Good or Bad,We Want it Now: Fixed‐cost Present Bias for Gains and Losses Explains Magnitude Asymmetries in Intertemporal Choice

Intertemporal tradeoffs are ubiquitous in decision making, yet preferences for current versus future losses are rarely explored in empirical research. Whereas rational‐economic theory posits that neither outcome sign (gains vs. losses) nor outcome magnitude (small vs. large) should affect delay discount rates, both do, and moreover, they interact: in three studies, we show that whereas large gains are discounted less than small gains, large losses are discounted more than small losses. This interaction can be understood through a reconceptualization of fixed‐cost present bias, which has traditionally described a psychological preference for immediate rewards. First, our results establish present bias for losses—a psychological preference to have losses over with now. Present bias thus predicts increased discounting of future gains but decreased (or even negative) discounting of future losses. Second, because present bias preferences do not scale with the magnitude of possible gains or losses, they play a larger role, relative to other motivations for discounting, for small magnitude intertemporal decisions than for large magnitude intertemporal decisions. Present bias thus predicts less discounting of large gains than small gains but more discounting of large losses than small losses. The present research is the first to demonstrate that the effect of outcome magnitude on discount rates may be opposite for gains and losses and also the first to offer a theory (an extension of present bias) and process data to explain this interaction. The results suggest that policy efforts to encourage future‐oriented choices should frame outcomes as large gains or small losses. Copyright © 2012 John Wiley & Sons, Ltd.     

Decision Making with Uncertain Reinforcement in Children with Attention Deficit/Hyperactivity Disorder (ADHD)

Reward-related processes are impaired in children with ADHD. Whether these deficits can be ascribed to an aversion to delay or to an altered responsiveness to magnitude, frequency, valence, or the probability of rewards still needs to be explored. In the present study, children with ADHD and normal controls aged 7 to 10 years performed a simple probabilistic discounting task. They had to choose between alternatives where the magnitude of rewards was inversely related to the probability of outcomes. As a result, children with ADHD opted more frequently for less likely but larger rewards than normal controls. Shifts of the response category after positive or negative feedback, however, occurred as often in children with ADHD as in control children. In children with ADHD, the frequency of risky choices was correlated with neuropsychological measures of response time variability but unrelated to measures of inhibitory control. It is concluded that the tendency to select less likely but larger rewards possibly represents a separate facet of dysfunctional reward processing, independent of delay aversion or altered responsiveness to feedback.     

Visual impressions of force exerted by one object on another when the objects do not come into contact

Simple animations in which one object contacts another give rise to visual impressions that the former object causes the outcome for the latter, and that the former object is exerting force on the latter. How does the impression of force relate to the impression of causality? The main aim of this research was to investigate this issue using stimuli in which there is a gap between the objects at closest approach. Delay between the first object stopping and the second object starting to move had a strong effect on reported force impressions, which is consistent with findings of research on the causal impression. However, the reported force impression was little affected by either the size of the gap or the presence and features of an object in the gap, whereas the causal impression was strongly affected by both. The findings support the conclusion that the force impression and the causal impression are distinct components of the visual interpretation of the stimulus.     

Inhibiting beliefs demands attention

Research across a variety of domains has found that people fail to evaluate statistical information in an atheoretical manner. Rather, people tend to evaluate statistical information in light of their pre-existing beliefs and experiences. The locus of these biases continues to be hotly debated. In two experiments we evaluate the degree to which reasoning when relevant beliefs are readily accessible (i.e., when reasoning with Belief-Laden content) versus when relevant beliefs are not available (i.e., when reasoning with Non-Belief-Laden content) differentially demands attentional resources. In Experiment 1 we found that reasoning with scenarios that contained Belief-Laden content required fewer attentional resources than reasoning with scenarios that contained Non-Belief-Laden content, as evidenced by smaller costs on a secondary memory load task for the former than the latter. This trend was reversed in Experiment 2 when participants were instructed to ignore their beliefs when reasoning with Belief-Laden and Non-Belief-Laden scenarios. These findings provide evidence that beliefs automatically influence reasoning, and attempting to ignore them comes with an attentional cost.     

Generality of the summation effect in human causal learning

Considerable research has examined the contrasting predictions of the elemental and configural association theories proposed by Rescorla and Wagner (1972) and Pearce (1987), respectively. One simple method to distinguish between these approaches is the summation test, in which the associative strength attributed to a novel compound of two separately trained cues is examined. Under common assumptions, the configural view predicts that the strength of the compound will approximate to the average strength of its components, whereas the elemental approach predicts that the strength of the compound will be greater than the strength of either component. Different studies have produced mixed outcomes. In studies of human causal learning, Collins and Shanks (2006) suggested that the observation of summation is encouraged by training, in which different stimuli are associated with different submaximal outcomes, and by testing, in which the alternative outcomes can be scaled. The reported experiments further pursued this reasoning. In Experiment 1, summation was more substantial when the participants were trained with outcomes identified as submaximal than when trained with simple categorical (presence/absence) outcomes. Experiments 2 and 3 demonstrated that summation can also be obtained with categorical outcomes during training, if the participants are encouraged by instruction or the character of training to rate the separately trained components with submaximal ratings. The results are interpreted in terms of apparent performance constraints in evaluations of the contrasting theoretical predictions concerning summation.     

Choosing optimal causal backgrounds for causal discovery

In two experiments, we studied the strategies that people use to discover causal relationships. According to inferential approaches to causal discovery, if people attempt to discover the power of a cause, then they should naturally select the most informative and unambiguous context. For generative causes this would be a context with a low base rate of effects generated by other causes and for preventive causes a context with a high base rate. In the following experiments, we used probabilistic and/or deterministic target causes and contexts. In each experiment, participants observed several contexts in which the effect occurred with different probabilities. After this training, the participants were presented with different target causes whose causal status was unknown. In order to discover the influence of each cause, participants were allowed, on each trial, to choose the context in which the cause would be tested. As expected by inferential theories, the participants preferred to test generative causes in low base rate contexts and preventative causes in high base rate contexts. The participants, however, persisted in choosing the less informative contexts on a substantial minority of trials long after they had discovered the power of the cause. We discuss the matching law from operant conditioning as an alternative explanation of the findings.     

Positive and negative mediation as a function of whether the absent cue was previously associated with the outcome

After presenting two cues, A and B, together, later pairings of one of the cues alone with an outcome can generate changes in the associative value of the absent cue. These changes can be in the same direction as the present cue (i.e., positive mediation) or in the opposite direction to the present cue (i.e., negative mediation). We found both mediational effects in a human contingency task. In addition, we found that the direction of the change was determined by the existence of a prior association between the absent cue and the outcome. When a prior association exists, the absent cue tends to change its value in the opposite direction to the present cue, whereas when there is no prior association, the absent cue tends to change its value in the same direction as the present cue. Recent associative models (Stout & Miller, 2007 Stout, S. C. and Miller, R. R. 2007. Sometimes-competing retrieval (SOCR): A formalization of the comparator hypothesis. Psychological Review, 114: 759–783.  [Google Scholar]) can explain our results.     

Age differences in contingency judgement linked to perceptual segregation

We demonstrate large differences in judging positive and null contingencies between younger and older adults with a task commonly used to explore cue competition in both contingency and causality judgements. The one-phase blocking task uses two cues, with separate contingencies with the same outcome. The age differences persisted even when participants knew in advance which of the two contingencies to judge. The age differences disappeared, however, when the stimulus display contained markers aiding perceptual segregation. We suggest that the age differences elicited in the one-phase blocking task are linked to decrements in perceptual segregation.     

A positive patterning advantage with complex but not simple patterning: A cue constellation approach

Determinants of a positive patterning advantage (that is, an advantage for positive patterning over negative patterning) in human causal reasoning were examined in an experiment that compared simple patterning discriminations (A, B vs. AB) to complex patterning discriminations (AB, BC, AC vs. ABC). As predicted by a cue constellation analysis of complex discriminations, a positive patterning advantage was found with complex patterning but not with simple patterning discriminations. This result may explain why some recent studies have found a positive patterning advantage where earlier studies had failed to find one. The interaction of patterning complexity with the positive patterning advantage appears to pose problems for rule-based accounts of patterning. The results support the view that associative theories of human causal reasoning are more easily distinguished from rule-based approaches when applied to conditions that make simple rules difficult to identify or implement.