Behavior in a dynamic decision problem: An analysis of experimental evidence using a bayesian type classification algorithm

It has been long recognized that different people may use different strategies, or decision rules, when playing games or dealing with other complex decision problems. We provide a new Bayesian procedure for drawing inferences about the nature and number of decision rules that are present in a population of agents. We show that the algorithm performs well in both a Monte Carlo study and in an empirical application. We apply our procedure to analyze the actual behavior of subjects who are confronted with a difficult dynamic stochastic decision problem in a laboratory setting. The procedure does an excellent job of grouping the subjects into easily interpretable types. Given the difficultly of the decision problem, we were surprised to find that nearly a third of subjects were a “Near Rational” type that played a good approximation to the optimal decision rule. More than 40% of subjects followed a rule that we describe as “fatalistic,” since they play as if they don’t appreciate the extent to which payoffs are a controlled stochastic process. And about a quarter of the subjects are classified as “Confused,” since they play the game quite poorly. Interestingly, we find that those subjects who practiced most before playing the game for money were the most likely to play poorly. Thus, lack of effort does not seem to account for poor performance. It is our hope that, in future work, our type classification algorithm will facilitate the positive analysis of peoples’ behavior in many types of complex decision problems.behavioral experiments type-classification bayesian

HEURISTICS USED BY HUMANS WITH PREFRONTAL CORTEX DAMAGE: TOWARD AN EMPIRICAL MODEL OF PHINEAS GAGE

In many research contexts it is necessary to group experimental subjects into behavioral “types.” Usually, this is done by pre-specifying a set of candidate decision-making heuristics and then assigning each subject to the heuristic that best describes his/her behavior. Such approaches might not perform well when used to explain the behavior of subjects with prefrontal cortex damage. The reason is that introspection is typically used to generate the candidate heuristic set, but this procedure is likely to fail when applied to the decision-making strategies of subjects with brain damage. This research uses the type classification approach introduced by Houser, Keane and McCabe (2002) to investigate the heuristics used by subjects in the gambling experiment (Bechara, Damasio, Damasio and Anderson, 1994). An advantage of our classification approach is that it does not require us to specify the nature of subjects’ heuristics in advance. Rather, both the number and nature of the heuristics used are discerned directly from the experimental data. Our sample includes normal subjects, as well as subjects with damage to the ventromedial (VM) area of the prefrontal cortex. Subjects are “clustered” according to similarities in their heuristic, and this clustering does not preclude some normal and VM subjects from using the same decision rule. Our results are consistent with what others have found in subsequent experimentation with VM patients.experiments, heuristics, neuroeconomics, behavioral economics

Disposition, History and Contributions in Public Goods Experiments

Private incentives to invest in a public good are modeled as self- interested reciprocity where individuals use reputational scoring rules to determine their optimal level of investment. The model predicts that the disposition of any subject to cooperate is revealed by their first period investment in a voluntary contribution experiment, and that grouping cooperative subjects together will improve, and in some circumstances sustain, their private investment in the public good. Actual investment behavior is then studied with laboratory experiments that compare the contributions of subjects randomly reassigned into groups to contributions under a mechanism that sorts subjects into groups based on their individual investment decisions. The sorting mechanism helps to keep subjects with cooperative dispositions together and leads to statistically significant increases, relative to the random matching condition, in cooperators’ investments in the public good.public goods, experiments, cooperation, type classification, individual differences

A Functional Imaging Study of Cooperation in Two-Person reciprocal Exchange

Cooperation between individuals requires the ability to infer each other’s mental states to form shared expectations over mutual gains and make cooperative choices that realize these gains. From evidence that the ability for mental state attribution involves the use of prefrontal cortex, we hypothesize that this area is involved in integrating theory-of-mind processing with cooperative actions. We report data from a functional MRI experiment designed to test this hypothesis. Subjects in a scanner played standard two-person ‘‘trust and reciprocity’’ games with both human and computer counterparts for cash rewards. Behavioral data shows that seven subjects consistently attempted cooperation with their human counterpart. Within this group prefrontal regions are more active when subjects are playing a human than when they are playing a computer following a fixed (and known) probabilistic strategy. Within the group of five noncooperators, there are no significant differences in prefrontal activation between computer and human conditions.Neuroeconomics; Exchange; Trust; Theory-of-Mind; functional Imaging of brain

The Differences in Vegetation Type on North and South-Facing Slopes

Our project investigated the relationship between climate change and vegetation type conversion in the Santa Monica Mountains on north and south facing slopes. Our hypothesis is that with a shift in climate towards dryer, hotter, and longer summers, and shorter and dryer winters, we will see a shift in the density of native chaparral in the Santa Monica mountains, and possibly an influx of non-native species. We tested this hypothesis by choosing three study sites that were on north/south ridgelines to simulate a dryer, harsher climate (south) and a more temperate climate (north). Using the point-quarter method to measure the prevalence of each type of plant in each study area we were able to determine what was growing on each slope. Our investigation is significant and relevant because if our hypothesis is correct, and there is a shift towards coastal sage and non-natives in areas that normally had chaparral, there would be serious consequences for the ecosystem and humans. An increase in smaller plants would decrease fire interval, which is dangerous to humans and is devastating to the plant infrastructure as it creates a positive feedback loop that promotes the influx of dry flash fuel invasive and exacerbates the decrease of the fire return interval

Evaporative Moisture Loss from Heterogeneous Stone: Material- Environment Interactions During Drying

The complexities of evaporation from structurally and mineralogically heterogeneous sandstone (Locharbriggs Sandstone) are investigated through a laboratory-based experiment in which a variety of environmental conditions are simulated. Data reported demonstrate the significance of material-environment interactions on the spatial and temporal variability of evaporative dynamics. Evaporation from porous stone is determined by the interplay between environmental, material and solution properties, which govern the rate and mode by which water is transmitted to, and subsequently removed from, an evaporating surface. Initially, when the stone is saturated, evaporation is characterized by high rates of moisture loss primarily controlled by external atmospheric conditions. However, as drying progresses, eventually the hydraulic continuity between the stone surface and subsurface is disrupted with recession of the drying front and a decrease in evaporation rates which become reliant on the ability of the material to transport water vapour to the block surface. Pore size distribution and connectivity, as well as other material properties, control the timing of each stage of evaporation and the nature of the transition. These experimental data highlight the complexity of evaporation, demonstrating that different regions of the same stone can exhibit varying moisture dynamics during drying and that the rate and nature of evaporative loss differs under different environmental conditions. The results identify the importance of material-environment interactions during drying and that stone micro-environmental conditions cannot be inferred from ambient data alone. These data have significance for understanding the spatial distribution of stone surface weathering-related morphologies in both the natural and built environments where mineralogical and/or structural heterogeneity creates differences in moisture flux and hence variable drying rates. Such differences may provide a clearer explanation for the initiation and subsequent development of complex weathering responses where areas of significant deterioration can be found alongside areas that exhibit little or no evidence of surface breakdown.Madrid’s Regional Government Geo-materials Programme (S2013/MIT-2914)Peer reviewe

Resolving Conflicts between Multilateral Environmental Agreements: The Case of the Montreal and Kyoto Protocols

The Kyoto Protocol to the United Nations Framework Convention on Climate Change and the Montreal Protocol on Substances that Deplete the Ozone Layer are multilateral environmental agreements that regulate the use of chemicals that contribute to climate change and ozone depletion. The Montreal Protocol, however, encourages the replacement of ozone depleting substances with chemicals that contribute to climate change. Likewise, the Kyoto Protocol encourages the production of an ozone depleting substance by allowing companies to profit by destroying the byproduct of its manufacture. This comment attempts to resolve these conflicts through conventional and customary international law. It concludes that the treaty regimes can apply favorability, effectiveness, and cooperation principles to resolve the conflicts, and recommends changes to the Montreal Protocol regime to implement these principles