Unpacking buyer-seller differences in valuation from experience: A cognitive modeling approach

People often indicate a higher price for an object when they own it (i.e., as sellers) than when they do not (i.e., as buyers)—a phenomenon known as the endowment effect. We develop a cognitive modeling approach to formalize, disentangle, and compare alternative psychological accounts (e.g., loss aversion, loss attention, strategic misrepresentation) of such buyer-seller differences in pricing decisions of monetary lotteries. To also be able to test possible buyer-seller differences in memory and learning, we study pricing decisions from experience, obtained with the sampling paradigm, where people learn about a lottery’s payoff distribution from sequential sampling. We first formalize different accounts as models within three computational frameworks (reinforcement learning, instance-based learning theory, and cumulative prospect theory), and then fit the models to empirical selling and buying prices. In Study 1 (a reanalysis of published data with hypothetical decisions), models assuming buyer-seller differences in response bias (implementing a strategic-misrepresentation account) performed best; models assuming buyer-seller differences in choice sensitivity or memory (implementing a loss-attention account) generally fared worst. In a new experiment involving incentivized decisions (Study 2), models assuming buyer-seller differences in both outcome sensitivity (as proposed by a loss-aversion account) and response bias performed best. In both Study 1 and 2, the models implemented in cumulative prospect theory performed best. Model recovery studies validated our cognitive modeling approach, showing that the models can be distinguished rather well. In summary, our analysis supports a loss-aversion account of the endowment effect, but also reveals a substantial contribution of simple response bias.     

Analytische und tiefenpsychologisch fundierte Psychotherapien im Gutachterverfahren

Zusammenfassung. Ein Vergleich von 94 Erstberichten der analytischen Psychotherapie und 339 Erstberichten zur tiefenpsychologisch fundierten Psychotherapie im Rahmen der Richtlinienpsychotherapie mit Hilfe der Gutachtenkriterienliste (Rudolf et al. 2002) zeigt in beiden Verfahren sehr ?hnliche Quoten der gutachterlichen Befürwortung oder Nichtbefürwortung. Vergleichbares gilt für eine Gegenüberstellung von 61 analytischen und 147 tiefenpsychologisch fundierten Fortführungsberichten. Zweifel und Bedenken der Gutachter, die sich jedoch nicht auf die Entscheidung von Befürwortung/Nichtbefürwortung der Kostenübernahme auswirken, betreffen in der tiefenpsychologisch fundierten Psychotherapie Merkmale der prognostischen Einsch?tzung bezüglich des gew?hlten Verfahrens und der erkrankten Pers?nlichkeit sowie das Thema der Differentialindikation; bei Fortführungsberichten gelten die Zweifel der bearbeiteten Konfliktdynamik und prognostischen Einsch?tzung. Eine Ungleichbehandlung der beiden Verfahren durch die Gutachter kann aus diesen Daten nicht abgeleitet werden. In der Richtlinienpsychotherapie begründen die Therapeuten den Antrag der Patienten auf Psychotherapie durch einen ausführlichen anonymisierten Bericht über die Erkrankung der Patienten und die geplante Behandlung.

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Comparison of psychoanalytic and psychodynamic expertizes

Summary. On the basis of the criteria for expertizes (Rudof et al. 2002) we compared 94 therapy recommendations after the first assessment for psychoanalytic and 339 first recommendations for psychodynamic therapy, corresponding the psychotherapy guidelines. We found very similar proportions of approving and disapproving psychotherapy. The same result was found when comparing 61 psychoanalytic and 147 psychodynamic reports in the course of the therapies. Doubts and reservations of experts in the case of psychodynamic psychotherapy are first of all related to prognostic assessment of the chosen method and of the disturbed personality including the topic of differential indication. Expertizes about the course of therapies include first of all results about the dynamics of the conflict and prognostics. Our results do not support the opinion, that experts would make a difference along the two methods.

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Anschrift: Prof. Dr. med. G. Rudolf, Psychosomatische Universit?tsklinik, Thibautstra?e 2, 69115 Heidelberg, E-Mail: gerd_rudolf@med.uni-heidelberg.de     

On the psychology of the recognition heuristic: retrieval primacy as a key determinant of its use

The recognition heuristic is a prime example of a boundedly rational mind tool that rests on an evolved capacity, recognition, and exploits environmental structures. When originally proposed, it was conjectured that no other probabilistic cue reverses the recognition-based inference (D. G. Goldstein & G. Gigerenzer, 2002). More recent studies challenged this view and gave rise to the argument that recognition enters inferences just like any other probabilistic cue. By linking research on the heuristic with research on recognition memory, the authors argue that the retrieval of recognition information is not tantamount to the retrieval of other probabilistic cues. Specifically, the retrieval of subjective recognition precedes that of an objective probabilistic cue and occurs at little to no cognitive cost. This retrieval primacy gives rise to 2 predictions, both of which have been empirically supported: Inferences in line with the recognition heuristic (a) are made faster than inferences inconsistent with it and (b) are more prevalent under time pressure. Suspension of the heuristic, in contrast, requires additional time, and direct knowledge of the criterion variable, if available, can trigger such suspension.     

A simple cell model with dominating opponent inhibition for robust contrast detection

Ein Modell kortikaler Einfachzellen mit dominanter opponenter Inhibition zur robusten Kontrastdetektion Zusammenfassung. Im primären visuellen Pfad wird Information in zwei getrennten, komplementären Domänen repräsentiert, den on- und off-Zellen. In dieser Arbeit untersuchen wir die Interaktion von on- und off-Zellen zur Generierung der Eingabe für eine kortikale Einfachzelle. Basierend auf physiologischen Studien schlagen wir einen Mechanismus vor, bei dem eine kortikale Einfachzelle aus beiden Domänen eine Eingabe erhält, wobei die Eingabe aus dem opponenten Pfad stärker gewichtet wird. Mit diesem Mechanismus der dominanten opponenten Inhibition können Antworten von kortikalen Einfachzellen auf Hell-Dunkel-Balken simuliert werden, die im primären visuellen Kortex der Katze gemessen wurden. Bei der Verarbeitung synthetischer und natürlicher Bilder können mit dem neuen Modell schärfere Antworten und bessere Rauschunterdrückung erreicht werden. Wir geben eine stochastische Analyse der Rauschunterdrückungscharakteristika des vorgeschlagenen Mechanismus und präsentieren detaillierte numerische Simulationen mit systematischen Parametervariationen. Die Resultate zeigen, dass das Modell kortikaler Einfachzellen mit dominanter opponenter Inhibition robuster gegenüber verrauschten Eingaben wird, weitgehend unabhängig von der Stärke des Rauschens. Diese Eigenschaft ist möglicherweise der Grund für die physiologisch gemessene dominante Inhibition und für die Repräsentation von Kontrastinformation in zwei komplementären Domänen. Basierend auf diesen Ergebnissen stellen wir die Hypothese auf, dass dominante opponente Inhibition im visuellen System verwendet wird, um in verrauschten Umgebungen Kontraste robust extrahieren zu können. Summary. In the primary visual pathway, information is represented in two distinct, complementary domains, namely "on" and "off" cells. In this work we examine how on and off cells may interact to form the input to simple cell subfields. On the basis of physiological evidence, we propose a mechanism of dominating opponent inhibition, where a simple cell subfield is driven by both on and off domains, receiving more heavily weighted input from the opponent pathway. We demonstrate that the model can account for physiological data on luminance gradient reversal recorded from simple cells in cat striate cortex. Next, we use the model for the processing of synthetic and natural images, showing that sharpness of response and robustness to noise can be increased by dominating opponent inhibition. Finally, we present a stochastic analysis of the noise-suppression characteristics of the proposed mechanism accompanied by detailed simulations with systematic parameter variations. Results show that dominating opponent inhibition makes the simple cell responses more robust to noise, largely independently of the amount of noise added. This property may give a rationale for the strong inhibition measured physiologically and for the representation of contrast information in two complementary domains. On the basis of these findings, we hypothesize that the visual system uses dominating opponent inhibition in order to robustly extract features in noisy environments.     

Forecasting from ignorance: the use and usefulness of recognition in lay predictions of sports events

Whereas previous studies on how people make forecasts of sports events focused primarily on experts, we examined how laypeople do this task. In particular, we (a) tested the recognition heuristic [Goldstein, D. G., & Gigerenzer, G. (2002). Models of ecological rationality: the recognition heuristic. Psychological Review, 109, 75-90], which requires partial ignorance, against four alternative mechanisms in describing laypeople's forecasts for the European Soccer Championships 2004; (b) evaluated how well recognition predicted the outcomes of the matches compared to direct indicators of team strength (e.g., past performance, rankings); and (c) studied the less-is-more effect--the phenomenon that knowing less leads to more correct forecasts than knowing more--which can occur when the recognition heuristic is used. Two groups of participants (laypeople, experts) made forecasts for the first-round matches of the tournament. Of the five candidate mechanisms, the recognition heuristic predicted laypeople's forecasts best: when applicable, it accounted for 90% of the forecasts. The recognition heuristic correctly predicted the actual winner of the matches substantially better than chance but did not achieve the accuracy of direct indicators of team strength. The experts made more correct forecasts than the laypeople. Moreover, we found no benefit of ignorance among the group of laypeople, although the conditions for a less-is-more effect specified by Goldstein and Gigerenzer were fulfilled.     

Mindfulness-based cognitive therapy as a treatment for chronic depression: A preliminary study

This pilot study investigated the effectiveness of Mindfulness-Based Cognitive Therapy (MBCT), a treatment combining mindfulness meditation and interventions taken from cognitive therapy, in patients suffering from chronic-recurrent depression. Currently symptomatic patients with at least three previous episodes of depression and a history of suicidal ideation were randomly allocated to receive either MBCT delivered in addition to treatment-as-usual (TAU; N = 14 completers) or TAU alone (N = 14 completers). Depressive symptoms and diagnostic status were assessed before and after treatment phase. Self-reported symptoms of depression decreased from severe to mild levels in the MBCT group while there was no significant change in the TAU group. Similarly, numbers of patients meeting full criteria for depression decreased significantly more in the MBCT group than in the TAU group. Results are consistent with previous uncontrolled studies. Although based on a small sample and, therefore, limited in their generalizability, they provide further preliminary evidence that MBCT can be used to successfully reduce current symptoms in patients suffering from a protracted course of the disorder.     

Nonresponse in Employee Attitude Surveys: A Group-Level Analysis

Purpose

Given the common practice of using employee attitude surveys as a group-level intervention, this study used a group-level approach to examine the relationship between group satisfaction and group nonresponse.

Design/Methodology/Approach

Samples from four large organizations enabled job satisfaction scores to be aggregated to the work group level and correlated with group-level response rates. Additional regression analysis was conducted to control for a number of confounding variables at the group level.

Findings

Aggregate job satisfaction showed significant associations with group-level response rates across each of the samples examined. Work groups with higher aggregate job satisfaction had significantly higher response rates. Regression analyses showed that, in addition to job satisfaction, work group size, heterogeneity in tenure, and heterogeneity in gender composition all had significant effects on response rates.

Implications

Social influence processes may operate at the group level to increase homogeneity of job-relevant attitudes and similarity in survey response behavior. Future research should be designed to investigate the effects of group-level variables on nonresponse.

Originality/Value

The current study adds to the literature by demonstrating that work group variables may play an important role in explaining nonresponse in employee attitude surveys. Because the processes underlying survey response are likely to be different at different levels of analysis, the investigation of nonresponse as a group-level phenomenon creates new opportunities for research and practice.     

Analysis of individual variations in the classical horizontal-vertical illusion

In the horizontal-vertical illusion (HVI), the length of the vertical line is overestimated, whereas in the bisection illusion (BI), the horizontal bisecting line is expected to be overestimated. Here, only half of our 22 observers showed the expected BI, whereas the other half underestimated the bisecting line. Observers also differed in their judgments of the strength of the HVI: The HVI was stronger for observers showing the classical bisection effect, and weaker or absent for those underestimating the bisecting line. To account for these results, we used a linear model to individually estimate the strength of two putative factors underlying both illusions. Whereas the strength of the HVI and BI were highly correlated, the estimated factors were uncorrelated. Therefore, in two control experiments, we then measured the pure horizontal-vertical (pHVI) and bisection (pBI) illusions. A significant correlation between the estimated factors and the measured illusion variants was found. Results were robust against variations of contrast, repetitive presentations, and choice of adjusted line. Thus, the classical HVI as an additive combination of two independent factors was confirmed, but we found considerable interindividual variations in the strength of the illusions. The results stress the importance of analyzing individual data rather than taking sample means for understanding these illusions.