Measuring loss aversion under ambiguity: a method to make prospect theory completely observable

We propose a simple, parameter-free method that, for the first time, makes it possible to completely observe Tversky and Kahneman’s (1992) prospect theory. While methods exist to measure event weighting and the utility for gains and losses separately, there was no method to measure loss aversion under ambiguity. Our method allows this and thereby it can measure prospect theory’s entire utility function. Consequently, we can properly identify properties of utility and perform new tests of prospect theory. We implemented our method in an experiment and obtained support for prospect theory. Utility was concave for gains and convex for losses and there was substantial loss aversion. Both utility and loss aversion were the same for risk and ambiguity, as assumed by prospect theory, and sign-comonotonic trade-off consistency, the central condition of prospect theory, held

Confirmation bias in the utilization of others' opinion strength

Humans tend to discount information that undermines past choices and judgments. This confirmation bias has significant impact on domains ranging from politics to science and education. Little is known about the mechanisms underlying this fundamental characteristic of belief formation. Here we report a mechanism underlying the confirmation bias. Specifically, we provide evidence for a failure to use the strength of others' disconfirming opinions to alter confidence in judgments, but adequate use when opinions are confirmatory. This bias is related to reduced neural sensitivity to the strength of others' opinions in the posterior medial prefrontal cortex when opinions are disconfirming. Our results demonstrate that existing judgments alter the neural representation of information strength, leaving the individual less likely to alter opinions in the face of disagreement

Team reasoning and the rational choice of payoff-dominant outcomes in games

Standard game theory cannot explain the selection of payoff-dominant outcomes that are best for all players in common-interest games. Theories of team reasoning can explain why such mutualistic cooperation is rational. They propose that teams can be agents and that individuals in teams can adopt a distinctive mode of reasoning that enables them to do their part in achieving Pareto-dominant outcomes. We show that it can be rational to play payoff-dominant outcomes, given that an agent group identifies. We compare team reasoning to other theories that have been proposed to explain how people can achieve payoff-dominant outcomes, especially with respect to rationality. Some authors have hoped that it would be possible to develop an argument that it is rational to group identify. We identify some large—probably insuperable—problems with this project and sketch some more promising approaches, whereby the normativity of group identification rests on morality

Joy leads to overconfidence, and a simple countermeasure

Overconfidence has been identified as a source of suboptimal decision making in many real-life domains, with often far-reaching consequences. This study identifies a mechanism that can cause overconfidence and demonstrates a simple, effective countermeasure in an incentive-compatible experimental study. We observed that joy induced overconfidence if the reason for joy (an unexpected gift) was u

Effects of Heavy Metals and Arbuscular Mycorrhiza on the Leaf Proteome of a Selected Poplar Clone: A Time Course Analysis

Arbuscular mycorrhizal (AM) fungi establish a mutualistic symbiosis with the roots of most plant species. While receiving photosynthates, they improve the mineral nutrition of the plant and can also increase its tolerance towards some pollutants, like heavy metals. Although the fungal symbionts exclusively colonize the plant roots, some plant responses can be systemic. Therefore, in this work a clone of Populus alba L., previously selected for its tolerance to copper and zinc, was used to investigate the effects of the symbiosis with the AM fungus Glomus intraradices on the leaf protein expression. Poplar leaf samples were collected from plants maintained in a glasshouse on polluted (copper and zinc contaminated) or unpolluted soil, after four, six and sixteen months of growth. For each harvest, about 450 proteins were reproducibly separated on 2DE maps. At the first harvest the most relevant effect on protein modulation was exerted by the AM fungi, at the second one by the metals, and at the last one by both treatments. This work demonstrates how importantly the time of sampling affects the proteome responses in perennial plants. In addition, it underlines the ability of a proteomic approach, targeted on protein identification, to depict changes in a specific pattern of protein expression, while being still far from elucidating the biological function of each protein