The statistics of cognitive variability: Explaining common patterns in individuals, groups and financial markets.

Psychological variability (i.e., "noise") displays interesting structure which is hidden by the common practice of averaging over trials. Interesting noise structure, termed 'stylized facts', is observed in financial markets (i.e., behaviors from many thousands of traders). Here we investigate the parallels between psychological and financial time series. In a series of three experiments (total N = 202), we successively simplified a market-based price prediction task by first removing external information, and then removing any interaction between participants. Finally, we removed any resemblance to an asset market by asking individual participants to simply reproduce temporal intervals. All three experiments reproduced the main stylized facts found in financial markets, and the robustness of the results suggests that a common cognitive-level mechanism can produce them. We identify one potential model based on mental sampling algorithms, showing how this general-purpose model might account for behavior across these very different tasks.

When rules are over-ruled: Virtual bargaining as a contractualist method of moral judgment.

Rules help guide our behavior-particularly in complex social contexts. But rules sometimes give us the "wrong" answer. How do we know when it is okay to break the rules? In this paper, we argue that we sometimes use contractualist (agreement-based) mechanisms to determine when a rule can be broken. Our model draws on a theory of social interactions - "virtual bargaining" - that assumes that actors engage in a simulated bargaining process when navigating the social world. We present experimental data which suggests that rule-breaking decisions are sometimes driven by virtual bargaining and show that these data cannot be explained by more traditional rule-based or outcome-based approaches.

Contractualist tendencies and reasoning in moral judgment and decision making.

The social-contract tradition of Hobbes, Rousseau, Kant, and Rawls has been widely influential in moral philosophy but has until recently received relatively little attention in moral psychology. For contractualist moral theories, ethics is a matter of forming, adhering to, and enforcing (hypothetical) agreements, and morality is fundamentally about acting according to what would be agreed by rational agents. A recent psychological theory, virtual bargaining, models social interactions in contractualist terms, suggesting that we often act as we would agree to do if we were to negotiate explicitly. However, whether such contractualist tendencies (a propensity to make typically contractualist choices) and forms of reasoning (agreement-based cognitive processes) play a role in moral cognition is still unclear. Drawing upon virtual bargaining, we develop two novel experimental paradigms designed to elicit incentivized decisions and moral judgments. We then test the descriptive relevance of contractualism in moral judgment and decision making in five preregistered online experiments (n = 4103; English-speaking Prolific participants). In the first task, we find evidence that many participants show contractualist tendencies: their choices are "characteristically" contractualist. In the second task, we find evidence consistent with contractualist reasoning influencing some participants' judgments and incentivized decisions. Our findings suggest that a propensity to act as prescribed by tacit agreements may be particularly important in understanding the moral psychology of fleeting social interactions and coordination problems. By complementing the rich literature on deontology and consequentialism in moral psychology, empirical approaches inspired by contractualism may prove fruitful to better understand moral cognition.

Conversational technology and reactions to withheld information.

People frequently face decisions that require making inferences about withheld information. The advent of large language models coupled with conversational technology, e.g., Alexa, Siri, Cortana, and the Google Assistant, is changing the mode in which people make these inferences. We demonstrate that conversational modes of information provision, relative to traditional digital media, result in more critical responses to withheld information, including: (1) a reduction in evaluations of a product or service for which information is withheld and (2) an increased likelihood of recalling that information was withheld. These effects are robust across multiple conversational modes: a recorded phone conversation, an unfolding chat conversation, and a conversation script. We provide further evidence that these effects hold for conversations with the Google Assistant, a prominent conversational technology. The experimental results point to participants' intuitions about why the information was withheld as the driver of the effect.

Explaining the flaws in human random generation as local sampling with momentum.

In many tasks, human behavior is far noisier than is optimal. Yet when asked to behave randomly, people are typically too predictable. We argue that these apparently contrasting observations have the same origin: the operation of a general-purpose local sampling algorithm for probabilistic inference. This account makes distinctive predictions regarding random sequence generation, not predicted by previous accounts-which suggests that randomness is produced by inhibition of habitual behavior, striving for unpredictability. We verify these predictions in two experiments: people show the same deviations from randomness when randomly generating from non-uniform or recently-learned distributions. In addition, our data show a novel signature behavior, that people's sequences have too few changes of trajectory, which argues against the specific local sampling algorithms that have been proposed in past work with other tasks. Using computational modeling, we show that local sampling where direction is maintained across trials best explains our data, which suggests it may be used in other tasks too. While local sampling has previously explained why people are unpredictable in standard cognitive tasks, here it also explains why human random sequences are not unpredictable enough.

The autocorrelated Bayesian sampler: A rational process for probability judgments, estimates, confidence intervals, choices, confidence judgments, and response times.

Normative models of decision-making that optimally transform noisy (sensory) information into categorical decisions qualitatively mismatch human behavior. Indeed, leading computational models have only achieved high empirical corroboration by adding task-specific assumptions that deviate from normative principles. In response, we offer a Bayesian approach that implicitly produces a posterior distribution of possible answers (hypotheses) in response to sensory information. But we assume that the brain has no direct access to this posterior, but can only sample hypotheses according to their posterior probabilities. Accordingly, we argue that the primary problem of normative concern in decision-making is integrating stochastic hypotheses, rather than stochastic sensory information, to make categorical decisions. This implies that human response variability arises mainly from posterior sampling rather than sensory noise. Because human hypothesis generation is serially correlated, hypothesis samples will be autocorrelated. Guided by this new problem formulation, we develop a new process, the Autocorrelated Bayesian Sampler (ABS), which grounds autocorrelated hypothesis generation in a sophisticated sampling algorithm. The ABS provides a single mechanism that qualitatively explains many empirical effects of probability judgments, estimates, confidence intervals, choice, confidence judgments, response times, and their relationships. Our analysis demonstrates the unifying power of a perspective shift in the exploration of normative models. It also exemplifies the proposal that the "Bayesian brain" operates using samples not probabilities, and that variability in human behavior may primarily reflect computational rather than sensory noise. (PsycInfo Database Record (c) 2024 APA, all rights reserved).

Where next for behavioral public policy?

Our target article distinguishes between policy approaches that seek to address societal problems through intervention at the level of the individual (adopting the "i-frame") and those that seek to change the system within which those individuals live (adopting the "s-frame"). We stress also that a long-standing tactic of corporations opposing systemic change is to promote the i-frame perspective, presumably hoping that i-frame interventions will be largely ineffective and more importantly will be seen by the public and some policy makers as a genuine alternative to systemic change. We worry that the i-frame focus of much of behavioral science has inadvertently reinforced this unhelpful focus on the individual. In this response to commentators, we identify common themes, build on the many constructive suggestions to extend our approach, and reply to concerns. We argue, along with several commentators, that a key role of behavioral public policy is to clarify how to build support for systemic reforms for which there is a broad consensus in the policy community, but which are opposed by powerful special interests.

How could we make a social robot? A virtual bargaining approach.

What is required to allow an artificial agent to engage in rich, human-like interactions with people? I argue that this will require capturing the process by which humans continually create and renegotiate 'bargains' with each other. These hidden negotiations will concern topics including who should do what in a particular interaction, which actions are allowed and which are forbidden, and the momentary conventions governing communication, including language. Such bargains are far too numerous, and social interactions too rapid, for negotiation to be conducted explicitly. Moreover, the very process of communication presupposes innumerable momentary agreements concerning the meaning of communicative signals, thus raising the threat of circularity. Thus, the improvised 'social contracts' that govern our interactions must be implicit. I draw on the recent theory of virtual bargaining, according to which social partners mentally simulate a process of negotiation, to outline how these implicit agreements can be made, and note that this viewpoint raises substantial theoretical and computational challenges. Nonetheless, I suggest that these challenges must be met if we are ever to create AI systems that can work collaboratively alongside people, rather than serving primarily as valuable special-purpose computational tools. This article is part of a discussion meeting issue 'Cognitive artificial intelligence'.

The ephemeral stories of our lives.

Johnson et al. make a persuasive case that qualitative, story-like reasoning plays a crucial role in everyday thought and decision-making. This commentary questions the cohesiveness of this type of reasoning and the representations that generate it. Perhaps narratives do not underpin, but are ephemeral products of thought, created when we need to justify our actions to ourselves and others.

A unified explanation of variability and bias in human probability judgments: How computational noise explains the mean-variance signature.

Human probability judgments are both variable and subject to systematic biases. Most probability judgment models treat variability and bias separately: a deterministic model explains the origin of bias, to which a noise process is added to generate variability. But these accounts do not explain the characteristic inverse U-shaped signature linking mean and variance in probability judgments. By contrast, models based on sampling generate the mean and variance of judgments in a unified way: the variability in the response is an inevitable consequence of basing probability judgments on a small sample of remembered or simulated instances of events. We consider two recent sampling models, in which biases are explained either by the sample accumulation being further corrupted by retrieval noise (the Probability Theory + Noise account) or as a Bayesian adjustment to the uncertainty implicit in small samples (the Bayesian sampler). While the mean predictions of these accounts closely mimic one another, they differ regarding the predicted relationship between mean and variance. We show that these models can be distinguished by a novel linear regression method that analyses this crucial mean-variance signature. First, the efficacy of the method is established using model recovery, demonstrating that it more accurately recovers parameters than complex approaches. Second, the method is applied to the mean and variance of both existing and new probability judgment data, confirming that judgments are based on a small number of samples that are adjusted by a prior, as predicted by the Bayesian sampler. (PsycInfo Database Record (c) 2023 APA, all rights reserved).

From the pragmatics of charades to the creation of language.

We agree with Heintz & Scott-Phillips that pragmatics does not supplement, but is prior to and underpins, language. Indeed, human non-linguistic communication is astonishingly rich, flexible, and subtle, as we illustrate through the game of charades, where people improvise communicative signals when linguistic channels are blocked. The route from non-linguistic charade-like communication to combinatorial language involves (1) local processes of conventionalization and grammaticalization and (2) spontaneous order arising from mutual constraints between different communicative signals.

Rationality as the end of thought.

Bermúdez convincingly argues that framing effects are ubiquitous and that this is not a sign of human irrationality, but an unavoidable feature of any intelligent system. The commentary adds that framing effects arise even in formal domains, such as chess and mathematics, which appear paradigms of rational thought. Indeed, finding and attempting to resolve clashes between different frames is a major impetus for deliberative cognition.

The computational society.

How do individual human minds create languages, legal systems, scientific theories, and technologies? From a cognitive science viewpoint, such collective phenomena may be considered a type of distributed computation in which human minds together solve computational problems beyond any individual. This viewpoint may also shift our perspective on individual minds.

The i-frame and the s-frame: How focusing on individual-level solutions has led behavioral public policy astray.

An influential line of thinking in behavioral science, to which the two authors have long subscribed, is that many of society's most pressing problems can be addressed cheaply and effectively at the level of the individual, without modifying the system in which the individual operates. We now believe this was a mistake, along with, we suspect, many colleagues in both the academic and policy communities. Results from such interventions have been disappointingly modest. But more importantly, they have guided many (though by no means all) behavioral scientists to frame policy problems in individual, not systemic, terms: To adopt what we call the "i-frame," rather than the "s-frame." The difference may be more consequential than i-frame advocates have realized, by deflecting attention and support away from s-frame policies. Indeed, highlighting the i-frame is a long-established objective of corporate opponents of concerted systemic action such as regulation and taxation. We illustrate our argument briefly for six policy problems, and in depth with the examples of climate change, obesity, retirement savings, and pollution from plastic waste. We argue that the most important way in which behavioral scientists can contribute to public policy is by employing their skills to develop and implement value-creating system-level change.

Understanding the structure of cognitive noise.

Human cognition is fundamentally noisy. While routinely regarded as a nuisance in experimental investigation, the few studies investigating properties of cognitive noise have found surprising structure. A first line of research has shown that inter-response-time distributions are heavy-tailed. That is, response times between subsequent trials usually change only a small amount, but with occasional large changes. A second, separate, line of research has found that participants' estimates and response times both exhibit long-range autocorrelations (i.e., 1/f noise). Thus, each judgment and response time not only depends on its immediate predecessor but also on many previous responses. These two lines of research use different tasks and have distinct theoretical explanations: models that account for heavy-tailed response times do not predict 1/f autocorrelations and vice versa. Here, we find that 1/f noise and heavy-tailed response distributions co-occur in both types of tasks. We also show that a statistical sampling algorithm, developed to deal with patchy environments, generates both heavy-tailed distributions and 1/f noise, suggesting that cognitive noise may be a functional adaptation to dealing with a complex world.

Perceptual and Cognitive Judgments Show Both Anchoring and Repulsion.

One of the most robust effects in cognitive psychology is anchoring, in which judgments show a bias toward previously viewed values. However, in what is essentially the same task as used in anchoring research, a perceptual illusion demonstrates the opposite effect of repulsion. Here, we united these two literatures, testing in two experiments with adults (total N = 200) whether prior comparative decisions bias cognitive and perceptual judgments in opposing directions or whether anchoring and repulsion are two domain-general biases whose co-occurrence has so far gone undetected. We found that in both perceptual and cognitive tasks, anchoring and repulsion co-occur. Further, the direction of the bias depends on the comparison value: Distant values attract judgments, whereas nearby values repulse judgments. Because none of the leading theories for either effect account for both biases, theoretical integration is needed. As a starting point, we describe one such joint theory based on sampling models of cognition.

The paradox of social interaction: Shared intentionality, we-reasoning, and virtual bargaining.

Social interaction is both ubiquitous and central to understanding human behavior. Such interactions depend, we argue, on shared intentionality: the parties must form a common understanding of an ambiguous interaction (e.g., one person giving a present to another requires that both parties appreciate that a voluntary transfer of ownership is intended). Yet how can shared intentionality arise? Many well-known accounts of social cognition, including those involving "mind-reading," typically fall into circularity and/or regress. For example, A's beliefs and behavior may depend on her prediction of B's beliefs and behavior, but B's beliefs and behavior depend in turn on her prediction of A's beliefs and behavior. One possibility is to embrace circularity and take shared intentionality as imposing consistency conditions on beliefs and behavior, but typically there are many possible solutions and no clear criteria for choosing between them. We argue that addressing these challenges requires some form of we-reasoning, but that this raises the puzzle of how the collective agent (the "we") arises from the individual agents. This puzzle can be solved by proposing that the will of the collective agent arises from a simulated process of bargaining: agents must infer what they would agree, were they able to communicate. This model explains how, and which, shared intentions are formed. We also propose that such "virtual bargaining" may be fundamental to understanding social interactions. (PsycInfo Database Record (c) 2022 APA, all rights reserved).

Instantaneous systems of communicative conventions through virtual bargaining.

People can instantaneously create novel conventions that link individual communicative signals to meanings, both in experiments and everyday communication. Yet a basic principle of natural communication is that the meaning of a signal typically contrasts with the meanings of alternative signals that were available but not chosen. That is, communicative conventions typically form a system, rather than consisting of isolated signal-meaning pairs. Accordingly, creating a novel convention linking a specific signal and meaning seems to require creating a system of conventions linking possible signals to possible meanings, of which the signal-meaning pair to be communicated is merely a sub-case. If so, people will not link signals and meanings in isolation; signal-meaning pairings will depend on alternative signals and meanings. We outline and address theoretical challenges concerning how instantaneous conventions can be formed, building on prior work on "virtual bargaining," in which people simulate the results of a process of negotiation concerning which convention, or system of conventions, to choose. Moreover, we demonstrate empirically that instantaneous systems of conventions can flexibly be created in a 'minimal' experimental paradigm. Experimental evidence from 158 people playing a novel signaling game shows that modifying both the set of signals, and the set of meanings, can indeed systematically modify the signal-meaning mappings that people may instantaneously construct. While consistent with the virtual bargaining account, accounting for these results may be challenging for some accounts of pragmatic inference.

Clarifying the relationship between coherence and accuracy in probability judgments.

Bayesian approaches presuppose that following the coherence conditions of probability theory makes probabilistic judgments more accurate. But other influential theories claim accurate judgments (with high "ecological rationality") do not need to be coherent. Empirical results support these latter theories, threatening Bayesian models of intelligence; and suggesting, moreover, that "heuristics and biases" research, which focuses on violations of coherence, is largely irrelevant. We carry out a higher-power experiment involving poker probability judgments (and a formally analogous urn task), with groups of poker novices, occasional poker players, and poker experts, finding a positive relationship between coherence and accuracy both between groups and across individuals. Both the positive relationship in our data, and past null results, are captured by a sample-based Bayesian approximation model, where a person's accuracy and coherence both increase with the number of samples drawn. Thus, we reconcile the theoretical link between accuracy and coherence with apparently negative empirical results.