DOCSLIB.ORG

John Von Neumann Oskar Morgenstern

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
John Von Neumann Oskar Morgenstern Neuroeconomics: From The Failures of Expected Utility to the Neurobiology of Choice Paul Glimcher PhD Julius Silver Professor of Neural Science, Economics and Psychology Director, Institute of the Study of Decision Making New York University Blaise Pascal Genius: Expected Value Theory Expected Probability x Value = Value #1 0.5 100 50 #2 1.0 45 45 Pascal's Wager If God Exists If God Doesn't Exist (Prob 3 Value) + (Prob 3 Value) = Exp. Value Believe in God >0 3 `$++ 0 3 0 = ` Do not Believe >0 3 2` ++ $0 3 0 = 2` in God Problem: The Beggar’s Dilemma Daniel Bernoulli Genius: Expected Utility Theory Beggar’s Dilemma 4.3 3.8 Beggar’s Utility (utils) Beggar’s 0 7000 20,000 Rich Man’s Choice Beggar’s Wealth (florins) 6.0056 6.0 5.9969 Rich Man’s Utility (utils) Rich Man’s Problem: 0 losses wins Value ($) Bentham, Pareto, Samuelson 993,000 1,013,000 1,000,000 Jeremy Bentham Vilfredo Pareto Paul Samuelson The Calculus of Utility The Intrinsic Arbitrariness of Utility Ordinal Objective Utility John von Neumann Oskar Morgenstern Genius: Modern Expected Utility Theory 0 < a <1 a $ s = Expected 35til u Utility weight s.w. = prob Subjective 0 Utility (utils) 0 Probability Dollars ($) Critcal Advantages: • Precise • Compact • Normative (people Problem: make sense) Maurice Allais Maurice Allais People Do Not Obey EU all the time 0 < a <1 a $ s = Expected 35til u Utility weight s.w. = prob Subjective 0 Utility (utils) 0 XProbability Dollars ($) Critcal Questons: • How to Predict People? • Are People Dumb? • Why? Amos Tversky Danny Kahneman Prospect Theory Critcal Advantages: • Predictive Critcal Disadvantages: • Bulky • No Why Behavioral Traditional Social-Natural Science Boundary Economics vs. Psychology Behavioral Traditional The Reductive Levels Of Decision Science Samuelson Social-Natural Science Boundary Kahneman The Central Goal of Neuroeconomics (for me) was/is Interdisciplinary Fusion How Can We Combine These? decision value probability variable 3 x 0.5 = 1.5 2 x 0.8 = 1.6 ? 1 x 1 = 1.0 So What Happens When We Vary Value? Platt and Glimcher, 1999 Large Reward Expectation Small Reward Expectation 0 < a <1 a $ s = Expected 35til u Utility weight s.w. = prob Subjective 0 Utility (utils) 0 Probability Dollars ($) 0 < a <1 a $ s = Expected 35til u Utility weight s.w. = prob Subjective 0 Utility (utils) 0 Probability Dollars ($) 4 3 2 1 Percept (expers) 0 100 200 300 400 500 600 700 800 900 1000 Stimulus intensity (e.g., weight) Daniel McFadden Random Utility Theory 4 3 2 Utility 1 0 100 200 300 400 500 600 700 800 900 1000 Value Knutson, Delgado and Elliott Joe Kable Levy and Glimcher Bartra, McGuire and Kable Up to this point: –U"(x) Reservation Preferences U'(x) Based Search ? ? ε RUM Discounting Independence EWA/ Arg Max U(x) Axiom Surprise Learning ECONOMICS Log Stevens' Satisficing Numerosity Power Law Reference Point Behavioral Impulsivity AttentionAttention Stochasticity ? Self-Control Decision Choice Value π(P) RPE PSYCHOLOGY Parietal Transducer Drift Diffusion Efficient Coding Numberline Biophysics Models Hypothesis Neuronal Neuronal Dorso- Orbitofrontal Gain & Tuning Stochasticity Lateral PFC Cortex Winner- Take- Ventral Striatum Dopamine All Networks Medial PFC ? Activation NEUROSCIENCE When? –U"(x) Reservation Preferences U'(x) Based Search ? ? ε RUM Discounting Independence EWA/ Arg Max U(x) Axiom Surprise Learning ECONOMICS Log Stevens' Satisficing Numerosity Power Law Reference Point Behavioral Impulsivity AttentionAttention Stochasticity ? Self-Control Decision Choice Value π(P) RPE PSYCHOLOGY Parietal Transducer Drift Diffusion Efficient Coding Numberline Biophysics Models Hypothesis Neuronal Neuronal Dorso- Orbitofrontal Gain & Tuning Stochasticity Lateral PFC Cortex Winner- Take- Ventral Striatum Dopamine All Networks Medial PFC ? Activation NEUROSCIENCE An Image Horace Barlow An Image Horace Barlow 9 Pixels Probability Pixel is Black: Conditional on Adjacent Pixel Being Black: 0.75 9 Pixels Black = 10spikes While = 0 Spikes 90 Spikes Total 9 Pixels ? Conditional on these 8 pixels being black the ex ante probability of the center being black is ~ 1. So Why Waste Spikes Heeger Normalization Eero Simoncelli and Co. Showed That: For any given pixel to pixel correlation structure there is a set of wi’s such that the minimum number of spikes is used per bit of information wj This is a form of decorrelation These Kinds of Networks Yield Strong ‘Outside the Classical RF Effects’ Is There Evidence of Normalization in Choice-Related Circuits? SACCADE FIX OFF V = 1 CUE TARGET FIX + + V = 0.5 + 500 ms 1000 ms + + V = 2 + + 1 1:1 VRF : ΣVj + 3 2 1:1.5 + TARGET FIX 1:3 + + + 1000 ms 1:3.5 + Randomized target array presentation 0:0.5 + 0:2 + 0:2.5 + 1 1:1 + TAR 3 2 n = 62 (2 monkeys) 1:1.5 + 1:3 + 1:3.5 + Firingrate(norm) 0:0.5 + 0:2 + Time (s) FIX TARGETS 0:2.5 + CUE Comparing Models Across the Dataset Platt & Sugrue, Heeger Heeger & Glimcher Corrado & Reynolds Newsome 37 If There is Normalization, Would it Influence Choice Behavior? The Three Option Problem For Neurons: • Variance Scales with Mean • Variance is the average Squared distance from the mean Variance • Thus as means reduce, discriminablility goes down variance ~1.0-1.5 mean Neuronal Rate Tolhurst, Movshon and Dean, 1983 SACCADE Free choice trials FIX OFF CUE TARGET FIX + + + 500 ms ? 1000 ms V1: 0.156 V2: 0.130 0.143 0.156 0.169 0.182 V3: 0.026 0.104 Target reward magnitude (ml) Monkey D (6916 choices) Monkey B (9201 choices) 1.0 Small V3 Conditional choice (1) Large V3 0 -0.039 0 0.039 -0.039 0 0.039 V1-V2 (ml) Theory Humans If There is Normalization, Would it Influence Choice Behavior? The Three Option Problem The Multi-Option Problem The Curse of Choice var/mean = 1.0 p(A) p(A)/p(B) Observations Choice probability p(B) Simulated activity Additional alternatives 2 2 2 02 0 0 Divisive02 normalization + cortical variability choice-set effect 0 etc. Constructing Variable Size Choice Sets Target pairs Distracters 30 Subjects 6x45 Trials Per 8100 Trials Total Fitted Probabilities From Estimation 0.2 0.1 But How Would A Network Implement Normalization? What Would the Network Dynamics Be Like? 50 Normalization is the Unique Equilibrium State for Networks 51 of this Kind These Networks Have Specific Dynamics 52 Which Actually Are Observed 53 If a Choice Network Used These Dynamics, How Would It Choose? The ESVT “Value Function” Captures: • Reflection Effect • Probability Distortion • Loss Aversion • Endowment Effect Would It Be Normative? John von Neumann Oskar Morgenstern Modern Expected Utility Theory 0 < a <1 a $ s = Expected 35til u Utility weight s.w. = prob Subjective 0 Utility (utils) 0 Probability Dollars ($) Critcal Advantages: • Precise • Compact • Normative (people make sense) Expected Subjective Value Theory Samuelson Social-Natural Science Boundary Pavlov Stevens/Fechner Sherrington Neuroeconomics Aligning and Refining Hard Theories James S. McDonnell Foundation.
Load more

Recommended publications
  • Neuroeconomics: the Neurobiology of Decision-Making
    Neuroeconomics: The Neurobiology of Decision-Making Ifat Levy Section of Comparative Medicine Department of Neurobiology Interdepartmental Neuroscience Program Yale School of Medicine Harnessing eHealth and Behavioral Economics for HIV Prevention and Treatment April 2012 Overview • Introduction to neuroeconomics • Decision under uncertainty – Brain and behavior – Adolescent behavior – Medical decisions Overview • Introduction to neuroeconomics • Decision under uncertainty – Brain and behavior – Adolescent behavior – Medical decisions Neuroeconomics NeuroscienceNeuronal MentalPsychology states “asEconomics if” models architecture Abstraction Neuroeconomics Behavioral Economics Neuroscience Psychology Economics Abstraction Neuroscience functional MRI VISUAL STIMULUS functional MRI: Blood Oxygenation Level Dependent signals Neural Changes in oxygen Change in activity consumption, blood flow concentration of and blood volume deoxyhemoglobin Change in Signal from each measured point in space at signal each point in time t = 1 t = 2 t = 3 t = 4 t = 5 t = 6 dorsal anterior posterior lateral ventral dorsal anterior medial posterior ventral Anterior The cortex Cingulate Cortex (ACC) Medial Prefrontal Cortex (MPFC) Posterior Cingulate Cortex (PCC) Ventromedial Prefrontal Cortex (vMPFC) Orbitofrontal Cortex (OFC) Sub-cortical structures fMRI signal • Spatial resolution: ~3x3x3mm3 Low • Temporal resolution: ~1-2s Low • Number of voxels: ~150,000 High • Typical signal change: 0.2%-2% Low • Typical noise: more than the signal… High But… • Intact human
    [Show full text]
  • Volatility As Link Between Risk and Memory in Economics, Econometrics and Neuroeconomics: an Application for the Bolivian Inflation Rate 1938 - 2012
    Volatility as link between risk and memory in Economics, Econometrics and Neuroeconomics: an application for the Bolivian Inflation Rate 1938 - 2012 María Edith Chacón B. [email protected] Teacher and researcher CIDES – UMSA. La Paz, Bolivia. Ernesto Sheriff B. [email protected] Teacher and researcher CIDES – UMSA and UPB. La Paz, Bolivia. Experimental and Behavioral Economics: Other Neuroeconomics Econometrics: Time Series ABSTRACT This paper provides an indicator that measures memory as a stock. Memory affects economic decisions thus the memory indicator is useful to help in applied work, it was built according to the state of the art in Psychology and Neuroeconomics and it is presented as a time series; it is a recursive one and it is represented by an accumulated measure of the volatility. Many theories of risk have used volatility indicators to represent risk in the applied work. Risk valuation is associated to volatility and it is very sensitive to periods in which it is measured; it is very sensitive too to the type of data associated to volatility. In this paper we found that the memory affects risk valuations and the link between them is a special kind of volatility i.e. accumulated volatility with an endogenous initialization period and compatible with many Psychological hypotheses. The developed indicator is compatible with the econometrics of stationary series, integrated series and fractional integrated series. These contributions help to improve the study of hysteresis in applied economics, to develop more consistent links between memory and risk in Neuroeconomics and, to obtain more confident time series models in econometrics using the new indicator.
    [Show full text]
  • Economists As Worldly Philosophers
    Economists as Worldly Philosophers Robert J. Shiller and Virginia M. Shiller Yale University Hitotsubashi University, March 11, 2014 Virginia M. Shiller • Married, 1976 • Ph.D. Clinical Psychology, University of Delaware 1984 • Intern, Cambridge Hospital, Harvard Medical School, 1980-1 • Clinical Instructor, Yale Child Study Center, since 2000 • Private practice with children, adults, and families Robert Heilbroner 1919-2005 • His book The Worldly Philosophers: Lives, Times and Ideas of the Great Economic Thinkers, 1953, sold four million copies • Adam Smith, Henry George, Karl Marx, John Stewart Mill, John Maynard Keynes, Thomas Malthus Example: Adam Smith • Theory of Moral Sentiments, 1759 • The Wealth of Nations, 1776 • Did not shrink from moral judgments, e. g., frugality Example: John Maynard Keynes • Economic Consequences of the Peace • The General Theory of Employment, Interest and Money, 1936 Economics as a Moral Science • The kinds of questions economists are asked to opine on are inherently moral • Moral calculus requires insights into the complexities of human behavior • A plea for behavioral economics and a broader focus for economic research Kenneth Boulding 1910-1993 • “We cannot escape the proposition that as science moves from pure knowledge toward control, that is, toward creating what it knows, what it creates becomes a problem of ethical choice, and will depend upon the common values of the societies in which the scientific culture is embedded, as well as of the scientific subculture.” Boulding on the Theory that People Maximize Utility of their Own Consumption • That there is neither malevolence nor benevolence anywhere in the system is demonstrably false. • “Anything less descriptive of the human condition could hardly be imagined.” (from American Economics Association Presidential Address, 1968).
    [Show full text]
  • 2 Cognitive Load Increases Risk Aversion 5 2.1 Introduction
    Essays in Experimental and Neuroeconomics DISSERTATION zur Erlangung des akademischen Grades Dr. rer. pol. im Fach Volkswirtschaftslehre eingereicht an der Wirtschaftswissenschaftlichen Fakultät der Humboldt-Universität zu Berlin von Diplom-Volkswirt Holger Gerhardt geboren am 17. Januar 1978 in Arnsberg Präsident der Humboldt-Universität zu Berlin: Prof. Dr. Jan-Hendrik Olbertz Dekan der Wirtschaftswissenschaftlichen Fakultät: Prof. Oliver Günther, Ph. D. Gutachter: 1. Prof. Lutz Weinke, Ph. D. 2. Prof. Dr. Hauke R. Heekeren eingereicht am: 9. Mai 2011 Tag des Kolloquiums: 20. Juni 2011 Contents 1 Introduction 1 Bibliography . 3 2 Cognitive load increases risk aversion 5 2.1 Introduction . 5 2.2 Related literature . 7 2.2.1 Introductory remarks . 7 2.2.2 Overview of dual-system and “dual-self” approaches . 7 2.2.3 Subjective expected-utility theory as a unitary-process model of decision making under risk . 10 2.2.4 Dual-process approaches to decision making under risk . 11 2.2.5 Empirical evidence on dual processes in decision making under risk . 12 2.3 Experimental design . 17 2.3.1 Introduction: Advantages of our design over alternative designs . 17 2.3.2 Trial setup . 18 2.3.3 Additional measures of individual differences . 24 2.4 Results . 24 2.4.1 Introductory remarks . 24 2.4.2 Were the tasks adequate? . 25 2.4.3 How did subjects allocate attention to the two simultane- ous tasks? . 25 2.4.4 Preference reversal?—How often did subjects choose the riskier lottery? . 26 2.4.5 Structural regressions: the influence of additional cognitive load on subjects’ degree of relative risk aversion .
    [Show full text]
  • The Future of Economics in a Lakatos–Bourdieu Framework
    Munich Personal RePEc Archive The Future of Economics in a Lakatos–Bourdieu Framework. Heise, Arne University of Hamburg 2014 Online at https://mpra.ub.uni-muenchen.de/80024/ MPRA Paper No. 80024, posted 05 Jul 2017 05:42 UTC The Future of Economics in a Lakatos-Bourdieu framework Prof. Arne Heise University of Hamburg Dep. of Socioeconomics VMP 9 D-20146 Hamburg [email protected] Abstract The global financial crisis has clearly been a matter of great consternation for the busi- ness-as-usual faction of mainstream economics. Will the World Financial Crisis turn out to be that ‘experimentum crucis’ which triggered a scientific revolution? In this paper, we seek to assess the likelihood of a paradigm shift towards heterodox approaches and a more pluralist setting in economics emerging from the academic establishment in the U.S. – that is, from the dominant center of knowledge production in the economic disci- pline. This will be done by building the analysis on a combined Lakatosian framework of ‘battle of research programmes’ and a Bourdieuian framework of ‘power struggle’ within the academic field and highlighting the likelihood of two main proponents of the mainstream elite to become the promulgator of change? Keywords: Paradigm, heterodox economics, scientific revolution JEL codes: A 11, E 11, E 12 1 1. The Keynesian Revolution and Pragmatic Pluralism – A Fruitful Competition Between Theories or a Crisis in Economics? John Maynard Keynes concludes ‘The General Theory of Employment, Interest, and Money’ (1936: 383-84) with the following, now-famous words: „At the present moment people are unusually expectant of a more funda- mental diagnosis; more particularly ready to receive it; eager to try it out, if it should be even possible.
    [Show full text]
  • Foundations of Neuroeconomic Analysis, by Paul W. Glimcher Clément Levallois
    Book Review: Foundations of Neuroeconomic Analysis, by Paul W. Glimcher Clément Levallois To cite this version: Clément Levallois. Book Review: Foundations of Neuroeconomic Analysis, by Paul W. Glimcher. Journal of Economic Methodology, Taylor & Francis (Routledge), 2012. hal-01892831 HAL Id: hal-01892831 https://hal.archives-ouvertes.fr/hal-01892831 Submitted on 10 Oct 2018 HAL is a multi-disciplinary open access L’archive ouverte pluridisciplinaire HAL, est archive for the deposit and dissemination of sci- destinée au dépôt et à la diffusion de documents entific research documents, whether they are pub- scientifiques de niveau recherche, publiés ou non, lished or not. The documents may come from émanant des établissements d’enseignement et de teaching and research institutions in France or recherche français ou étrangers, des laboratoires abroad, or from public or private research centers. publics ou privés. Foundations of Neuroeconomic Analysis, by Paul W. Glimcher, New York: Oxford University Press, 2010, 467 + xix pp., $69.95 (hardback), ISBN 978-0-19-974425-1. Forthcoming in the Journal of Economic Methodology “Subjective values are real numbers ranging from 0 to 1,000. They take action potentials [bioelectrical pulses in neurons] as their natural units.” (p. 398): this exemplifies how far Paul Glimcher, a professor at NYU, wants you to follow him in his new book, Foundations of Neuroeconomic Analysis. Can he be possibly serious? Searching for the physiological substrate of subjective value is like re-opening a very cold case – almost a taboo, for several reasons. During most of the twentieth century, it was an undisputable premise that the investigation of cultural and social behaviour was the exclusive province of the social sciences and the humanities.
    [Show full text]
  • Neuroeconomics
    Handbook of Experimental Economics Editors: John Kagel and Alvin Roth Neuroeconomics Colin Camerer1 (California Institute of Technology), Jonathan Cohen2 (Princeton University), Ernst Fehr3 (University of Zurich), Paul Glimcher4 (New York University), David Laibson5 (Harvard University) 1Division HSS, Caltech, [email protected]; 2Princeton Neuroscience Institute, Princeton University, [email protected]; 3University of Zurich, Department of Economics, [email protected]; 4Center for Neural Science, New York University, [email protected]; 5Department of Economics, Harvard University, [email protected]. We gratefully acknowledge research assistance from Colin Gray and Gwen Reynolds and key guidance from John Kagel, Alvin Roth, and an anonymous referee. We also acknowledge financial support from the Moore Foundation (Camerer), the National Science Foundation (Camerer), and the National Institute of Aging (Cohen; Glimcher, R01AG033406; Laibson, P01AG005842), the Swiss National Science Foundation (Fehr, CRSII3_141965/1) and the European Research Council (Fehr, 295642). Hyperlink Page Introduction Chapter 1: Neurobiological Foundations Chapter 2: Functional MRI Chapter 3: Risky Choice Chapter 4: Intertemporal choice and self-regulation Chapter 5: The neural circuitry of social preferences Chapter 6: Strategic thinking References Introduction “One may wonder whether Adam Smith, were he working today, would not be a neuroeconomi[st]” Aldo Rustichini (2005). Neuroeconomics is the study of the biological microfoundations of economic
    [Show full text]
  • 1 Neuroeconomics of Asset-Price Bubbles
    Neuroeconomics of Asset-Price Bubbles: Toward the Prediction and Prevention of Major Bubbles John L. Haracz* Goldman School of Public Policy, UC Berkeley and Department of Psychological and Brain Sciences, Indiana University [email protected] and Daniel J. Acland Goldman School of Public Policy, UC Berkeley [email protected] Goldman School of Public Policy Working Paper January 16, 2015 Abstract Asset-price bubbles challenge the explanatory and predictive power of standard economic theory, suggesting that neuroeconomic measures should be explored as potential tools for improving the predictive power of standard theory. We begin this exploration by reviewing results from functional magnetic resonance imaging (fMRI) studies of lab asset-price bubbles and herding behavior (i.e., following others' decisions). These results are consistent with a neuroeconomics-based hypothesis of asset-price bubbles. In this view, decision making during bubble or non-bubble periods of financial- market activity is driven by, respectively, evolutionarily ancient or new neurocircuitry. Neuroimaging studies that test this or other neuroeconomics-based hypotheses of asset-price bubbles may yield a bubble-related biomarker (e.g., low trade-related lateral neocortical activity associated with traders’ herding-based decisions). Wearable functional near-infrared spectroscopy (fNIRS) technology could determine the prevalence of such a biomarker among financial-market participants, thereby enabling the real-time detection of an emerging bubble. We describe mechanisms by which this early-warning signal could be exploited in self-regulatory or government-administered policies for financial-system stabilization. In summary, neuroimaging-based financial-system regulation may be useful for distinguishing bubbles from non-bubble periods and preventing major asset-price bubbles.
    [Show full text]
  • Towards an Externalist Neuroeconomics: Dual Selves, Signs, and Choice
    Journal of Neuroscience, Psychology, and Economics © 2012 American Psychological Association 2012, Vol. 5, No. 1, 38–61 1937-321X/12/$12.00 DOI: 10.1037/a0026882 Towards an Externalist Neuroeconomics: Dual Selves, Signs, and Choice Carsten Herrmann-Pillath Frankfurt School of Finance and Management Recently, reductionist models of choice have been proposed which directly reduce a modified version of economic utility theory to neuroscience. I propose an alternative conceptual framework that adopts the position of externalism, which I further narrow down to a distributed cognition framework, and eventually to a biosemiotic model of human choice. I relate this to existing modular theories on the brain, which I generalize into a dual selves model. In this model, the internal information asymmetries and deficiencies of the brain/body system drive the reliance of choices on external cognitive mechanisms as manifested in sign systems. I analyze this interaction and apply the combined biosemiotics/dual selves model to an important set of falsifiers of an integrated reductionist model of neuroeconomics, that is, addiction and other consump- tion disorders. Keywords: foundations of neuroeconomics, semiotics, dual selves, distributed cognition, con- sumption disorders I. Externalism Versus Internalism in conscious and automatic processes, and Neuroeconomics would thus result in models which differ from the standard economic model (Camerer, 2007; One of the fundamental issues in current Camerer, Loewenstein, & Prelec, 2005). The neuroeconomic research is the question of drawback of these views is that they still lack whether the analysis of the brain should fol- a coherent and consistent theoretical frame- low the standard economic model or whether work comparable to the standard economic the introduction of an alternative framework approach in terms of its simplicity, consis- is needed.
    [Show full text]
  • Neuroeconomics: Decision Making and the Brain 81 © 2009, Elsevier Inc
    Neuroeconomics Decision Making and the Brain Edited by Paul W. Glimcher, PhD Center for Neuroeconomics New York University New York, NY, USA Colin F. Camerer, PhD Division of Humanities and Social Sciences California Institute of Technology Pasadena, CA, USA Ernst Fehr, PhD Institute for Empirical Research in Economics University of Zürich Zürich, Switzerland Russell A. Poldrack, PhD Department of Psychology University of California Los Angeles Los Angeles, CA, USA AMSTERDAM • BOSTON • HEIDELBERG • LONDON NEW YORK • OXFORD • PARIS • SAN DIEGO SAN FRANCISCO • SINGAPORE • SYDNEY • TOKYO Academic Press is an imprint of Elsevier CHAPTER 7 The Evolution of Rational and Irrational Economic Behavior: Evidence and Insight from a Non-human Primate Species Laurie R. Santos and M. Keith Chen OUTLINE Introduction 81 Do Capuchins Obey Price Theory as Humans Do? 88 Neoclassical Approaches to Non-standard Behavior 82 Do Capuchins Display the Same Biases as Humans? 88 Price-Theoretic Treatments 82 Are Capuchins Reference Dependent and Axiomatic Approaches 83 Loss Averse? 88 Behavioral Economics Approaches 84 Framing and Risk: Do Capuchins Exhibit a Reflection Effect? 89 The Role of Non-human Primate Studies in Do Capuchins Exhibit an Endowment Effect? 90 Modern Economics 84 What Comparative Work Means for Traditional Primate Evolution 101 85 Economics and Neuroeconomics 90 Acknowledgements 91 Revealing Capuchin Preferences: The Token Trading Methodology 87 References 92 INTRODUCTION Second, people are endowed with effortlessly rational, error-free cognition. This assumption may entail Modern economics as it is currently practiced is an agents simply understanding their own preferences, exercise in applying three basic principles to nearly all or it may ask that they solve arbitrarily complex sig- settings.
    [Show full text]
  • Response Times and Contributions to a Real World Public Good
    A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Lohse, Johannes; Goeschl, Timo; Diederich , Johannes Working Paper Giving is a question of time: Response times and contributions to a real world public good Discussion Paper Series, No. 566 Provided in Cooperation with: Alfred Weber Institute, Department of Economics, University of Heidelberg Suggested Citation: Lohse, Johannes; Goeschl, Timo; Diederich , Johannes (2014) : Giving is a question of time: Response times and contributions to a real world public good, Discussion Paper Series, No. 566, University of Heidelberg, Department of Economics, Heidelberg, http://dx.doi.org/10.11588/heidok.00017046 This Version is available at: http://hdl.handle.net/10419/127384 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence.
    [Show full text]
  • Foundations of Neuroeconomic Analysis</Italic>
    Journal of Economic Literature 2013, 51(4), 1155–1182 http://dx.doi.org/10.1257/jel.51.4.1155 A Review Essay about Foundations of Neuroeconomic Analysis by Paul Glimcher † Colin F. Camerer* Neuroeconomics aims to discover mechanisms of economic decision, and express them mathematically, to predict observed choice. While the contents of neuroeconomic models and evidence are obviously different than in traditional economics, (some of the) goals are identical: to explain and predict choice, the effects of comparative statics, and perhaps make interesting new welfare judgments that are defensible. To this end, Paul Glimcher’s important book carefully describes how economics, psychological, and neural levels of explanation can be linked (a structure which has been successful in visual neuroscience). As Glimcher shows, the neural evidence is quite strong for a process of learning valuations through prediction error, and a simple model of neural valuation and comparison that corresponds to random utility (though subject to normalization, which produces menu effects). There is also rapidly growing evidence for more complicated constructs in behavioral economics, including prospect theory’s account of risky choice, hyperbolic time discounting, level-k models of games, and social preferences corresponding to internal reward based on what happens to other agents. ( JEL D01, D03, Y30) 1. Introduction of economists working extra hard, and inge- niously, to infer unobservables—such as he splashy attention and criticism of beliefs, utilities, thinking costs, and more— Tneuroeconomics is a referendum on from observable choices. Other scientific dis- how curious economists are about how ciplines take an easier route by simply trying the brain makes economic decisions and to measure the unobservables directly as best whether new insights can tweak old models they can, as well as inferring unobservables or inspire new ones.
    [Show full text]