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...
References
Ainslie G (1974) Impulse control in pigeons. J Exp Anal Behav 21:485–489
Allais M (1953) Le Comportement de l’Homme Rationnel devant le Risque: Critique des Postulats et Axiomes de l’Ecole Americaine. Econometrica 21:503
Arkes HR, Ayton P (1999) The sunk cost and concorde effects: are humans less rational than lower animals? Psychol Bull 125:591–600
Bateson M, Kacelnik A (1996) Preferences for fixed and variable food sources: variability in amount and delay. J Exp Anal Behav 63:313–329
Charnov EL (1976) Optimal foraging: the marginal value theorem. Theor Popul Biol 9:129–136
Chen MK, Lakshminarayanan V, Santos LR (2006) How basic are behavioral biases? Evidence from capuchin monkey trading behavior. J Polit Econ 114:517–537
De Martino B, Kumaran D, Seymour B, Dolan RJ (2006) Frames, biases, and rational decision-making in the human brain. Science 313:684–687
Engel C (2011) Dictator games: a meta study. Exp Econ 14:583–610
Fehr E, Fischbacher U (2003) The nature of human altruism. Nature 425:785–791
Friedman M, Savage LJ (1948) The utility analysis of choices involving risk. J Polit Econ 56:279
Friedman M, Savage LJ (1952) The expected-utility hypothesis and the measurability of utility. J Polit Econ 60:463–474
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 1:43–51
Green L, Fristoe N, Myerson J (1994) Temporal discounting and preference reversals in choice between delayed outcomes. Psychon Bull Rev 1:383–389
Hare TA, Camerer CF, Rangel A (2009) Self-control in decision-making involves modulation of the vmPFC valuation system. Science 324:646–648
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 31:11077–11087
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 26:13213–13217
Hsu M, Krajbich I, Zhao C, Camerer CF (2009) Neural response to reward anticipation under risk is nonlinear in probabilities. J Neurosci 29:2231–2237
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) 170:376–382
Kacelnik A (2006) Meanings of rationality. In: Nudds M, Hurley S (eds) Rational animals? Oxford University Press, Oxford, pp 87–106
Kahneman D, Tversky A (1979) Prospect theory: an analysis of decision under risk. Econometrica 47:263
Kahneman D, Tversky A (1984) Choices, values, and frames. Am Psychol 39:341–350
Kalenscher T, Pennartz CM (2008) Is a bird in the hand worth two in the future? The neuroeconomics of intertemporal decision-making. Prog Neurobiol 84:284–315
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, Vermont
Kalenscher T, Van Wingerden M (2011) Why we should use animals to study economic decision making – a perspective. Front Neurosci 5:82
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 84:521–535
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.2010.00049
Kogut CA (1990) Consumer search behavior and sunk costs. J Econ Behav Organ 14:381–392
Louie K, Glimcher PW (2010) Separating value from choice: delay discounting activity in the lateral intraparietal area. J Neurosci 30:5498–5507
MacDonald DNH, Kagel JH, Battalio RC (1991) Animals’ choices over uncertain outcomes, further experimental results. Econ J 101:1065–1084
Marsh B, Kacelnik A (2002) Framing effects and risky decisions in starlings. Proc Natl Acad Sci U S A 99:3352–3355
Mazur JE, Logue AW (1978) Choice in a “self-control” paradigm: effects of a fading procedure. J Exp Anal Behav 30:11–17
McClure SM, Laibson DI, Loewenstein G, Cohen JD (2004) Separate neural systems value immediate and delayed monetary rewards. Science 306:503–507
McClure SM, Ericson KM, Laibson DI, Loewenstein G, Cohen JD (2007) Time discounting for primary rewards. J Neurosci 27:5796–5804
Navarro AD, Fantino E (2005) The sunk cost effect in pigeons and humans. J Exp Anal Behav 83:1–13
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 126:1–9
Rachlin H, Green L (1972) Commitment, choice and self control. J Exp Anal Behav 17:15–22
Samuelson PA (1937) A note on measurement of utility. Rev Econ Stud 4:155–161
Samuelson PA (1938) A note on the pure theory of consumer’s behaviour. Economica 5:61–71
Shafir S, Reich T, Tsur E, Erev I, Lotem A (2008) Perceptual accuracy and conflicting effects of certainty on risk-taking behaviour. Nature 453:917–920
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 89:145–155
Stephens DW, Krebs JR (1986) Foraging theory, Monographs in behavior and ecology. University Press, Princeton
Talmi D, Hurlemann R, Patin A, Dolan RJ (2010) Framing effect following bilateral amygdala lesion. Neuropsychologia 48:1823–1827
Thaler R (1980) Toward a positive theory of consumer choice. J Econ Behav Organ 1:39–60
Tom SM, Fox CR, Trepel C, Poldrack RA (2007) The neural basis of loss aversion in decision-making under risk. Science 315:515–518
Tversky A (1969) Intransitivity of preferences. Psychol Rev 76:31–48
Tversky A, Kahneman D (1992) Advances in prospect theory: cumulative representation of uncertainty. J Risk Uncertain 5:297–323
Von Neumann J, Morgenstern O (1944) Theory of games and economic behavior. University Press, Princeton
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2013 Springer Science+Business Media New York
About this entry
Cite this entry
van Wingerden, M., Kalenscher, T. (2013). Decision Making, Bias. In: Jaeger, D., Jung, R. (eds) Encyclopedia of Computational Neuroscience. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-7320-6_746-1
Download citation
DOI: https://doi.org/10.1007/978-1-4614-7320-6_746-1
Received:
Accepted:
Published:
Publisher Name: Springer, New York, NY
Online ISBN: 978-1-4614-7320-6
eBook Packages: Springer Reference Biomedicine and Life SciencesReference Module Biomedical and Life Sciences