Does choice change preferences? An incentivized test of the mere choice effect.

Widespread evidence from psychology and neuroscience documents that previous choices unconditionally increase the later desirability of chosen objects, even if those choices were uninformative. This is problematic for economists who use choice data to estimate latent preferences, demand functions, and social welfare. The evidence on this mere choice effect, however, exhibits serious shortcomings which prevent evaluating its possible relevance for economics. In this paper, we present a novel, parsimonious experimental design to test for the economic validity of the mere choice effect addressing these shortcomings. Our design uses well-defined, monetary lotteries, all decisions are incentivized, and we effectively randomize participants' initial choices without relying on deception. Results from a large, pre-registered online experiment find no support for the mere choice effect. Our results challenge conventional wisdom outside economics. The mere choice effect does not seem to be a concern for economics, at least in the domain of decision making under risk. Supplementary Information: The online version contains supplementary material available at 10.1007/s10683-021-09728-5.

Ethical allocation of scarce vaccine doses: The Priority-Equality protocol.

Background: Whenever vaccines for a new pandemic or widespread epidemic are developed, demand greatly exceeds the available supply of vaccine doses in the crucial, initial phases of vaccination. Rationing protocols must then fulfill a number of ethical principles balancing equal treatment of individuals and prioritization of at-risk and instrumental subpopulations. For COVID-19, actual rationing methods used a territory-based first allocation stage based on proportionality to population size, followed by locally-implemented prioritization rules. The results of this procedure have been argued to be ethically problematic. Methods: We use a formal-analytical approach arising from the mathematical social sciences which allows to investigate whether any allocation methods (known or unknown) fulfill a combination of (ethical) desiderata and, if so, how they are formulated algorithmically. Results: Strikingly, we find that there exists one and only one method that allows to treat people equally while giving priority to those who are worse off. We identify this method down to the algorithmic level and show that it is easily implementable and it exhibits additional, desirable properties. In contrast, we show that the procedures used during the COVID-19 pandemic violate both principles. Conclusions: Our research delivers an actual algorithm that is readily applicable and improves upon previous ones. Since our axiomatic approach shows that any other algorithm would either fail to treat people equally or fail to prioritize those who are worse off, we conclude that ethical principles dictate the adoption of this algorithm as a standard for the COVID-19 or any other comparable vaccination campaigns.

Generous with individuals and selfish to the masses.

The seemingly rampant economic selfishness suggested by many recent corporate scandals is at odds with empirical results from behavioural economics, which demonstrate high levels of prosocial behaviour in bilateral interactions and low levels of dishonest behaviour. We design an experimental setting, the 'Big Robber' game, where a 'robber' can obtain a large personal gain by appropriating the earnings of a large group of 'victims'. In a large laboratory experiment (N = 640), more than half of all robbers took as much as possible and almost nobody declined to rob. However, the same participants simultaneously displayed standard, predominantly prosocial behaviour in Dictator, Ultimatum and Trust games. Thus, we provide direct empirical evidence showing that individual selfishness in high-impact decisions affecting a large group is compatible with prosociality in bilateral low-stakes interactions. That is, human beings can simultaneously be generous with others and selfish with large groups.

The Role of Payoff Valence on Voting: Egalitarian for Gains and Selfish for Losses.

We study how payoff valence affects voting behavior on the distribution of monetary outcomes framed as gains or losses in a group when using standard plurality voting (PV) procedures and when using approval voting (AV). The latter method allows the subjects to approve of as many alternatives as they wish and has been shown to eliminate the incentives to vote strategically. For both methods, we observe that voters express higher support for egalitarian allocations (and lower support for selfish options) when sharing gains than when sharing losses. Moreover, the average number of approved alternatives per ballot is higher when distributions are framed in terms of gains than when they are framed in terms of losses. We also discuss under which circumstances the shift in voting behavior is more likely to produce changes in the electoral outcome. The results suggest that framing manipulations (payoff valence) can significantly impact voting behavior.

Conditional valuation for combinations of goods in primates.

Valuing goods and selecting the one with the highest value forms the basis of adaptive behaviour across species. While it is obvious that the valuation of a given type of goods depends on ownership and availability of that type of goods, the effects of other goods on valuation of the original good are sometimes underappreciated. Yet, goods interact with each other, indicating that the valuation of a given good is conditional on the other goods it is combined with, both in the wild and the laboratory. Here, we introduce conditional valuation in the context of valuing multiple goods and briefly review how human and animal experimentalists can leverage economic tools for the study of interactions among goods. We then review evidence for conditional valuation for combined foods in both human and non-human primates. In the laboratory, non-human primates show increased valuation of certain combinations of foods but decreased valuation of other types of combinations. Thus, similarly to humans, monkeys appear to value combinations of goods in a conditional fashion. Additionally, both humans and monkeys appear to employ similar neural substrates for the valuation of single goods, such as the orbitofrontal cortex. Together, investigations of our evolutionary precursors may provide insights on how we value interacting goods. This article is part of the theme issue 'Existence and prevalence of economic behaviours among non-human primates'.

Trust Games and Beyond.

Trust is fundamental for the stability of human society. A large part of the experimental literature relies on the Trust Game as the workhorse to measure individual differences in trust and trustworthiness. In this review we highlight the difficulties and limitations of this popular paradigm, as well as the relations to alternative instruments ranging from survey measures to neurochemical manipulations and neuroimaging.

True to which self? Lay rationalism and decision satisfaction in self-control conflicts.

Are people more satisfied with decisions to resist or to indulge temptation? We propose that the effect of restraint versus indulgence on decision satisfaction depends on individual differences in lay rationalism, that is, reliance on reason versus feelings to guide decisions. Across 2 pilot studies and 9 main studies (N = 3,264) with different methodologies and various self-control domains, we found consistent evidence that individuals experience higher satisfaction with restraint the more they rely on reason than on feelings. The proposed effect uniquely concerns individual differences in lay rationalism and is independent from individual differences in trait self-control. We also show that authenticity (feeling true to oneself) is the mechanism underlying this effect and rule out self-typicality (acting in ways typical of oneself) as an alternative account. Additionally, we examined downstream consequences of this effect for compensatory authenticity seeking. These findings advance a more nuanced view of self-control based on identity and suggest that the subjective utility of restraint is contingent upon individual differences in reliance on reason versus feelings in decision making. Our research contributes to the understudied topic of the phenomenology of self-control and provides novel insights into its potential downsides for some individuals. We discuss theoretical implications for research on self-control, lay rationalism and authenticity. (PsycINFO Database Record (c) 2019 APA, all rights reserved).

Cognitive Reflection, Decision Biases, and Response Times.

We present novel evidence on response times and personality traits in standard questions from the decision-making literature where responses are relatively slow (medians around half a minute or above). To this end, we measured response times in a number of incentivized, framed items (decisions from description) including the Cognitive Reflection Test, two additional questions following the same logic, and a number of classic questions used to study decision biases in probability judgments (base-rate neglect, the conjunction fallacy, and the ratio bias). All questions create a conflict between an intuitive process and more deliberative thinking. For each item, we then created a non-conflict version by either making the intuitive impulse correct (resulting in an alignment question), shutting it down (creating a neutral question), or making it dominant (creating a heuristic question). For CRT questions, the differences in response times are as predicted by dual-process theories, with alignment and heuristic variants leading to faster responses and neutral questions to slower responses than the original, conflict questions. For decision biases (where responses are slower), evidence is mixed. To explore the possible influence of personality factors on both choices and response times, we used standard personality scales including the Rational-Experiential Inventory and the Big Five, and used them as controls in regression analysis.

Inertia and Decision Making.

Decision inertia is the tendency to repeat previous choices independently of the outcome, which can give rise to perseveration in suboptimal choices. We investigate this tendency in probability-updating tasks. Study 1 shows that, whenever decision inertia conflicts with normatively optimal behavior (Bayesian updating), error rates are larger and decisions are slower. This is consistent with a dual-process view of decision inertia as an automatic process conflicting with a more rational, controlled one. We find evidence of decision inertia in both required and autonomous decisions, but the effect of inertia is more clear in the latter. Study 2 considers more complex decision situations where further conflict arises due to reinforcement processes. We find the same effects of decision inertia when reinforcement is aligned with Bayesian updating, but if the two latter processes conflict, the effects are limited to autonomous choices. Additionally, both studies show that the tendency to rely on decision inertia is positively associated with preference for consistency.

Higher incentives can impair performance: neural evidence on reinforcement and rationality.

Standard economic thinking postulates that increased monetary incentives should increase performance. Human decision makers, however, frequently focus on past performance, a form of reinforcement learning occasionally at odds with rational decision making. We used an incentivized belief-updating task from economics to investigate this conflict through measurements of neural correlates of reward processing. We found that higher incentives fail to improve performance when immediate feedback on decision outcomes is provided. Subsequent analysis of the feedback-related negativity, an early event-related potential following feedback, revealed the mechanism behind this paradoxical effect. As incentives increase, the win/lose feedback becomes more prominent, leading to an increased reliance on reinforcement and more errors. This mechanism is relevant for economic decision making and the debate on performance-based payment.

The neural basis of belief updating and rational decision making.

Rational decision making under uncertainty requires forming beliefs that integrate prior and new information through Bayes' rule. Human decision makers typically deviate from Bayesian updating by either overweighting the prior (conservatism) or overweighting new information (e.g. the representativeness heuristic). We investigated these deviations through measurements of electrocortical activity in the human brain during incentivized probability-updating tasks and found evidence of extremely early commitment to boundedly rational heuristics. Participants who overweight new information display a lower sensibility to conflict detection, captured by an event-related potential (the N2) observed around 260 ms after the presentation of new information. Conservative decision makers (who overweight prior probabilities) make up their mind before new information is presented, as indicated by the lateralized readiness potential in the brain. That is, they do not inhibit the processing of new information but rather immediately rely on the prior for making a decision.