The Role of Culture and Meaning in Rational Choice

The Wason card selection and the Tversky &; Kahneman frame anomaly are examined in the context of a probabilistic, constructivist biological model of decision-making. Rational choice requires that decision-makers understand the meaning of the choices they confront. In fact, the determination of meaning and the process of rational choice represent two sides the same coin. Further, perception, cognition and action are ill-posed problems. To solve these problems ‘missing data’ must be supplied by the brain. This data is acquired by both ontogenetic and phylogenetic processes. These evolutionary processes facilitate the determination of meaning and as a product of that process also facilitate the construction of rationality. Two interrelated brain systems involved in this construction process are examined: an emotional system that rapidly and non-consciously assigns reward expectancy values to objects in the environment and a sensory-motor system that participates in the discovery of more general information that facilitates environment/body interactions. Jointly, these systems help a naïve agent to find ‘meaning in an unlabeled world’ and to predict the outcomes of future interactions with that world by supplying ‘background’ information, i.e., by supplying the missing data necessary for rational choice. This ‘background’ represents the imprint of the statistical structure of the world on the brain and, as such, embodies the individual’s Bayesian priors. Lack of sufficient background capacities can result in systematic judgment errors and seemingly irrational decisions. Complex culture is a key aspect of the environment that facilitates the construction of rationality, in part, by becoming internalized as background. Culture facilitates the creation of complex social constructs that contribute to cultural evolution, reduce uncertainty, and increase rationality; however, cultural evolution can get ahead of itself—potentially leading to background failure and errors in judgment and choice. Finally, it is not simply complexity or lack of hands-on experience that lead to error: an additional component that might be called semantic opacity is necessary.     

Strategic sophistication of individuals and teams. Experimental evidence

Many important decisions require strategic sophistication. We examine experimentally whether teams act more strategically than individuals. We let individuals and teams make choices in simple games, and also elicit first- and second-order beliefs. We find that teams play the Nash equilibrium strategy significantly more often, and their choices are more often a best response to stated first order beliefs. Distributional preferences make equilibrium play less likely. Using a mixture model, the estimated probability to play strategically is 62% for teams, but only 40% for individuals. A model of noisy introspection reveals that teams differ from individuals in higher order beliefs.     

关于建国以来四次强调农户自主的思考

建国５０ 年来,每当国际国内形势严峻,需要发展农村经济以应对困难局面时,就会在政策上强调农户自主经营。此文着重分析了建国以来四次强调农户自主经营的过程和特点,研究了再次循环变化的内在原因,从而提出了以巩固农户自主经营为中心,深化农村改革, 发展农村经济的政策建议。     

Two Experiments to Test a Model of Herd Behaviour

We carry out two experiments to test a model of herd behaviour based on the work of Banerjee (Quarterly Journal of Economics, CVII, 797–817, 1992). He shows that herding occurs as a result of people observing the actions of others and using this information in their own decision rule. In our experiments herding does not occur as frequently as Banerjee predicts. Contrary to his results, the subjects' behaviour appears to depend on the probabilities of receiving a signal and of this signal being correct. Furthermore, Banerjee finds that the pattern of decision making over a number of rounds of the game is volatile whereas we find that decision making is volatilewithin rounds.     

Violence against women, social learning, and deterrence

We develop a simple model of sexual and domestic violence. By assumption, the potential victim’s threat to report if she is victimized is not credible, which implies that the only sequential equilibrium involves violence. However, a realistic social learning process converges to a non-sequential equilibrium without violence from all nearby states if the expected punishment for offenders whose victims report to the police is sufficiently high. A policy to increase the sentences for sexual and domestic violence convictions could therefore substantially reduce such violence in the long run, even if it is powerless to make women’s threats to report credible.

Multiple Criteria Decision Making: A Case Study of the Columbia River Salmon Recovery Plan

A common problem faced by decision makers is choosing the best alternative from among many. Traditionally, such decisions in the public arena were made using benefit-cost analysis, which involves the conversion of all costs and benefits associated with a project into monetary terms. But public projects often have a variety of economic, ecological, social and political objectives, many of which cannot or perhaps should not be converted to monetary terms. In such projects decisions must be made based on multiple, even conflicting objectives. Multiple criteria decision making (MCDM) methods are widely used for such decisions. However, a common disadvantage among many such methods available in the literature is that they require input from a real decision maker. This paper presents the development and application of an expert system based on fuzzy set theory and IF-THEN rules. The system mimics a real decision maker. Along with two conventional MCDM methods the developed expert system was applied on a data set from the Columbia River Basin salmon recovery plan to assess its potential usefulness as a decision-making tool for natural resource projects. The results suggest that the fuzzy expert system is easy to develop and makes better decisions than the other two conventional MCDM methods used.     

Learning Direction Theory and the Winner’s Curse

We report an experiment on a decision task by Samuelson and Bazerman (1985). Subjects submit a bid for an item with an unknown value. A winners curse phenomenon arises when subjects bid too high and make losses. Learning direction theory can account for this. However, other influences on behaviour can also be identified. We introduce impulse balance theory to make quantitative predictions on the basis of learning direction theory. We also look at monotonic ladder processes. It is shown that for this kind of Markov chains the impulse balance point is connected to the mode of the stationary distribution.     

Punishment,counterpunishment and sanction enforcement in a social dilemma experiment

We present the results of an experiment that explores the sanctioning behavior of individuals who experience a social dilemma. In the game we study, players choose contribution levels to a public good and subsequently have multiple opportunities to reduce the earnings of the other members of the group. The treatments vary in terms of individuals’ opportunities to (a) avenge sanctions that have been directed toward themselves, and (b) punish others’ sanctioning behavior with respect to third parties. We find that individuals do avenge sanctions they have received, and this serves to decrease contribution levels. They also punish those who fail to sanction third parties, but the resulting increase in contributions is smaller than the decrease the avenging of sanctions induces. When there are five rounds of unrestricted sanctioning, contributions and welfare are significantly lower than when only one round of sanctioning opportunities exists, and welfare is lower than at a benchmark of zero cooperation. We thank James Andreoni, participants in seminars at Emory University, the University of Wisconsin-Madison, the University of New South Wales, the University of Sydney, Deakin University, the 2004 North American Regional Meetings of the ESA in Tucson, Arizona, USA, the 2004 IMEBE Meetings in Cordoba, Spain, and the 2005 SAET meetings in Vigo, Spain, for constructive and helpful comments. We thank Elven Priour for programming and organization of the sessions. Instructions for the experiment are available from the authors.     

A Guide to Extracting Information from Environmental Pressure Groups

This paper examines the relationship between environmental pressure groupsand environmental policy makers. Environmental pressure groups are assumedto possess valuable private information on environmental issues.Environmental pressure groups are also assumed to pursue their ownpreferences, which are only partially correlated with policy makers'preferences. A new aspect is that binding contracts with side payments arenot allowed, which accurately describes the interaction betweenenvironmental pressure groups and governments. It is shown that by choosingprobabilities of acting on environmental pressure groups' signals, adecision maker can force environmental pressure groups to reveal superiorinformation even in the absence of binding contracts.     

绿色施工的激励机制研究——基于施工企业决策的微观视角

从施工企业决策的微观视角出发,分别基于经济学和管理学的角度集中分析了施工企业是否进行绿色施工的决策,从而揭示了为何绿色施工推广存在困难,并提出了相应的激励对策,即：消除传统施工的外部不经济性,降低实施绿色施工的收益不确定性,建立绿色施工的价值标准和评价机制.     

The interactive trade decision-making research: An application case of novel hybrid MCDM model

The changing structure of international trade practices has caused reciprocal effect between the factors of politics, diplomacy, military, and technology over the past twenty years. In particular, the new burgeoning countries expect to acquire extra advantages such as technology or compensation from other parties during this interactive trade.     

Tax reform and collective family decision-making

Traditional analysis of tax reform treats market behaviour as arising out of individual utility maximisation. In this paper, behaviour is modelled as the Pareto-efficient outcome of a family decision process. Conditions for the existence of a feasible, Pareto-improving tax change are presented and contrasted with those that obtain in the individualistic case. The consequences of treating households as a single individual are also discussed.     

Thinking inside the box: A participatory, computer-assisted approach to scenario discovery

Scenarios provide a commonly used and intuitively appealing means to communicate and characterize uncertainty in many decision support applications, but can fall short of their potential especially when used in broad public debates among participants with diverse interests and values. This paper describes a new approach to participatory, computer-assisted scenario development that we call scenario discovery, which aims to address these challenges. The approach defines scenarios as a set of plausible future states of the world that represent vulnerabilities of proposed policies, that is, cases where a policy fails to meet its performance goals. Scenario discovery characterizes such sets by helping users to apply statistical or data-mining algorithms to databases of simulation-model-generated results in order to identify easy-to-interpret combinations of uncertain model input parameters that are highly predictive of these policy-relevant cases. The approach has already proved successful in several high impact policy studies. This paper systematically describes the scenario discovery concept and its implementation, presents statistical tests to evaluate the resulting scenarios, and demonstrates the approach on an example policy problem involving the efficacy of a proposed U.S. renewable energy standard. The paper also describes how scenario discovery appears to address several outstanding challenges faced when applying traditional scenario approaches in contentious public debates.     

基于利益相关者视角的重大决策社会风险评估研究

经过对三门峡水库决策和上海杨浦大桥收费决策两个案例进行分析,借鉴利益相关者理论构建重大决策相关利益群体图,认为重大决策的社会风险评估应通过对决策过程中的重要利益相关者行为进行分析来识别。通过研究发现,在决策问题的识别阶段,决策制定者和媒体容易导致决策的社会风险;拟定决策方案阶段,决策制定者和企业投资者容易导致决策社会风险;决策方案选择阶段,各利益主体的博弈容易导致决策的社会风险。     

Learning under supervision: an experimental study

In many market environments, for example in investment banking, salesforce management and others, workers and supervisors work closely as a team. Workers are paid a fixed salary and supervisors determine any raises, which are typically dependent on how well the organization does. In such scenarios, a supervisor who constantly offers suggestions can create a problem—typically a worker cannot ignore his supervisor’s advice, yet if such advice is wrong and is followed, it will only decrease firm profits. We conduct a laboratory experiment to address a question critical for such settings—does the relationship between advisor and worker interfere with the learning abilities of the worker? The answer is a resounding no. In fact, subjects who have a supervisor advising them and whose advice is costly to ignore actually learn better than those with an advisor whose advice can be ignored. An even more striking result is that advisees as well as advisors in both these conditions learn better than subjects with no advisors. Our result can be attributed to the presence of advice and has direct relevance to learning in many environments.