In the CGT, RRMS patients differed from controls in quality of DM (p = 0.01) and deliberation time (p = 0.0002), the latter difference being correlated with attention scores. Such changes did not result in overall decreases in performance (total gains).Conclusions: The quality of DM under risk was modified by MS in both tasks. The reduction in the expression of disappointment coexisted with an increased risk aversion in the WOF and alexithymia features. These concomitant emotional alterations may have implications for better understanding the components of explicit DM and for the clinical support of MS patients
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