Boundedly Rational Decision Emergence - A General Perspective and Some Selective Illustrations

A general framework is described specifying how boundedly rational decision makers generate their choices. Starting from a "Master Module" which keeps an inventory of previously successful and unsuccessful routines several submodules can be called forth which either allow one to adjust behavior (by "Learning Module" and "Adaptation Procedure") or to generate new decision routines (by applying "New Problem Solver"). Our admittedly bold attempt is loosely related to some stylized experimental results.

Against Game Theory

People make choices. Often, the outcome depends on choices other people make. What mental steps do people go through when making such choices? Game theory, the most influential model of choice in economics and the social sciences, offers an answer, one based on games of strategy such as chess and checkers: the chooser considers the choices that others will make and makes a choice that will lead to a better outcome for the chooser, given all those choices by other people. It is universally established in the social sciences that classical game theory (even when heavily modified) is bad at predicting behavior. But instead of abandoning classical game theory, those in the social sciences have mounted a rescue operation under the name of “behavioral game theory.” Its main tool is to propose systematic deviations from the predictions of game theory, deviations that arise from character type, for example. Other deviations purportedly come from cognitive overload or limitations. The fundamental idea of behavioral game theory is that, if we know the deviations, then we can correct our predictions accordingly, and so get it right. There are two problems with this rescue operation, each of them is fatal. (1) For a chooser, contemplating the range of possible deviations, as there are many dozens, actually makes it exponentially harder to figure out a path to an outcome. This makes the theoretical models useless for modeling human thought or human behavior in general. (2) Modeling deviations are helpful only if the deviations are consistent, so that scientists (and indeed decision makers) can make predictions about future choices on the basis of past choices. But the deviations are not consistent. In general, deviations from classical models are not consistent for any individual from one task to the next or between individuals for the same task. In addition, people’s beliefs are in general not consistent with their choices. Accordingly, all hope is hollow that we can construct a general behavioral game theory. What can replace it? We survey some of the emerging candidates

Constructivist and Ecological Rationality in Economics

When we leave our closet, and engage in the common affairs of life, (reason's) conclusions seem to vanish, like the phantoms of the night on the appearance of the morning; and 'tis difficult for us to retain even that conviction, which we had attained with difficulty (Hume, 1739/, p 507). we must constantly adjust our lives, our thoughts and our emotions, in order to live simultaneously within different kinds of orders according to different rules. If we were to apply the unmodified, uncurbed rules (of caring intervention to do visible 'good') of the small band or troop, or our families to the (extended order of cooperation through markets), as our instincts and sentimental yearnings often make us wish to do, we would destroy it. Yet if we were to always apply the (noncooperative) rules of the extended order to our more intimate groupings, we would crush them. (Hayek, 1988, p 18). (Italics are his, parenthetical reductions are mine).behavioral economics; experimental economics

Giving or Taking: The Role of Dispositional Power Motivation and Positive Affect in Profit Maximization?

Socio-economic decisions are commonly explained by rational cost vs. benefit considerations, whereas person variables have not usually been considered. The present study aims at investigating the degree to which dispositional power motivation and affective states predict socio-economic decisions. The power motive was assessed both indirectly and directly using a TAT-like picture test and a power motive self-report, respectively. After nine months, 62 students completed an affect rating and performed on a money allocation task (Social Values Questionnaire). We hypothesized and confirmed that dispositional power should be associated with a tendency to maximize one’s profit but to care less about another party’s profit. Additionally, positive affect showed effects in the same direction. The results are discussed with respect to a motivational approach explaining socio-economic behaviour.economic decision-making, rational choice theory, personality, implicit power motive, positive affect, operant motive test

The Frames Behind the Games: Player's Perceptions of Prisoner's Dilemma, Chicken, Dictator, and Ultimatum Games

The tension between cooperative and competitive impulses is an eternal issue for every society. But how is this problem perceived by individual participants in the context of a behavioral games experiment? We first assess individual differences in players’ propensity to cooperate in a series of experimental games. We then use openended interviews with a subset of those players to investigate the various concepts (or ‘frames’) they used when thinking about self-interested and cooperative actions. More generally, we hope to raise awareness of player’s perceptions of experimental environments to inform both the design and interpretation of experiments and experimental data.Laboratory Experiment, Frames, Selfishness, Cooperation

Behavioural Phenotypes and the Structure of Human Cognition

Human cognitive uniqueness is often defined in terms of cognitive abilities such as introspection, imitation and cooperativeness. However, little is known about how those traits vary in populations or correlate across individuals. Here we test whether those three cognitive domains are correlated manifestations of an underlying factor, analogous to the psychometric ‘g’ factor, or independent ‘behavioural phenotypes’, analogous to the ‘Big-Five’ personality components. We selected eight variables measuring introspection and extraversion, verbal and physical imitation, cooperation and punishment, and evaluated their individual variability, domain-consistency and sub-structuring in a sample of 84 individuals. Results show high variation and limited clustering into three independent ‘behavioural phenotypes’ of introspection, imitation and cooperation. Only one significant correlation was identified (between two measures of extraversion), while other within-domain measures (introspection vs. extraversion, verbal vs. physical imitation, and cooperation vs. punishment) were not associated. Finally, no between-domain association was identified either through correlations or factor analysis. Overall, the results do not lend support to the hypothesis of a general ‘behavioural phenotype’ underlying individual behaviour. The independence of behaviours of introspection, imitation and cooperation may be the reason why individuals are able to adopt different behavioural strategies (combinations of behavioural phenotypes) and play distinct roles in the maintenance of human distinctive features such as hyper-cooperation and cumulative culture

Decisions, decisions, decisions: the development and plasticity of reinforcement learning, social and temporal decision making in children

Human decision-making is the flexible way people respond to their environment, take actions, and plan toward long-term goals. It is commonly thought that humans rely on distinct decision-making systems, which are either more habitual and reflexive or deliberate and calculated. How we make decisions can provide insight into our social functioning, mental health and underlying psychopathology, and ability to consider the consequences of our actions. Notably, the ability to make appropriate, habitual or deliberate decisions depending on the context, here referred to as metacontrol, remains underexplored in developmental samples. This thesis aims to investigate the development of different decision-making mechanisms in middle childhood (ages 5-13) and to illuminate the potential neurocognitive mechanisms underlying value-based decision-making. Using a novel sequential decision-making task, the first experimental chapter presents robust markers of model-based decision-making in childhood (N = 85), which reflects the ability to plan through a sequential task structure, contrary to previous developmental studies. Using the same paradigm, in a new sample via both behavioral (N = 69) and MRI-based measures (N = 44), the second experimental chapter explores the neurocognitive mechanisms that may underlie model-based decision-making and its metacontrol in childhood and links individual differences in inhibition and cortical thickness to metacontrol. The third experimental chapter explores the potential plasticity of social and intertemporal decision-making in a longitudinal executive function training paradigm (N = 205) and initial relationships with executive functions. Finally, I critically discuss the results presented in this thesis and their implications and outline directions for future research in the neurocognitive underpinnings of decision-making during development