The origins and function of the reference point in risky group decision making the case of the Cuban missile crisis

This case study explores reference level effects on group decision making during the Cuban missile crisis of 1962. The group is composed of American President John F. Kennedy and his advisers. The results are consistent with much experimental evidence showing that reference levels play an important role in determining preferences. The results also extend the notion of reference-dependent risky choice to the group level, where the group consists of seasoned experts who each have a different role to play within the group and who are dealing with an issue of great importance.     

Utility maximization and melioration: Internalities in individual choice

How do people go about choosing between alternatives in relatively simple settings? This study explores some of the variables that past work suggests may be relevant. Volunteer subjects worked for money in six procedures in which the probability of a payment from either of two alternatives was 1.0, but the rate of pay (i.e. the speed with which a payment was delivered or the size of the payment) interacted with the subjects recent allocation of choices, which we define as the ‘internalities’. Because of the internalities, choosing the currently more profitable alternative did not maximize total earnings. Subjects were more likely to fail to maximize when the interaction between present pay and past choices was spread over longer sequences of choices, or when the reward variable was the speed, rather than the value, of each payment. Subjects often disregarded the internalities and were instead guided by the current yields of the two alternatives, which is a frequently observed tendency, called ‘melioration’, in experiments on choices by animals. The tendency toward melioration was only partially counteracted by explicit instructions on how to maximize earnings. We discuss a theoretical framework for melioration that postulates both motivational and cognitive sources.     

Negative-based prominence: the role of negative features in matching and choice

Previous research related to the prominence effect (e.g., Tversky, Sattath, & Slovic, 1988) has mainly focused on the causes and boundary conditions of the effect. This article investigates the determinants of prominence and explores a negative-based prominence effect in which the negative attribute becomes the prominent one. Using a matching-choice procedure, Experiments 1 and 2 show that the negative dimension became the prominent one under two different cover stories, suggesting that the negative feature looms larger in choice than in matching. The robustness of negative-based prominence was further demonstrated in a direct choice task without matching (Experiment 3) and was shown to be resistant to the impact of added positive features (Experiment 4). Finally, Experiments 5 and 6 distinguish between two determinants of prominence: intrinsic prominence caused by attribute importance and negative-based prominence caused by negative attribute values. By lowering the values on the positive dimension and enhancing the values on the negative dimension, one can reverse the prominence effect. The results suggest that, compared to a matching task, choice leads to enhanced sensitivity to negative features. The relations between negative characteristics of an attribute and other factors that determine prominence are discussed in the final section.     

The response dynamics of preferential choice

The ubiquity of psychological process models requires an increased degree of sophistication in the methods and metrics that we use to evaluate them. We contribute to this venture by capitalizing on recent work in cognitive science analyzing response dynamics, which shows that the bearing information processing dynamics have on intended action is also revealed in the motor system. This decidedly “embodied” view suggests that researchers are missing out on potential dependent variables with which to evaluate their models—those associated with the motor response that produces a choice. The current work develops a method for collecting and analyzing such data in the domain of decision making. We first validate this method using widely normed stimuli from the International Affective Picture System (Experiment 1), and demonstrate that curvature in response trajectories provides a metric of the competition between choice options. We next extend the method to risky decision making (Experiment 2) and develop predictions for three popular classes of process model. The data provided by response dynamics demonstrate that choices contrary to the maxim of risk seeking in losses and risk aversion in gains may be the product of at least one “online” preference reversal, and can thus begin to discriminate amongst the candidate models. Finally, we incorporate attentional data collected via eye-tracking (Experiment 3) to develop a formal computational model of joint information sampling and preference accumulation. In sum, we validate response dynamics for use in preferential choice tasks and demonstrate the unique conclusions afforded by response dynamics over and above traditional methods.     

Attention in risky choice

Previous research on the processes involved in risky decisions has rarely linked process data to choice directly. We used a simple measure based on the relative amount of attentional deployment to different components (gains/losses and their probabilities) of a risky gamble during the choice process, and we related this measure to the actual choice. In an experiment we recorded the decisions, decision times, and eye movements of 80 participants who made decisions on 11 choice problems. We used the number of eye fixations and fixation transitions to trace the deployment of attention during the choice process and obtained the following main results. First, different components of a gamble attracted different amounts of attention depending on participants' actual choice. This was reflected in both the number of fixations and the fixation transitions. Second, the last-fixated gamble but not the last-fixated reason predicted participants' choices. Third, a comparison of data obtained with eye tracking and data obtained with verbal protocols from a previous study showed a large degree of convergence regarding the process of risky choice. Together these findings tend to support dimensional decision strategies such as the priority heuristic.     

On the importance of distinguishing between within- and between-subject effects in intransitive intertemporal choice

Most probabilistic paired comparison models treat inconsistent choices as caused by independent and random errors in the pairwise judgments. In this paper, we argue that this assumption is too restrictive for the analysis of paired comparison data obtained from multiple judges when transitivity violations are systematic. We present a new framework that contains the random error assumption as a special case but also allows for systematic changes in an option's utility assessments over the pairwise comparisons. Accounting for both between- and within-judge sources of variability, we demonstrate in an application on intertemporal choice that the proposed framework can capture systematic transitivity violations as well as individual taste differences.     

Value-based choice: An integrative,neuroscience-informed model of health goals

Objective: Traditional models of health behaviour focus on the roles of cognitive, personality and social-cognitive constructs (e.g. executive function, grit, self-efficacy), and give less attention to the process by which these constructs interact in the moment that a health-relevant choice is made. Health psychology needs a process-focused account of how various factors are integrated to produce the decisions that determine health behaviour.

Design: I present an integrative value-based choice model of health behaviour, which characterises the mechanism by which a variety of factors come together to determine behaviour. This model imports knowledge from research on behavioural economics and neuroscience about how choices are made to the study of health behaviour, and uses that knowledge to generate novel predictions about how to change health behaviour. I describe anomalies in value-based choice that can be exploited for health promotion, and review neuroimaging evidence about the involvement of midline dopamine structures in tracking and integrating value-related information during choice. I highlight how this knowledge can bring insights to health psychology using illustrative case of healthy eating.

Conclusion: Value-based choice is a viable model for health behaviour and opens new avenues for mechanism-focused intervention.     

Shopping destination choice in Tehran: An integrated choice and latent variable approach

Integrated choice and latent variable (ICLV) models are increasingly considered in many fields as a means to gain a deeper understanding into the decision process of individuals as well as to potentially improve predictive ability. Literature has shown that the application of ICLV in context of shopping destination choice has not been conducted yet. This study uses data collected from the city of Tehran, Iran on shopping destination choice of 812 individuals. Then these attitudinal questions are used for the development of latent variables regarding the attitude and lifestyle of the participants. By including one latent variable (LV) reflecting the attitudes of clothing and lifestyle’s of grocery travelers the structural model reveals a sample distribution of this LV conditional on fundamental socio-economic characteristics. The results of our latent variable model clearly confirm that personal attitude toward clothing shopping center and lifestyle indeed impact destination choice. The results show that our experiment and the expanded hybrid choice model (HCM) allow appropriately identifying and investigating the effects of mixtures of latent attitudes on the intention shopping destination choice.     

Human risky choice under temporal constraints: tests of an energy-budget model

Risk-sensitive foraging models predict that choice between fixed and variable food delays should be influenced by an organism's energy budget. To investigate whether the predictions of these models could be extended to choice in humans, risk sensitivity in 4 adults was investigated under laboratory conditions designed to model positive and negative energy budgets. Subjects chose between fixed and variable trial durations with the same mean value. An energy requirement was modeled by requiring that five trials be completed within a limited time period for points delivered at the end of the period (block of trials) to be exchanged later for money. Manipulating the duration of this time period generated positive and negative earnings budgets (or, alternatively, "time budgets"). Choices were consistent with the predictions of energy-budget models: The fixed-delay option was strongly preferred under positive earnings-budget conditions and the variable-delay option was strongly preferred under negative earnings-budget conditions. Within-block (or trial-by-trial) choices were also frequently consistent with the predictions of a dynamic optimization model, indicating that choice was simultaneously sensitive to the temporal requirements, delays associated with fixed and variable choices on the upcoming trial, cumulative delays within the block of trials, and trial position within a block.     

Probabilistic choice (models) as a result of balancing multiple goals

We conceptualize probabilistic choice as the result of the simultaneous pursuit of multiple goals in a vector optimization representation, which is reduced to a scalar optimization that implies goal balancing. The majority of prior theoretical and empirical work on such probabilistic choice is based on random utility models, the most basic of which assume that each choice option has a valuation that has a deterministic (systematic) component plus a random component determined by some specified distribution. An alternate approach to probabilistic choice has considered maximization of one quantity (e.g., utility), subject to constraints on one or more other quantities (e.g., cost). The multiple goal perspective integrates the results regarding the well-studied multinomial logit model of probabilistic choice that has been derived from each of the above approaches; extends the results to other models in the generalized extreme value (GEV) class; and relates them to recent axiomatic work on the utility of gambling.     

On the role of language in social choice theory

Axiomatic characterization results in social choice theory are usually compared either regarding the normative plausibility or regarding the logical strength of the axioms involved. Here, instead, we propose to compare axiomatizations according to the language used for expressing the axioms. In order to carry out such a comparison, we suggest a formalist approach to axiomatization results which uses a restricted formal logical language to express axioms. Axiomatic characterization results in social choice theory then turn into definability results of formal logic. The advantages of this approach include the possibility of non-axiomatizability results, a distinction between absolute and relative axiomatizations, and the possibility to ask how rich a language needs to be to express certain axioms. We argue for formal minimalism, i.e., for favoring axiomatizations in the weakest language possible.     

Preference as fulfilment of desires

We consider preferences as fulfillment of conditional desires, which can be either positive or negative, or both. We go beyond the standard multi-attributive additive utility theory in the sense that we separate the data given by the preference relation over an unstructured space from the property structure representing (conditional) attributes or desires. The model accounts for the psychologically motivated and empirically confirmed asymmetry between desire fulfillment and disappointment (loss aversion). The only restriction on the set of desires is, loosely speaking, a kind of mutual logical independence. We formulate a representation theorem characterising when a weak order (i.e. complete and transitive) preference is compatible with the logical structure of desires and has an additive representation over it. It is unique in the sense that each utility function representing the preferences has at most one such additive decomposition.     

Asymmetric preferences for road safety: Evidence from a stated choice experiment among car drivers

Recent research has proposed fitting responses from discrete choice experiments to asymmetric value functions consistent with prospect theory, taking into account respondents’ reference points in their valuation of choice attributes. Previous studies have mainly concentrated on travel time and cost attributes, while evidence regarding road safety attributes is very limited.This paper investigates the implicit utility of a road safety attribute, defined as the number of casualties per year in alternative car trip choices, when safety improves or deteriorates. Using appropriate statistical tests we are able to reject symmetric preferences for losses and gains in the level of safety and estimate a sigmoid value function that exhibits loss aversion and diminishing sensitivity. This adds an interesting psychological dimension to the preference of road safety. Possible implications of this finding for policy making are discussed.     

Unification of models for choice between delayed reinforcers.

Two models for choice between delayed reinforcers, Fantino's delay-reduction theory and Killeen's incentive theory, are reviewed. Incentive theory is amended to incorporate the effects of arousal on alternate types of behavior that might block the reinforcement of the target behavior. This amended version is shown to differ from the delay-reduction theory in a term that is an exponential in incentive theory and a difference in delay-reduction theory. A power series approximation to the exponential generates a model that is formally identical with delay-reduction theory. Correlations between delay-reduction theory and the amended incentive theory show excellent congruence over a range of experimental conditions. Although the assumptions that gave rise to delay-reduction theory and incentive theory remain different and testable, the models deriving from the theories are unlikely to be discriminable by parametric experimental tests. This congruence of the models is recognized by naming the common model the delayed reinforcement model, which is then compared with other models of choice such as Killeen and Fetterman's (1988) behavioral theory of timing, Mazur's (1984) equivalence rule, and Vaughan's (1985) melioration theory.