40 research outputs found

    Five principles for studying people's use of heuristics

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    Abstract: The fast and frugal heuristics framework assumes that people rely on an adaptive toolbox of simple decision strategiesā€”called heuristicsā€”to make inferences, choices, estimations, and other decisions. Each of these heuristics is tuned to regularities in the structure of the task environment and each is capable of exploiting the ways in which basic cognitive capacities work. In doing so, heuristics enable adaptive behavior. In this article, we give an overview of the framework and formulate five principles that should guide the study of peopleā€™s adaptive toolbox. We emphasize that models of heuristics should be (i) precisely defined; (ii) tested comparatively; (iii) studied in line with theories of strategy selection; (iv) evaluated by how well they predict new data; and (vi) tested in the real world in addition to the laboratory. Key words: fast and frugal heuristics; experimental design; model testing As we write this article, international financial markets are in turmoil. Large banks are going bankrupt almost daily. It is a difficult situation for financial decision makers ā€” regardless of whether they are lay investors trying to make small-scale profits here and there or professionals employed by the finance industry. To safeguard their investments, these decision makers need to be able to foresee uncertain future economic developments, such as which investments are likely to be the safest and which companies are likely to crash next. In times of rapid waves of potentially devastating financial crashes, these informed bets must often be made quickly, with little time for extensive information search or computationally demanding calculations of likely future returns. Lay stock traders in particular have to trust the contents of their memories, relying on incomplete, imperfec

    Impaired learning to dissociate advantageous and disadvantageous risky choices in adolescents

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    Adolescence is characterized by a surge in maladaptive risk-taking behaviors, but whether and how this relates to developmental changes in experience-based learning is largely unknown. In this preregistered study, we addressed this issue using a novel task that allowed us to separate the learning-driven optimization of risky choice behavior over time from overall risk-taking tendencies. Adolescents (12ā€“17Ā years old) learned to dissociate advantageous from disadvantageous risky choices less well than adults (20ā€“35Ā years old), and this impairment was stronger in early than mid-late adolescents. Computational modeling revealed that adolescentsā€™ suboptimal performance was largely due to an inefficiency in core learning and choice processes. Specifically, adolescents used a simpler, suboptimal, expectation-updating process and a more stochastic choice policy. In addition, the modeling results suggested that adolescents, but not adults, overvalued the highest rewards. Finally, an exploratory latent-mixture model analysis indicated that a substantial proportion of the participants in each age group did not engage in experience-based learning but used a gamblerā€™s fallacy strategy, stressing the importance of analyzing individual differences. Our results help understand why adolescents tend to make more, and more persistent, maladaptive risky decisions than adults when the values of these decisions have to be learned from experience

    Personalized bank campaign using artificial neural networks

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    Internship Report presented as the partial requirement for obtaining a Master's degree in Data Science and Advanced AnalyticsNowadays, high market competition requires Banks to focus more at individual customersĀ“ behaviors. Specifically, customers prefer a personal relationship with the finance institution and they want to receive exclusive offers. Thus, a successful cross-sell and up- sell personalized campaign requires to know the individual client interest for the offer. The aim of this project is to create a model, that, is able to identify the probability of a customer to buy a product of the bank. The strategic plan is to run a long-term personalized campaign and the challenge is to create a model which remains accurate during this time. The source datasets consist of 12 dataMarts, which represent a monthly snapshot of the Bankā€™s dataWarehouse between April 2016 and March 2017. They consist of 191 original variables, which contain personal and transactional information and around 1.400.000 clients each. The selected modeling technique is Artificial Neural Networks and specifically, Multilayer Perceptron running with Back-propagation. The results showed that the model performs well and the business can use it to optimize the profitability. Despite the good results, business must monitor the modelĀ“s outputs to check the performance through time

    If God Handed Us the Ground-Truth Theory of Memory, How Would We Recognize It?

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    What makes a scientific theory convincing? We have many formal models of human memory, but no agreement about which is the right one. If anything, we agree that they are all wrong. By analyzing the properties of successful theories in physics, I propose that we will be convinced by a theory of memory only when it is able to make precise point predictions for individual peopleā€™s behavior in any new memory task, manipulation, or paradigm we could construct, without refitting parameters to do so or only by estimating its parameters for each individual on an independent standardized battery of tests. Such a theory would not only be able to accurately describe lab-based empirical effects but would also be practically useful. I highlight how some of our current model development and evaluation practices might be holding us back and outline some important empirical steps necessary to evaluate theories by this standard
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