Impediments to effective altruism: the role of subjective preferences in charitable giving

Charity could do the most good if every dollar donated went to causes that produced the greatest welfare gains. In line with this proposition, the “Effective Altruism” movement seeks to provide individuals with information regarding the effectiveness of charities in hopes that they will donate to organizations that maximize the social return of their donation. This paper investigates the extent to which presenting effectiveness information leads people to choose more effective charities. We find that even when effectiveness information is made easily comparable across options, it has a limited impact on choice. Specifically, people frequently choose less effective charity options when those options represent more subjectively preferred causes. In contrast to making a personal donation decision, outcome metrics are used to a much greater extent when choosing financial investments and when allocating aid resources as an agent of an organization. Implications for Effective Altruism are discussed

Accommodating stake effects under prospect theory

One of the stylized facts underlying prospect theory is a four-fold pattern of risk preferences. People have been shown to be risk seeking for small probability gains and large probability losses, while being risk averse for large probability gains and small probability losses. Another fourfold pattern of risk preferences over outcomes, postulated by Harry Markowitz in 1952, has received much less attention and is currently not integrated into prospect theory. In two experiments, we show that risk preferences may change over outcomes. While we find people to be risk seeking for small outcomes, this turns to risk neutrality and later risk aversion as stakes increase. We then show how a one-parameter logarithmic utility function fits such stake effects significantly better under prospect theory than the power or exponential functions mostly used when fitting prospect theory models. We further investigate the extent to which the use of ill-suited functional forms to represent utility may result in violations of prospect theory, and whether such violations disappear when using logarithmic utility

Risk preference and choice stochasticity during decisions for other people

In several contexts, such as finance and politics, people make choices that are relevant for others but irrelevant for oneself. Focusing on decision-making under risk, we compared monetary choices made for one’s own interest with choices made on behalf of an anonymous individual. Consistent with the previous literature, other-interest choices were characterized by an increased gambling propensity. We also investigated choice stochasticity, which captures how much decisions vary in similar conditions. An aspect related to choice stochasticity is how much decisions are tuned to the option values, and we found that this was higher during self-interest than during other-interest choices. This effect was observed only in individuals who reported a motivation to distribute rewards unequally, suggesting that it may (at least partially) depend on a motivation to make accurate decisions for others. Our results indicate that, during decision-making under risk, choices for other people are characterized by a decreased tuning to the values of the options, in addition to enhanced risk seeking

What You Find Depends on How You Measure It: Reactivity of Response Scales Measuring Predecisional Information Distortion in Medical Diagnosis

“Predecisional information distortion” occurs when decision makers evaluate new information in a way that is biased towards their leading option. The phenomenon is well established, as is the method typically used to measure it, termed “stepwise evolution of preference” (SEP). An inadequacy of this method has recently come to the fore: it measures distortion as the total advantage afforded a leading option over its competitor, and therefore it cannot differentiate between distortion to strengthen a leading option (“proleader” distortion) and distortion to weaken a trailing option (“antitrailer” distortion). To address this, recent research introduced new response scales to SEP. We explore whether and how these new response scales might influence the very proleader and antitrailer processes that they were designed to capture (“reactivity”). We used the SEP method with concurrent verbal reporting: fifty family physicians verbalized their thoughts as they evaluated patient symptoms and signs (“cues”) in relation to two competing diagnostic hypotheses. Twenty-five physicians evaluated each cue using the response scale traditional to SEP (a single response scale, returning a single measure of distortion); the other twenty-five did so using the response scales introduced in recent studies (two separate response scales, returning two separate measures of distortion: proleader and antitrailer). We measured proleader and antitrailer processes in verbalizations, and compared verbalizations in the single-scale and separate-scales groups. Response scales did not appear to affect proleader processes: the two groups of physicians were equally likely to bolster their leading diagnosis verbally. Response scales did, however, appear to affect antitrailer processes: the two groups denigrated their trailing diagnosis verbally to differing degrees. Our findings suggest that the response scales used to measure information distortion might influence its constituent processes, limiting their generalizability across and beyond experimental studies

Process account of curiosity and interest: a reward-learning perspective

Previous studies suggested roles for curiosity and interest in knowledge acquisition and exploration, but there has been a long-standing debate about how to define these concepts and whether they are related or different. In this paper, we address the definition issue by arguing that there is inherent difficulty in defining curiosity and interest, because both curiosity and interest are naïve concepts, which are not supposed to have a priori scientific definitions. We present a reward-learning framework of autonomous knowledge acquisition and use this framework to illustrate the importance of process account as an alternative to advance our understanding of curiosity and interest without being troubled by their definitions. The framework centers on the role of rewarding experience associated with knowledge acquisition and learning and posits that the acquisition of new knowledge strengthens the value of further information. Critically, we argue that curiosity and interest are the concepts that they subjectively construe through this knowledge-acquisition process. Finally, we discuss the implications of the reward-learning framework for education and empirical research in educational psychology