Encyclopedia of Computational Neuroscience

2015 Edition
| Editors: Dieter Jaeger, Ranu Jung

Decision-Making, Bias

Reference work entry
DOI: https://doi.org/10.1007/978-1-4614-6675-8_746

Definition

Biases in decision making are identified as patterns of choice behavior that violate normative theory of choice allocation.

Detailed Description

According to the axioms frequently used in economic theory, a rational decision maker is an agent who makes consistent choices over time, and therefore exhibits stable preferences (Samuelson 1938; Friedman and Savage 1948, 1952). Importantly, the rationality assumption does not prescribe that the decision maker should always optimize her objective outcome, e.g., her monetary payoff, but it does prescribe that an individual should behave consistently, given the assumption of stable preferences. This rationality assumption has been applied to both human and animal behavior (Kacelnik 2006). However, both in the human and animal literature, numerous examples of violations of economic rationality, i.e., biases in decision making, can be found (Kalenscher and Van Wingerden 2011).

Present Bias and Time-Inconsistent Preferences

A ubiquitous...

This is a preview of subscription content, log in to check access

References

  1. Ainslie G (1974) Impulse control in pigeons. J Exp Anal Behav 21:485–489PubMedCentralPubMedGoogle Scholar
  2. Allais M (1953) Le Comportement de l’Homme Rationnel devant le Risque: Critique des Postulats et Axiomes de l’Ecole Americaine. Econometrica 21:503Google Scholar
  3. Arkes HR, Ayton P (1999) The sunk cost and concorde effects: are humans less rational than lower animals? Psychol Bull 125:591–600Google Scholar
  4. Bateson M, Kacelnik A (1996) Preferences for fixed and variable food sources: variability in amount and delay. J Exp Anal Behav 63:313–329Google Scholar
  5. Charnov EL (1976) Optimal foraging: the marginal value theorem. Theor Popul Biol 9:129–136PubMedGoogle Scholar
  6. Chen MK, Lakshminarayanan V, Santos LR (2006) How basic are behavioral biases? Evidence from capuchin monkey trading behavior. J Polit Econ 114:517–537Google Scholar
  7. De Martino B, Kumaran D, Seymour B, Dolan RJ (2006) Frames, biases, and rational decision-making in the human brain. Science 313:684–687PubMedCentralPubMedGoogle Scholar
  8. Engel C (2011) Dictator games: a meta study. Exp Econ 14:583–610Google Scholar
  9. Fehr E, Fischbacher U (2003) The nature of human altruism. Nature 425:785–791PubMedGoogle Scholar
  10. Friedman M, Savage LJ (1948) The utility analysis of choices involving risk. J Polit Econ 56:279Google Scholar
  11. Friedman M, Savage LJ (1952) The expected-utility hypothesis and the measurability of utility. J Polit Econ 60:463–474Google Scholar
  12. Green L, Fisher EB, Perlow S, Sherman L (1981) Preference reversal and self-control: choice as a function of reward amount and delay. Behav Anal Lett 1:43–51Google Scholar
  13. Green L, Fristoe N, Myerson J (1994) Temporal discounting and preference reversals in choice between delayed outcomes. Psychon Bull Rev 1:383–389PubMedGoogle Scholar
  14. Hare TA, Camerer CF, Rangel A (2009) Self-control in decision-making involves modulation of the vmPFC valuation system. Science 324:646–648PubMedGoogle Scholar
  15. Hare TA, Malmaud J, Rangel A (2011) Focusing attention on the health aspects of foods changes value signals in vmPFC and improves dietary choice. J Neurosci 31:11077–11087PubMedGoogle Scholar
  16. Hariri AR, Brown SM, Williamson DE, Flory JD, De Wit H, Manuck SB (2006) Preference for immediate over delayed rewards is associated with magnitude of ventral striatal activity. J Neurosci 26:13213–13217PubMedGoogle Scholar
  17. Hsu M, Krajbich I, Zhao C, Camerer CF (2009) Neural response to reward anticipation under risk is nonlinear in probabilities. J Neurosci 29:2231–2237PubMedGoogle Scholar
  18. Isles AR, Humby T, Wilkinson LS (2003) Measuring impulsivity in mice using a novel operant delayed reinforcement task: effects of behavioural manipulations and d-amphetamine. Psychopharmacology (Berl) 170:376–382Google Scholar
  19. Kacelnik A (2006) Meanings of rationality. In: Nudds M, Hurley S (eds) Rational animals? Oxford University Press, Oxford, pp 87–106Google Scholar
  20. Kahneman D, Tversky A (1979) Prospect theory: an analysis of decision under risk. Econometrica 47:263Google Scholar
  21. Kahneman D, Tversky A (1984) Choices, values, and frames. Am Psychol 39:341–350Google Scholar
  22. Kalenscher T, Pennartz CM (2008) Is a bird in the hand worth two in the future? The neuroeconomics of intertemporal decision-making. Prog Neurobiol 84:284–315PubMedGoogle Scholar
  23. Kalenscher T, Pennartz C (2010) Do intransitive choices reflect genuinely context-dependent preferences. In: Delgado MR, Phelps E, Robbins T (eds) Attention and performance XIII: decision making. Oxford University Press, VermontGoogle Scholar
  24. Kalenscher T, Van Wingerden M (2011) Why we should use animals to study economic decision making – a perspective. Front Neurosci 5:82PubMedCentralPubMedGoogle Scholar
  25. Kalenscher T, Güntürkün O, Calabrese P, Gehlen W, Kalt T, Diekamp B (2005) Neural correlates of a default response in a delayed go/no-go task. J Exp Anal Behav 84:521–535PubMedCentralPubMedGoogle Scholar
  26. Kalenscher T, Tobler PN, Huijbers W, Daselaar SM, Pennartz CMA (2010) Neural signatures of intransitive preferences. Front Hum Neurosci 4:49. doi:10.3389/fnhum.2010.00049Google Scholar
  27. Kogut CA (1990) Consumer search behavior and sunk costs. J Econ Behav Organ 14:381–392Google Scholar
  28. Louie K, Glimcher PW (2010) Separating value from choice: delay discounting activity in the lateral intraparietal area. J Neurosci 30:5498–5507PubMedCentralPubMedGoogle Scholar
  29. MacDonald DNH, Kagel JH, Battalio RC (1991) Animals’ choices over uncertain outcomes, further experimental results. Econ J 101:1065–1084Google Scholar
  30. Marsh B, Kacelnik A (2002) Framing effects and risky decisions in starlings. Proc Natl Acad Sci U S A 99:3352–3355PubMedCentralPubMedGoogle Scholar
  31. Mazur JE, Logue AW (1978) Choice in a “self-control” paradigm: effects of a fading procedure. J Exp Anal Behav 30:11–17PubMedCentralPubMedGoogle Scholar
  32. McClure SM, Laibson DI, Loewenstein G, Cohen JD (2004) Separate neural systems value immediate and delayed monetary rewards. Science 306:503–507PubMedGoogle Scholar
  33. McClure SM, Ericson KM, Laibson DI, Loewenstein G, Cohen JD (2007) Time discounting for primary rewards. J Neurosci 27:5796–5804PubMedGoogle Scholar
  34. Navarro AD, Fantino E (2005) The sunk cost effect in pigeons and humans. J Exp Anal Behav 83:1–13PubMedCentralPubMedGoogle Scholar
  35. Pattison KF, Zentall TR, Watanabe S (2012) Sunk cost: pigeons (Columba livia), too, show bias to complete a task rather than shift to another. J Comp Psychol 126:1–9PubMedGoogle Scholar
  36. Rachlin H, Green L (1972) Commitment, choice and self control. J Exp Anal Behav 17:15–22PubMedCentralPubMedGoogle Scholar
  37. Samuelson PA (1937) A note on measurement of utility. Rev Econ Stud 4:155–161Google Scholar
  38. Samuelson PA (1938) A note on the pure theory of consumer’s behaviour. Economica 5:61–71Google Scholar
  39. Shafir S, Reich T, Tsur E, Erev I, Lotem A (2008) Perceptual accuracy and conflicting effects of certainty on risk-taking behaviour. Nature 453:917–920PubMedGoogle Scholar
  40. Silberberg A, Roma PG, Huntsberry ME, Warren-Boulton FR, Sakagami T, Ruggiero AM, Suomi SJ (2008) On loss aversion in capuchin monkeys. J Exp Anal Behav 89:145–155PubMedCentralPubMedGoogle Scholar
  41. Stephens DW, Krebs JR (1986) Foraging theory, Monographs in behavior and ecology. University Press, PrincetonGoogle Scholar
  42. Talmi D, Hurlemann R, Patin A, Dolan RJ (2010) Framing effect following bilateral amygdala lesion. Neuropsychologia 48:1823–1827PubMedCentralPubMedGoogle Scholar
  43. Thaler R (1980) Toward a positive theory of consumer choice. J Econ Behav Organ 1:39–60Google Scholar
  44. Tom SM, Fox CR, Trepel C, Poldrack RA (2007) The neural basis of loss aversion in decision-making under risk. Science 315:515–518PubMedGoogle Scholar
  45. Tversky A (1969) Intransitivity of preferences. Psychol Rev 76:31–48Google Scholar
  46. Tversky A, Kahneman D (1992) Advances in prospect theory: cumulative representation of uncertainty. J Risk Uncertain 5:297–323Google Scholar
  47. Von Neumann J, Morgenstern O (1944) Theory of games and economic behavior. University Press, PrincetonGoogle Scholar

Copyright information

© Springer Science+Business Media New York 2015

Authors and Affiliations

  1. 1.Department of Comparative Psychology, Institute of Experimental PsychologyHeinrich-Heine University DüsseldorfDüsseldorfGermany