4. Advanced Decision Making

Did Libet suggest that making a decision, in the context of free will, arises endogenously or exogenously?

It arises endogenously, not in direct response to an external stimulus or cue.

What did Libet suggest about restrictions and making a decision?

There are no externally imposed restrictions or compulsions that directly or immediately control subjects’ initiation and performance of the act

What did Libet suggest about decision making and subjects introspective feelings?

Subjects feel introspectively that they are performing the act on their own initiative and that they are free to start or not start the act as they wish.

What are the three conditions involved in making a decision?

1. At least two possible choices

2. Expectations can be predicted about the outcomes

3. Value of outcome can be assessed

How can relative probability of events be determined?

Relative probabilities of events could be determined by calculating the number of positive outcomes divided by the total number of possible outcomes

What does the expected value represent?

• The average outcome of all possible scenarios weighted by their likelihood

• gives us an idea of what we can expect on average when taking a risk with an uncertain outcome

• derived by multiplying the probability of each possible outcome by its associated reward

What is involved in normative theories of decision making?

• concerned with optimal decision making

• normative = an evaluative standard

• e.g. based on the concept of probability and expected value (odds of rolling a dice)

• we build up concepts of probability and expected values

How does expected value have limitations and how does it relate to utility?

• biases become more obvious when risks are increased

• russian roulette and dice rolling have the same probability but we wouldn’t behave the same.

• this brings in the notion of utility which reflects the psychological rather than economic values

What’s the relationship between expected utility and economic value?

• we tend to make decisions based on expected utility rather than pure economic value

• utility and value are related, but not linearly - there is a diminishing marginal utility

What is an example illustrating diminishing marginal utility?

the utility difference between having £0 and £1000 is much larger than the utility difference between £100,000 and £101,000

What are the three things that rationality theory assumes?

Rationality theory assumes that decision makers:

• Have clear and consistent preferences,

• Use logic and reasoning, not impulse or bias,

• And make choices that maximize their utility (i.e., their satisfaction or benefit).

So, a rational decision is one that best helps you reach your goals, given what you know.

What is a framing effect?

• A cognitive bias that occurs when the way information is presented influences how we make decisions

• this can lead to different choices even when the options are the same

Does Utility Theory actually explain human behaviour?

• Normative models do not always represent real world behaviour

• e.g. people will pay to avoid risk (insurance) but will also buy lottery tickets (more than expected value)

• gamblers believe in ‘lucky streaks’ etc

What is Tversky and Khaneman’s Prospect Theory?

Predicts what people will do, not what they should do

What is reference dependence within the prospect theory?

People make decisions based on anticipated gains and losses compared to their current state

What is probability weighting within prospect theory?

probabilities are subjectively assessed, e.g. overestimate chance of winning

People don’t treat probabilities linearly. They tend to:

• Overweight small probabilities (e.g., buying lottery tickets),

• Underweight large probabilities (e.g., ignoring likely risks).

What do we see for high probability gains when we map loss aversion using the prospect theory?

risk averse

What do we see for low probability gains when we map loss aversion using the prospect theory?

Risk seeking

What do we see for low probability losses when we map loss aversion using the prospect theory?

risk averse

What do we see for high probability losses when we map loss aversion using the prospect theory?

risk seeking

What is loss aversion in prospect theory?

Losses hurt more than equivalent gains feel good.

What are heuristics?

Heuristics are cognitive shortcuts that simplify decision making, but they can also lead to biases and errors.

What is the Availability Heuristic?

• A bias towards more immediate examples that come to mind

• (Schwarz, 1991) If something can be more easily recalled it may be more relevant to you

What is the Representativeness Heuristic?

• When we’re trying to determine how likely a certain event is, we often make our decision by assessing how similar it is to an existing mental prototype.

• Focus on a stereotype or perceived generalisation of a given category

• can lead to racism or bigotry

• irregularity can be part of this category

What is the Anchoring and Adjustment Bias

• when estimating a certain value, we tend to give an initial value, then adjust it by increasing or decreasing our estimation.

• However, we often get stuck on that initial value – which is referred to as anchoring – this results in us making insufficient adjustments.

• Thus, the adjusted value is biased in favor of the initial value we have anchored to.

• Greater response to a more specific anchor

What is involved in Game Theory?

In single-person decision theory, the main task is to characterize the optimal solution. In game theory, the task is to characterize the equilibrium.

Nash Equilibrium

• at equilibrium, each player's choice is a best response to the choices of the remaining players.

• In this sense, each player's choice is the solution to an appropriately defined optimisation problem.

• Because each player is at his best response, each player is content with his/her choice.

• A set of strategies, one for each player, such that no player has an incentive to change their strategy given what the other players are doing

Game Theory in the Prisoners Dilemma

• is it optimal to confess or remain silent?

  

• Nash equilibrium is the dominant strategy

• in the both confess option; neither prisoner can gain an advantage by changing their strategy

What can we take from the Prisoner’s Dilemma?

• important as it factors in the social context to our decision making

• sometimes the optimal outcome is not the most ‘selfish’ one

• ‘iterated’ examples are arguably even more ecologically valid

• societies also generally preserve rules that encourage prosocial behaviour

What have functional neuroimaging studies of the prisoner’s dilemma game suggested?

• cooperation itself evokes activation in the nucleus accumbens

• repeated cooperation is experienced as rewarding by ppts

• activity of the neurons in the NA tends to be more associated with information about futre rewards that with the experience of current rewards

Within game theory, what can be interpreted from change from reactive to anticipatory firing in the caudate?

building of a model about the opponent, which can then be used to decide whether to trust that person

What are 2 kinds of rewards?

Primary reinforcers

• direct benefits: water, food, sex, pleasure

secondary reinforcers

• when reward can be used to gain other rewards, no value in itself

What is dopamine associated with?

• pleasure, motivation and reward prediction

• key role in addiction

What is involved in addiction?

overstimulation of opioid receptors and increased tolerance

How are mobile games designed to be highly addictive using reinforcers?

• lots of secondary reinforcers: lights, sounds, graphics

• scarcity and intermittent reinforcers

• punishments (money cost): distanced through premium currency

What are 4 ways in which mobile games foster addiction?

• instant to delayed gratification (rewards eventually become more distally time locked)

• remedies for loss aversion (e.g. ‘the candy hammer’)

• sunk cost and endowed progress

• reciprocity, envy and other social dynamics

What was found studying adolescents and loot boxes?

• links with problem gambling and motivation for purchase

findings

• problem gambling causes loot box spending

• loot box spending cause problem gambling

• both of these factors are the case