Incomplete information and irrelevant attributes in stated-preference values for health interventions.

Violations of the assumptions of complete information [CI] and independence of irrelevant alternatives (IIA) in discrete-choice experiment (DCE) data imply sensitivity of preference estimates to the decision context and the alternatives evaluated. There is a paucity of evidence on how these two assumptions affect health-preference results and whether the usual specifications of random-parameters logit models are sufficient to address these violations. We assessed the appropriateness of these assumptions in a DCE valuating interventions to prevent long-term health problems that could be identified through whole genome sequencing. A DCE survey was administered to members of a nationally representative consumer panel to elicit their preferences for options to reduce the risk of health problems. The treatment options presented (surgery, medication, and watchful waiting) and the context for the decisions elicited (severity and likelihood of the health problem) were varied experimentally to evaluate the sensitivity of preference results to such changes. We find evidence of IIA violations as the options presented to prevent health changed. Our results also are consistent with the expectation that additional substitutes decrease the monetized value of alternatives. We also find some evidence that the decision context can moderate such effects, which constitutes a new finding.

Allocation of Residency Training Positions in Spain: Contextual Effects on Specialty Preferences.

In Spain's 'MIR' system, medical school graduates are ranked by their performance on a national exam and then sequentially choose from the available residency training positions. We took advantage of a unique survey of participants in the 2012 annual MIR cycle to analyze preferences under two different choice scenarios: the residency program actually chosen by each participant when it came her turn (the 'real') and the program that she would have chosen if all residency training programs had been available (the 'counterfactual'). Utilizing conditional logit models with random coefficients, we found significant differences in medical graduates' preferences between the two scenarios, particularly with respect to three specialty attributes: work hours/lifestyle, prestige among colleagues, and annual remuneration. In the counterfactual world, these attributes were valued preferentially by those nearer to the top, while in the real world, they were valued preferentially by graduates nearer to the bottom of the national ranking. Medical graduates' specialty preferences, which we conclude, are not intrinsically stable but depend critically on the 'rules of the game'. The MIR assignment system, by restricting choice, effectively creates an externality in which those at the bottom, who have fewer choices, want what those at the top already have. Copyright © 2016 John Wiley & Sons, Ltd.

Natural selection can favour 'irrational' behaviour.

Understanding decisions is the fundamental aim of the behavioural sciences. The theory of rational choice is based on axiomatic principles such as transitivity and independence of irrelevant alternatives (IIA). Empirical studies have demonstrated that the behaviour of humans and other animals often seems irrational; there can be a lack of transitivity in choice and seemingly irrelevant alternatives can alter decisions. These violations of transitivity and IIA undermine rational choice theory. However, we show that an individual that is maximizing its rate of food gain can exhibit failure of transitivity and IIA. We show that such violations can be caused because a current option may disappear in the near future or a better option may reappear soon. Current food options can be indicative of food availability in the near future, and this key feature can result in apparently irrational behaviour.

Optimal behaviour can violate the principle of regularity.

Understanding decisions is a fundamental aim of behavioural ecology, psychology and economics. The regularity axiom of utility theory holds that a preference between options should be maintained when other options are made available. Empirical studies have shown that animals violate regularity but this has not been understood from a theoretical perspective, such decisions have therefore been labelled as irrational. Here, I use models of state-dependent behaviour to demonstrate that choices can violate regularity even when behavioural strategies are optimal. I also show that the range of conditions over which regularity should be violated can be larger when options do not always persist into the future. Consequently, utility theory--based on axioms, including transitivity, regularity and the independence of irrelevant alternatives--is undermined, because even alternatives that are never chosen by an animal (in its current state) can be relevant to a decision.

Consistent patterns of distractor effects during decision making.

The value of a third potential option or distractor can alter the way in which decisions are made between two other options. Two hypotheses have received empirical support: that a high value distractor improves the accuracy with which decisions between two other options are made and that it impairs accuracy. Recently, however, it has been argued that neither observation is replicable. Inspired by neuroimaging data showing that high value distractors have different impacts on prefrontal and parietal regions, we designed a dual route decision-making model that mimics the neural signals of these regions. Here we show in the dual route model and empirical data that both enhancement and impairment effects are robust phenomena but predominate in different parts of the decision space defined by the options' and the distractor's values. However, beyond these constraints, both effects co-exist under similar conditions. Moreover, both effects are robust and observable in six experiments.