Randomness and Structure to Humans and Rhesus Macaques

Random, unpredictable, unstructured stimuli are an everyday part of life. Yet despite this breadth of experience and sophisticated statistical learning mechanisms, humans report patterning even in stimuli that are paradigmatically random. In two experiments, participants evaluated structured and random environments presented in a common statistical learning paradigm, the Serial Reaction Time task. I presented random and specifically nonrandom sequences to humans (Experiments 1 and 2) and rhesus macaques (Macaca mulatta, Experiment 2) to explore the seemingly antagonistic relationship between explicit, intuitive beliefs about these sequences and implicit statistical learning of sequence properties. Sequence predictability and experience with a given sequence type significantly predicted reaction times only weakly and inconsistently across the two experiments. Accordingly, participant choices scarcely deviated from chance, and in those rare cases they deviated from chance largely without directionality, and were not significantly predicted by either sequence predictability or experience with a given sequence type

Winning Probability of Selling Option on Crude Oil West Texas Intermediate

Nescinece of the winning probability of selling option on crude oil West Texas Intermediate (WTI) may be one cause of lack of research on selling options whereas option on WTI trading on NYMEX now becomes one of the largest trading in the world. The study of selling option is much less than buying option, so that people are less familiar to selling option performance probability. This study aims to analyze winning probability of the monthly return of selling option on WTI. The monthly return of selling option premium data was analyzed by the Black Scholes Option Pricing Method using daily WTI price data ranging from April 1984 to May 2017. It employs the runs test as non parametric statistical and one-sample proportion test as parametric statistical method. Empirical results indicate that winning probability of selling option on WTI at the far out of the money strikes is better than at the in the money position strikes. Keywords: Selling option, WTI, probability, randomness, proportio

Consistency, Heterogeneity, and Granularity of Individual Behavior under Uncertainty

By using graphical representations of budget sets over bundles of state-contingent commodities, we generate a very rich data set well-suited to studying behavior under uncertainty at the level of the individual subject. We test the data for consistency with the maximization hypothesis, and we estimate preferences using a two-parameter utility function based on Faruk Gul (1991). This specification provides a good interpretation to the data at the level of the individual subject and can account for the highly heterogeneous behaviors observed in the laboratory. The parameter estimates jointly describe attitudes toward risk and allow us to characterize the distribution of risk preferences in the population.uncertainty, revealed preference, Expected Utility Theory, loss/disappointment aversion, experiment

Flexibility of reinforcement biases and reaction times in competitive zero-sum games

In competitive zero-sum games with mixed equilibria, two rational players should make each of their game choices randomly, with no contingencies between their choices. However, people often deviate from this equilibrium by following a reinforcement heuristic of repeating moves that won on the previous round (win-stay) and avoiding the repetition of moves that did not win (lose-shift). In this thesis, I examine the flexibility of these reinforcement biases, and the speed of decision-making: under what circumstances do people make biased choices, and under what circumstances do people choose quickly or stop to deliberate? In Chapter 1, I review the current state of knowledge on how well people can produce or detect randomness, how reinforcement biases influence decision-making, and how processing speeds might differ between different game situations. In Chapters 2 and 3 I present four experiments where I examined performance in the games Rock, Paper & Scissors (RPS; Chapter 2, Experiments 1 and 2) and Matching Pennies (MP; Chapter 3, Experiments 3 and 4). Surprisingly, I found no reinforcement biases in RPS, but consistent reinforcement biases in MP. Additionally, participants made slower decisions after losses when they succeeded in the game due to finding an appropriate strategy to exploit an opponent’s pattern (Chapter 2), but not when they succeeded no matter what they did (Chapter 3). In Chapter 4, I present two experiments (Experiments 5 and 6) directly comparing performance in RPS and MP, designed to replicate the findings from Chapters 2 and 3, and examine why the previous studies only found reinforcement biases in MP. The results of these two last experiments suggest that reinforcement biases differ between RPS and MP due to different cognitive demands, and that there is considerable variability in reinforcement biases both between individuals and between the two types of bias. In Chapter 5, I discuss the contributions of the findings on the wider literature on bias and randomness detection, the generality of the reinforcement biases, and present some suggestions for future studies

The SGG risk elicitation task:Implementation and results

We propose a simple task for the elicitation of risk attitudes, initially used in Sabater-Grande and Georgantzís (2002) [SGG], capturing two dimensions of individual decision making: subjects’ average willingness to choose risky projects and their sensitivity towards variations in the return to risk. We report results from a large dataset obtained from the test and discuss regularities and the desirability of its bi-dimensionality when used to explain behaviour in other contexts.Psychometric Tests, Decision-making; Lotteries; Risk aversion.