Neuroscience and the economics of decision making

Neuroscience and the Economics of Decision Making In the last two decades there has been a flourishing of research carried out jointly by economists, psychologists, and neuroscientists This meltdown of barriers between competences has led toward original approaches to investigate the mental and cognitive mechanisms involved in the way the economic agent col­ lects, processes, and uses information to make choices This research field involves a new kind of scientist, trained in different disciplines, familiar in man­ aging experimental data, and with the mathematical foundations of decision-­ making The ultimate goal of this research is to open the black-­box to understand the behavioral and neural processes through which humans set preferences and translate these behaviors into optimal choices This volume intends to bring forward new results and fresh insights into this matter The topics cover a broad field dealing with the mechanisms of decision-­ making, moral judgments, social preferences, and the role of emotions and learn­ ing in decision-­making The collected chapters focus on issues not only specific to neuroscience and economics but also to psychology, cognitive philosophy, sociology, and marketing science In this respect, the book deals with the inter­ disciplinary aspects of decision-­making Finally, all the contributions make direct or indirect explicit reference to experimental results, and this is probably the major trait d’union of the whole book This volume will be of great interest to students and researchers in the fields of political economy, experimental economics, and behavioral economics Alessandro Innocenti is Associate Professor of Economics of the Department of Political Economy, Finance and Development (DEPFID) at the University of Siena He is also a Researcher at the Experimental Economics Laboratory LabSi, of the Research Laboratory for Behavioral Finance (BEFINLAB) and Director of the Interuniversity Center for Experimental Economics Angela Sirigu is currently Director of Research at the CNRS Institute des Sci­ ences Cognitives in Lyon, France Routledge advances in experimental and computable economics Edited by K Vela Velupillai and Stefano Zambelli University of Trento, Italy The Economics of Search Brian and John McCall Classical Econophysics Paul Cockshott, Allin F Cottrell, Gregory John Michaelson, Ian P Wright, and Victor Yakovenko The Social Epistemology of Experimental Economics Ana Cordeiro dos Santos Computable Foundations for Economics K Vela Velupillai Neuroscience and the Economics of Decision Making Edited by Alessandro Innocenti and Angela Sirigu Other books in the series include: Economics Lab An intensive course in experimental economics Alessandra Cassar and Dan Friedman Neuroscience and the Economics of Decision Making Edited by Alessandro Innocenti and Angela Sirigu First published 2012 by Routledge Park Square, Milton Park, Abingdon, Oxon OX14 4RN Simultaneously published in the USA and Canada by Routledge 711 Third Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2012 Selection and editorial material, Alessandro Innocenti and Angela Sirigu; individual chapters, the contributors The right of Alessandro Innocenti and Angela Sirigu to be identified as the authors of the editorial material, and of the authors for their individual chapters, has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988 All rights reserved No part of this book may be reprinted or reproduced or utilized in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data A catalog record has been requested for this book ISBN: 978-0-415-67843-8 (hbk) ISBN: 978-0-203-12260-0 (ebk) Typeset in Times New Roman by Wearset Ltd, Boldon, Tyne and Wear Contents List of figures List of tables List of contributors Foreword Acknowledgements viii xi xii xv xx Part I Evidence on the neuroscientific foundations of decision-­making   Private and social counterfactual emotions: behavioural and neural effects C hiara C respi , G I U S E P P E P A N T A L E O , S tefano F C appa and N icola C anessa   The influence of social value orientation on information processing in repeated voluntary contribution mechanism games: an eye-­tracking analysis 21 S usann F iedler , A ndreas G l ö ckner , and A ndreas N icklisch   Gaze bias reveals different cognitive processes in decision-­making under uncertainty 54 P ietro P iu , F rancesco F argnoli and A lessandra R ufa Part II Emotions and morality in decision-­making 71   Moral sentiments: a behavioral economics approach 73 M arcel Z eelenberg , S eger M B reugelmans , and I lona E de H ooge vi   Contents   Neuropsychology of moral judgment and risk seeking: what in common? A new look at emotional contribution to decision-­making 86 M ichela B alconi and A ndrea T erenzi   Emotional decisions: the induction-­of-intrinsic-­desires theory 109 C hristoph L umer Part III Learning and risk attitude in decision-­making 125   From habit to addiction: a study in online gambling behavior 127 D W illiam J olley and D eborah N B lack   Gains and losses in intertemporal preferences: a behavioural study 146 V aleria F aralla , F rancesca B enuzzi , P aolo N ichelli and N icola D imitri Part IV Probability and judgment in decision-­making 163   Cognitive and affective responses to schema-­incongruent brand messages: an empirical investigation 165 G eorgios H alkias and F lora K okkinaki 10 Expert elicitation method selection process and method comparison 182 A ngela D alton , A lan B rothers , S tephen W alsh , A manda W hite , and P aul W hitney Part V Decision-­making in social interaction 195 11 Does sharing payoffs affect gender differences in accountability?  197 J ordi B randts and O rsola G arofalo Contents   vii 12 Social learning and rational choice 214 S tefano D i P iazza , L etizia V accarella , A ntonio D ell ’ A va , S imona C onti and A ntonio R izzo Index 228 Figures   1.1   1.2   2.1   2.2   2.3   2.4   2.5   2.6   2.7   2.8   2.9   2.10   2.11   2.12   2.13   2.14   3.1   3.2   3.3   3.4   3.5 A typical value function Graphical depiction of the gambling task Social value orientations chart showing classes of dominant social values Eye-­tracking system Presentation slides of the VCM game Definition of the areas of interest The overal experiment procedure Results in the value orientation circle Average contributions over time for all subjects classified by SVO Mean fixation duration Distribution of short, medium, and long fixation for all classified player types in percent Average fixation duration and social value orientation with predicted regression line Proportion of fixations on payoffs Proportion of look-­ups in self-­referring AOIs (payoff and contribution information) Proportion of look-­ups in self-­referring AOIs (payoff and contribution information) Mean pupil size as a function of player type (cooperative and individualistic) and the absolute difference between the own and the mean previous contribution of the other players The likelihood of the observed gaze conditional to the given final chosen signal The results of the Hartigan’s tests applied to group A and group B Likelihood time series fitted by two Gaussians GMM clustering The probability density functions estimated by the two-­component GMM for the two groups A and B at their specified closest centroid 23 30 32 33 34 35 36 38 39 40 41 42 43 45 58 59 61 63 64 Figures   ix   3.6 The BCs computed between the two components of the GMM   3.7 Centroids corresponding to the highest values of BC between homologue components of GMM   5.1 Representation of the double process theory   5.2 Three models of moral decision-­making   5.3 An example of moral dilemma: the trolley problem   5.4 Black highlighting of the 25 electrodes used in the 10–20 system   5.5 N200 peak amplitude recorded during the utilitarian and deontological responses to the moral dilemmas   5.6 Mean amplitude of N200 effects observed during the moral dilemmas, divided by utilitarian and deontological responses   5.7 Cortical maps of N200 effect for utilitarian and deontological responses The circle highlights the right-­frontal area where the N200 effect is greater   5.8 Reaction times detected during the moral dilemmas divided by utilitarian and deontological responses   5.9 Average of the autonomic indices observed during the moral dilemmas, divided by utilitarian and deontological subjects   5.10 Average of the autonomic indices observed during the IGT, divided by utilitarian and deontological subjects   5.11 The possible influence of emotion during moral decision-­making   7.1 Hypothesized relationships between gambling habit and addictive gambling   7.2 Full global models   7.3 PLS model for low impulsivity group   7.4 PLS model for high impulsivity group   7.5 The relationship between gambling habit and neurobiological markers   8.1 Temporal sequence of events during trials of the experimental session   8.2 Percentage of responses for gains and losses   8.3 Percentage of responses for gains and losses for proportional difference between the smaller, earlier and the larger, later outcome   8.4 Matching results and percentage of responses for matching   9.1 Adjusted and unadjusted means for Aad and Ab using prior brand affect as a covariate 10.1 Fragment of group schism Bayes net model based on Sani (2005) 10.2 Conjoint analysis expert elicitation user interface screen capture with group schism Bayes net model 11.1 Mean number of choices of the simple prospect event 11.2 Mean number of choices of simple prospect event, by gender pairings 66 66 88 93 94 97 98 99 99 99 100 101 105 131 135 135 136 137 151 152 153 154 176 191 191 202 203 222   S Di Piazza et al d­ ifferent possible actions to achieve the goal: take the candy directly or play a game to achieve it Method • • • • • Participants: 46 people between the ages of and 55 years participated in this experiment, divided in 23 pairs Apparatus: the apparatus consisted of a vessel on a table that contain eight transparent plastic balls In each ball was fixed a magnet; in two of the eight balls there were also two rewards There were two simple ‘fishing-­rods’ made with a stick (1.5 m) and a yarn with an attached magnet Design: the subjects were divided in pairs; most pairs contained subjects of the same age, but in four pairs they had different ages (from to 30 years of difference) Procedure: each couple entered the experimental room with a demonstrator In the room they found two people playing with the fishing rod to obtain the reward After 30–40 seconds of silent observation, the two players left the rod near the vessel and then left the room The demonstrator invited the subjects to take the reward and leave the room (Figure 12.5) Coding: the video-­tape of each pair was analysed by coding how they behaved, specifically, if they: • played the game; • took the candy immediately Two fishing rods (1.5 m) with two magnets Eight transparent balls with a magnet Two of eight balls contain rewards One vessel with nine balls Figure 12.4  The essential components of the experimental apparatus (a) (b) Figure 12.5 Two shots drawn from the video-recording of the participant performance (experiment 2) 224   S Di Piazza et al Results Only one pair out of 23 did not play the game and just took the candy Besides this pair there was one person belonging to a different pair who preferred to take the candy first, then play the game (df = 1, Chi-­square = 34.78; p ≤ 0.01) (Figure 12.6) This second experiment, as the first one, shows that children had a particular predisposition to create moments of shared intention towards a common goal Children try to achieve a goal by interacting with ‘others’ even when they could achieve the same result with an individual action Another confirmation of this hypothesis came from a seminal experiment of Warneken et al (2006) They proposed four collaborative activities to some monkeys and some children (18–24 months): two problem-­solving activities and two social games that require the presence of an adult female as a partner The monkeys did not show any interest in the social game, where the collaboration with the experimenter had only entertainment as its purpose, but had success in the problem-­solving activities Moreover, when the human partner stopped acting her role, the monkeys continued to try to achieve their goal alone; they did not even try to involve the partner in the activity again Tomasello et al (2005) interpret this result as affirming that the monkeys did not reach a real shared goal with the human partner Children instead enjoy themselves in the activities, both the problem-­solving and the social game; often they turn the problem-­solving activity into a game, creating new goals Furthermore, when the human partner stops interacting, the children try to involve her again in the activity, showing her the role that she ‘must’ act The results of our second experiment point in the same direction; it shows that the children have a motivation to create shared goals, regardless of achievement of an individual gain Children in some contexts tend to privilege the game No Yes 43 Total 46 Pair 23 50 45 40 35 30 25 20 15 10 Played Figure 12.6  Results (experiment 2) Took candy Social learning and rational choice   225 and the collaboration, even in the case that this implicates a postponement of the individual reward Conclusion Many economic theories can hardly address issues that they consider fundamental for properly understanding human transactions As stressed by De Vecchi (2003: 153), two very basic issues Hayek felt were fundamental to his theory of social spontaneous order were: (1) How does an individual classify other people’s actions and give them meaning in order to decide what action to take? (2) What makes it possible to coordinate the actions of many individuals who have a partial and personal knowledge of the actual circumstances in which they act? Both economics and cognitive psychology have mostly considered human interaction with the world as a private matter of a subject facing objects and people as if there was not an immediate perceivable ontological difference among them But it is important to understand: (1) that we are natural-­born dualists and relate with objects and people in very different ways; (2) that transactional relationships are not dyadic but rather triadic At a minimum, a transaction does not just involve two individuals or an individual and an object, it involves two individuals and the object of the transaction Culture as a social construct owes its existence, evolution, learnability, and usability to this intersubjective triangle (Gifford 2009) The important ability of Homo sapiens to share intentionality and to participate in the intersubjective triangle cannot be overstated This triangle, and the capacity for collective intentionality upon which it relies, not only facilitates individual transactions, it makes possible the scaling up of individual interaction into complex spontaneous orders, it makes possible the very existence of most of the components of culture – including all institutions and organizations (Searle 2005) – and, first of all, it makes possible complex human cooperation The implicit and explicit cultural knowledge that individuals share facilitates the complex social orders, which make possible the efficient decentralized use of both the public and private knowledge of individuals, including various skills, abilities and talents, production technologies and preferences The two pilot studies described above support the idea that together with an I-­rationality we should consider a we-­rationality The idea is that rationality, defined as coherence of desired ends and the use of appropriate means for attaining them, is not just a matter of individualist choice, since agents’ preferences, aims and beliefs are also jointly determined through a we-­vision of the world that spring out along the same process that allow the production of human knowledge The we-­rationality hypothesis suggests a reappraisal of trust and reciprocity; it goes in the direction of ‘a theory of trust which can make it rational to repay 226   S Di Piazza et al trust, even when this is contrary to self-­interest’ (Bruni and Sugden 2000: 26) However, introducing relationships and reciprocity while rethinking the classic model of rationality does not imply substitution of personal with altruistic concern It is more a matter of taking into account that there are more often than not situations in which people build collective aims In such situations the rationality of human activity can by understood only by taking into consideration the intentionality shared among the individuals of a given group The key issues related to the coherence of means and ends is not called into question, but trusting and rewarding the others becomes an intimate component of the collective aims For example, the Nash equilibrium in the Bach-­Stravinsky dilemma represents a formal description of such a situation even though the way in which the dilemma is presented is not psychologically sound and does not allow a proper definition of the shared intentionality process The I-­rationality model proposed by most of the economic theories seems to describe accurately non-­human primate more than human behaviour (Lakshminarayanan et al 2011) The species-­unique model of rationality of human beings seems to reflect the social nature of the human cognition: the agent’s identity turns out instrinsically relational In other words, when we analyse the subject’s behaviour, we have to consider that there are different paradigms of rationality and that some of them imply a distribution of the ‘responsibility’ of action In a sense, the action does not ‘belong’ exclusively to the agent that performs it, but to the wider social context in which human actions are constituted and take place Our results support the Vygotskian intelligence hypothesis proposed by Michael Tomasello, and in particular his statement that ‘when children internalize generalized collective conventions and norms and use them to regulate their own behavior, this provides for a new kind of social rationality’ The individual rationality that we share with our cousins, chimpanzees, in humans becomes at least associated with a ‘shared rationality of interdependence with the other’, a social rationality that does not allow us to be alone, for the good, but also for the bad References Bruni, L and Sudgen, R (2000) ‘Moral canal: trust and social capital in the work of Hume, Smith and Genovesi’, Economics and Philosophy, 16: 21–45 De Vecchi, N (2003) ‘The place of gestalt psychology in the making of Hayek’s thought’, History of Political Economy, 35: 135–162 Gergely, G., Bekkering, H and Király, I (2002) ‘Rational imitation in preverbal infants’, Nature, 415: 755 Gifford, A (2009) ‘Cultural, cognition and human action’, The Journal of Socio-­ Economics, 38: 13–24 Hastie, R and Dawes, R.M (2010) Rational Choice in an Uncertain World: The Psychology of Judgment and Decision Making, Thousand Oaks, CA: Sage Publications Horner, V and Whiten, A (2005) ‘Causal knowledge and imitation/emulation switching in chimpanzees (Pan troglodytes) and children (Homo sapiens)’, Animal Cognition, 8: 164–181 Social learning and rational choice   227 Innocenti, A (2004) ‘Paradoxes versus formalism in economics: evidence from the early years of game theory and experimental economics’, Working paper 433, Quaderni del Dipartimento di Economia Politica, Università di Siena Lakshminarayanan, V., Chen, M.K and Santos, L.R (2011) ‘The evolution of decision-­ making under risk: framing effects in monkey risk preferences’, Journal of Experimental Social Psychology, in press McGuigan, N., Whiten, A., Flynn, E.F and Horner, V (2007) ‘Imitation of causally necessary versus unnecessary tool use by 3- and 5-year-­old children’, Cognitive Development, 22: 356–364 Schwier, C., van Maanen, C., Carpenter, M and Tomasello, M (2006) ‘Rational imitation in 12-month-­old infants’, Infancy, 10: 303–311 Searle, J (2005) ‘What is an institution?’, Journal of Institutional Economics, 1: 1–22 Tomasello, M (1999) The Cultural Origins of Human Cognition, Cambridge, MA: Harvard University Press Tomasello, M., Carpenter, M., Call, J., Behne, T and Moll, H (2005) ‘Understanding and sharing intentions: the origins of cultural cognition’, Behavioral and Brain Sciences, 28: 675–691 Vygotsky, L (1978) ‘Problems of method’, in M Cole (ed.), Mind in Society, Cambridge, MA: Harvard University Press Warneken, F., Chen, F and Tomasello, M (2006) ‘Cooperative activities in young children and chimpanzees’, Child Development, 77: 640–663 Whiten, A (2000) ‘Primate culture and social learning’, Cognitive Science, 24: 477–508 Williamson, O.E (1996) The Mechanisms of Governance, Oxford: Oxford University Press Index Page numbers in bold denote tables, those in italics denote figures accountability 197–8, 205; context-based 204; level decreased 201 action 78, 117–19, 121; action-outcome system 129; direct 222; goal achieving 222; meaning for others’ actions 225; morally relevant 87; mutual 216; practical implications 89; reparative 79; strategic 46 addicted individual 130, 139; cocaine addicts 129, 132 addiction 127–30, 136–7, 139; abstinence 131; alcoholism 137; behavioral 127, 130; heterogeneity 132; smoking 137; transition to 134; vulnerability 130, 139 addictive behaviors 138–9, 155; gambling 131–3, 135–6; indicators 134, 137 advancers 148 advertisements 165, 169–70, 174–6; content 168; incongruent 171; stimulus adverts 173 affect 77, 177; first affective classification 119; heuristics 109; intensity 26; negative 26; positive 26; produced 172 affective 103, 118–19; desirability function 123; feedback 77; function 7; responses 166; valuation 114 age 155, 201, 203, 218; audience 212n3; average 198 Ajzen, I 127–8 altruistic 33, 48n4; orientation 22 altruists 23–4, 28–9 anger 74, 77 anticipation 14; of aversive events 149; of risk 91 anticipatory hedonic desirability function 120 antisocial personality disorder 130, 132 approach behaviors 79–80 appropriate means 214, 217, 225 areas of interest 32–3, 96 Armstrong, J.S 185–6 arousal 22, 28–30, 37, 42, 44, 46–8, 170–1; affective 27; autonomic 133; cognitive 165, 168; increased 102–4; magnitude 47; measures 26; parameter 93; theory 122 associations 177; additional paths 169 attention 25, 26, 55, 168, 173, 174–5; differences 171; recipient 165; shared 215–16; to all outcomes 28; visual 55 attitude 173, 177; attitude-behavior model 127 audience 198, 200, 204, 212n6; age 212n3; gender 197, 201, 203–5; task 199 automatic 102, 129; emotional mechanisms 88, 93; processing 26, 68, 103–4 automaticity 127–8 autonomic 100, 103–4; indices 94, 97, 101–2; level 102; measures 88, 93, 98; reactivity 139; response 92 average index values 201 avoidance 150; aversive stimuli 11; behaviors 79, 110 Bach-Stravinsky dilemma 226 Bartels, D 91, 94 basis functions 59, 60, 61 Bault, N 15–16 Baumeister, R.F 81 Bayesian criterion 60, 62; inference 58 Bayesian network 182, 184–6, 188–9; model 183, 191–3; theory 57 Bechara, A 11, 87, 91–2, 96, 130–2, 138–9 Index   229 behavior 77, 128–9; adaptive 3, 11; amoral 75, 78; consumer 131, 167; control 130; decision 6, 12, 25; emotional-relevant 86; explorative 3, 221; goal-directed 8; immoral 75, 78, 80; negative influence 78; negative for others 81; non-human primate 226; norm-relating 78; occasional 130; of other players 46; pragmatic 93; prediction 22, 81, 183; rational 68; shame-induced 79; in social dilemmas 24; socially efficient 21 behavioral 129; adaptation 7–8, 12, 14, 16; consequences 82; constraints 46; influence 14; inhibition 139; outcomes 138; pattern 178; realistic 146; studies 13; theorists 127 benefit of others 73, 81 Benzion, U 148–9, 156 Berg, J.E 185 Bettman, J.R 127 Bhattacharyya coefficient 65–6 bias 12, 132, 200; cognitive 4; minimized 184; non-conscious 92 bioregulator processes 92 blame blood pressure 93, 97, 100, 102 board of directors 197–8; all male 204 bodily feelings 120 body temperature 97 bootstrapped standard errors 203 boredom proneness 139 brain 14, 167; activity 13, 89–90; activity increased 98, 101; events 166; mechanisms 103; reward system 129, 137–8; right-side activation 98; sensorymotor patterns 219; sensory representation 92 brain injured 10; bilateral damage 87; frontal lobe damage 130, 132, 139; frontotemporal dementia 87; insula abnormalities 131; lesion 8, 92; orbitofrontal cortex damage 10–12, 132; prefrontal cortex abnormalities 131; somatosensory cortex abnormalities 131 brain structures 87, 90, 98, 129; amygdala 14, 129; anterior cingulate cortex 11, 13, 87, 90, 129, 138; anterior insula 14; anterior temporal cortex 87; basal forebrain 87; basal ganglia motor circuits 129; brainstem periaqueductal grey matter 11, 14–15; caudate nucleus 14; cortical brain responses 88, 90; cortical maps 98–9; cortical sites 102; dorsal striatum 15, 129; dorsolateral prefrontal cortex 90, 138; endogenous opiate system 129; frontal cortex 98, 101, 129; frontal parietal networks 55; frontal polar cortex 87; hippocampus 13, 129; inferior parietal cortex 15; insula 129; limbic structures 87; medial frontal gyrus 87; medial orbitofrontal cortex 11–15; midbrain 87; nucleus accumbens 128–9, 137; orbitofrontal cortex 12, 87, 129; periaqueductal grey matter 14–15; prefrontal cortex 87, 93, 131; right angular gyrus 91; somatosensory cortex 15, 131; subgenual cortex 14; thalamus 87; ventral striatum 128, 130; ventromedial prefrontal cortex 87, 92 brand 165, 173; affect 176–7; associations 167, 172; extension 171; impression 174; rejuvenation 177 brand attitude 171; more favorable 176; prior 175 brand information 168; moderately congruent 169; moderately incongruent 170–1 brand schema 167, 175, 177; congruity 168; incongruity 166 buy-in 134 calibration 57, 189, 192; procedure 34, 56 Camerer, C 5, 27, 186, 187 Camille, N 8, 10–12, 17 centroids 62, 64–8 certainty 146–7, 155 chief executive officers 197–8, 204 children 215–17, 221, 224, 226 chimpanzees 216–17, 221, 226 choice 3, 10, 12, 14, 16, 24, 32, 56, 74, 89, 91, 95, 100, 103–4, 118, 148, 151–2, 201, 214; advantageous 131; behavioral 4, 73, 155; correct 203, 212n5; disadvantageous 131; egotistical 75; foregone 11; immediate over deferred rewards 130; impulsive 137; intertemporal 146, 149, 156; nonutilitarian 89; pattern 153–4; previous 57; someone else’s 13; superior 201–3; tasks 150; utilitarian 93, 98, 101–2 choose condition 9, 11, 14 classification 60, 114, 119 closure hypothesis 122 CNN futures market 185 coding 219, 222; behavior 221; of choices 201; higher levels 26; incoming data 167; information 178 cognition 87, 93, 103, 128 230   Index cognitive 76, 89–91, 166–7, 177; analytic system 54; control 88, 139, 190; costs 27; evaluation and reasoning 92; features 102; intervention 128; models 28; processes 5, 8, 25–6, 29, 47–8, 103, 150, 169; psychology 165, 225; representation 216; strategy 93, 104 Cohen, J 44, 134, 136, 166 coherence of desired ends 217, 225 collaboration 225; collaborative activities 224 commercial joint analysis tools 182 commitments 74, 80; self-binding 111 communication 31, 75, 215; brand 166; persuasive 165, 167, 176–7 competitive 33, 104; orientation 22; persons 48n4; social context 16 competitors 23–4, 28–9 compound event 201 computational model 182, 192 conflict 90; condition marker 101; intergroup 189; mental 95 congruent 172; advert 174–5; brand information 165; stimuli 168 conjoint analysis 182–3, 187, 188–9, 190, 191; computer-based 183; web-based 193 consequences 112–13 consumer 165, 169, 171; evaluations 170; final choice 167; schema 172, 176 content 28; of induced aim 110 contribution 28–30, 34–6, 42, 44, 46–7; behavior 22; common pool 31; decision 26, 32, 37; difference 43; information 41; levels 24, 46; patterns 29; preference 33 control 167; attributes 172; for differences 173; loss 127; mechanism top-down 138; precedence 76; unable to exert conscious control 131 cooperation 21–2, 30, 33, 36, 75, 214, 216, 221; behavior 34, 46; complex human 225 cooperative 74; orientation 22; people 37, 39–42, 44, 46–7 cooperators 24, 28–9, 47 Coricelli, G 11, 17 Costa-Gomes, M cognitive model 27–8 costs 189; additional 149; cost-benefit ratios 3; cost-benefit trade-off 27 counterfactual 6–7; comparisons 5; emotion 15–16; outcome 9; reasoning 13; thinking 10–11; upward Cournot Oligopoly 27 Croson, R and Gneezy, U 156 cultural 216; development 218; psychology 214; social construct 225 cut-off mechanism 111 Dahlén, M 166, 170 damaging the aggressor 113–14, 118 Damasio, A.R 87–8, 91–2, 109; Somatic Marker hypothesis 11 Dawes, R.M 185 debt aversion 150 decision 87, 92–3, 105; accountable or unaccountable 198; affect theory 5; against emotion-induced indication 111; alternative solutions 13; choices 102; current 78; emotional 110, 112; environment 76; impairment 12; incentivized 197; long-term 121; mechanism 86, 88; processes 64, 101; research 86; science 127; strategies 24; systems 103; tasks 91; theoretic model 112 decision-makers 74, 76–7, 82, 197, 198, 204, 212n1 decision-making 3, 6–8, 10, 12, 16, 22, 25–8, 47, 54–5, 68, 78, 92, 100, 131, 187, 189, 214–15; adaptive 27; approach 192; behavioral 75; cognitive processes 150; deficits 129, 132; descriptive approach 5; emotional influence 11, 77, 80–1, 86, 92–3, 102, 109; environments 182; functional programmes 81; private 16; processes 88, 109; under risk decision time 24, 28, 37, 47; longer 29, 39, 44 Declaration of Helsinki 55 decomposed game 22, 24, 33 deferrers 148 delay-speed-up asymmetry 146 deliberation 86, 111; deliberative system 103 demonstrator 219, 221 deontological 98, 100; choices 93, 101–2; considerations 90; group 97; judgments 88; option 95; responses 89, 98–9; subjects 95, 100–1 deontology 89; consistent emotional reactions 88 depression 118, 120 desirabilities 121; extrinsic 112, 122; subjective desires 7, 111–12, 214; of accumulation 146; distortion 120; emotion-induced 110, 113–14, 115, 118–22; extrinsic 112, 122; feeling-induced 113, 114, 120, Index   231 121, 122; incompatible 118; out of proportion 120; prospective 112–13; to compensate 80; total 112 despair 118 De Vecchi, N 225 disappointment 5, 8, 14; anticipated 10, 11 discordant pattern 153; codes 154 discount rates 146, 150; implicit 149 discrepancy 169–70, 176–7; resolved 168 distribution 198; positively skewed 37 disutility 16, 74 dopamine 129–30, 137; dopaminergic striatum 17; mesolimbic dopaminergic activity 16; release 128 drug abuse 132, 137; addiction 128–9; addictive drugs 137 dual process theory 54, 88 dyadic 218; interaction 216; preoccupation 81 economics 225; classical theories 3; decision-making 24; experimental 214; neoclassical 214; traditional 73 EEG 96, 178 efficiency 27; efficient use of private knowledge 216 elation 5, 10, 14 electrocardiogram 98 electrodes 96–7 elicitation 182, 186; tool 189, 191 embarrassment 74 emotion 5, 8, 12, 16, 75–7, 81, 87–8, 91, 93, 103, 105, 114, 118–19, 121; adaptive social 81; appertaining 114; arise during deliberation 109; behavioral consequences 75; choice-related 15; cognitive based 6; content 77, 110; endogenous or exogenous 77–8, 80; facial expression 91; impact on behavior 76; influence 105; induce goal intentions 109, 111; instinctive 89; intensity 10; leading to inactivity 118–19; maladaptive 81; in moral decisions 86–7, 101; motivational function 77; neural basis 10, 17; nonmoral 75; outcome-related 13, 15; positive 80; precedes deliberation 109; regulation 76; resonant mechanism 12–14, 16; role in decision-making 91; satisfying 119, 121–2; satisfying counterparts 116–17; ultimate 115; understanding of emotional states 13; value 101 emotional 102–3; amplifier 6; behavior increased 101; components 111; consequences 17; contagion 12; contribution 104; correlates 87; marker 97, 109; motivational system 121–2; processes 91; ratings 10; relevance 104; significance of stimuli 101; states of others 13; system 54, 111 emotional experiences 78; first-person 12; previous 14, 92 emotional reactions 9, 90, 105; containment 88; incorporated in judgments 86, 105; objective or subjective 10; prepotent 89 empathy 12, 80; scale 13; scores 15 emulative approach 215–17, 221 endophenotypes 130 environmental 24; conditions 88; ecological validity 139; modification 128 envy 15–16 Ethics Committee 55; ethical considerations 186 evaluation 6, 173, 177, 189; emotional 15; extremity 168; more favorable 171; of options 8, 112; responses 168; study 192 event-related potential modulation 88, 101; analyses 97; deflection 101; double neuropsychological measures 93; measures 96, 104 evolution 216; cultural 215; evolutionary function of emotions 123; evolutionary parsimony 121 expectancy 167–8, 174; valency 112, 121; value elaboration 110 expectations 6, 176, 185; influence responses 167; organized patterns 166 experiment 199, 218–21, 224; apparatus 222; conditions 219; design 30, 55, 222; method 94; procedure 34, 222; results 224; sequence 151; setting 56 experimental phase 94–5 experimenter 199, 218, 221; sequence performed 219–20 expert 192, 198; assessment 185–6; domain experts 183–4; elicitation 188, 191–2; judgment 182; opinion 186, 189, 193; rules 185 expertise 188, 212n3 expert-method interactivity 188 exploitation 3, 30, 46 eye-mind hypothesis 25, 27 eye-movement 26, 31, 55, 68; recording 56–7 eye-tracking 25, 27, 48, 178; candidates 35–6; data 34; infrared 57; measures 29; setting 56; system 30; technology 22, 56, 169; tool 31 232   Index facilitator-expert interaction 184 fear 76, 77; influence on cooperation 75 feedback 31, 189, 192; biofeedback 97; complete 9, 11, 12; negative 130; partial 9, 11–12 feeling 120; of futility 118; negative state 74 feeling-is-for-doing approach 76–7, 79, 81 female 13, 15, 94, 150, 152, 155–6, 197, 202; accountability 198, 203–4; adult partner 224; audience 197, 202; behavior 205; participants 13, 212n6 fictive prediction-error 12, 17 Fisher, I 146 fixations 25–7, 39, 46–8, 169; contribution information 41; duration 25, 28, 37–40, 48n6; number 26, 28, 40; proportions 41–2 flexibility 189; of emotional decisions 122 follow condition 9, 13 footbridge case 87, 90 forecasting 182; accuracy 186, 189; bootstrapping 186; good practices 188 Frank, R 74 free-riding 21–2, 46 frequency 128–9, 134, 138 Frijda, N.H 76, 79, 110 functional connectivity 87 functional magnetic resonance imaging 11, 131, 178; measures 90; studies 89 gain 146, 151–2, 155–6, 157–60; behavior 93, 105; decisional processes 101; individual 224; social 16 gain–loss asymmetry 146, 156 gain–loss symmetry 149 gains and losses 9–10, 13, 86–7, 92, 147–9, 152–3, 155; goals 91; intertemporal 147; monetary 150, 155; non-monetary 149, 156; symmetric 153 gambling 11–12, 128; addiction 131; problem 136, 138; recreational and habitual 136; regret gambling task 9–10; research 138; task 13, 15, 55, 103; vulnerability factor 137; warning 133 gambling behavior 128, 138; differences 133; involuntary 127; stabilized 128; volitional 127 gambling habit 127, 131–2, 134–6; neurological markers 137; relation between habit and addiction 131 game theorists 214 Gaussian distribution 65, 186 Gaussian mixture models 60–2, 64–6; clusters 62–5, 67; components 62, 64, 67; parameters 63; two-components 63–4 gaze 56, 67; bias 55, 68; cascade effect 55; gaze-related brain areas 54; parent 216 gender 153, 155, 197, 201; accountability 204; differences 156, 198, 205; effect 15, 150, 152, 155, 203; pairings 201, 204–5 genetic factors 130; law of cultural development 218 gloating 15–16 global models 134; full 135 goal 77, 216, 221, 224; collective 226; current 82; intentions 111–12; maximized 21; progress 77; shared 216, 224 Goodstein, R.C 169, 170 Green, K.C 186–7 Greene, J.D 88–91, 94, 102 group 74; schism 189, 191 guilt 74, 80–1; influence 75 habit 127–8; pathological 130–1; progression to addiction 137, 140 harm-minimization 138–9 Hartigan’s dip test 58–9 Hayek, F.A 185, 225 healthy subjects 10, 92 heart rate 97, 100, 102 Heckhausen, H 110–11 hedonic 114; desires 113; effects 120; motivational system 120, 122 Hess, E.H and Polt, J.M 26, 48 heuristic 184, 192; cognitive system 54; processes 68 Horner, V and Whiten, A 216, 218–19 imitation 216, 218–19, 221; of superfluous actions 217 impatience 139 impulse control disorders 130–2, 140 impulsivity 130–1, 134, 138–9, 149, 155; groups 137; high or low 133–6; measures 132 incentives 198, 205; monetary 150, 198 incongruity 168, 170–2, 176–8; moderate 174–7; operationalization 169 Inconsistency Index 184 individualist 23–4, 28–9, 33, 35–7, 39–42, 44, 46–7; orientation 22 induction-of-intrinsic-desires theory 110, 112 information 9, 27, 55–6, 168; acquisition 46; boards 25; causal 216–17, 219; Index   233 conscious integration 26; expectancy 171; incoming 169, 176–7; incompatible 169, 176–7; incongruent 166, 178; inspected 28, 40; integration 25; otherrelevant 42, 73; politically sensitive 189; prior 166; probabilistic 112; processing 24–5, 46, 47; relative importance 26; salient 103; search 22, 25, 27, 28–30, 34, 37, 44, 46–7; self-relevant 41–2; stimulus discrepancy 177; unexpected 169 informational cascade 54–5, 67 inhibitory control lacking 87 integrative modeling 182; socialbehavioral framework 192 intentionality 225; collective 216; shared 214–15, 218, 224, 226; we-intentionality 221 interactive games 26 interpersonal relations 166; severed 78 intersubjective triangle 216, 225 INTRADE 185 intrinsic desires 112–13, 118–19, 121; non-hedonic 114; mood-induced 120 Iowa Election Markets 185 Iowa Gambling Task 91–2, 94, 96–7, 100–1, 131–2, 138–9; paradigm 87; scores 133, 135–6 I-rationality 217, 225–6 James, W 76 joint 218; attention 221; intentions 216 judgmental bootstrapping 182, 185–8, 190 judgments 87; positive 165 Just, M.A and Carpenter, P.A 25–6 justification 197, 199–200 Kadane, J and Winkler, R.L 186 Kahneman, D and Tversky, A 4, 16, 103 Ketelaar, T and Au, W.T 74–5 Kolmogorov–Smirnov test 64, 133; results 64–5 Lacta brand 175; evaluations 173; schema 172 Lau, A.-H and Leong, T.Y 184 law of emotion-induced desires 115, 118 learning 12, 14; conceptual 7; extreme response 129; from others 215; intentional instruction 216, 221; interactive 13; language and culture 216; and memory 129; regret-based 10; reinforcement 16–17; social 215–16 Lee, Y.H and Mason, C 168, 170 Liebrand, W.B.G 35, 37 Liebrand, W.B.G and McClintock, C.G 24 likelihood 58, 63, 67; distributions 62, 64–5; probability 59; time series 61 Loewenstein, G 148–9 Loewenstein, G and Sicherman, N 147 long-term planning 121, 155 look-ups of self-relevant information 42–3, 46 loss 92, 132, 139, 146, 151–2, 156–60; aversion 4; financial 132; social 16 McGuire, J 89 MacInnis, D.J 169 male 15, 94, 132, 139, 150, 152, 155–6, 197; accountability 198, 203–4; audience 197, 202; behavior 205; participants 13, 202, 212n6 Mandler, G 165, 168, 170, 176–8 manipulation of environment 215–16 matching results 154 Mellers, B memory 166–7, 169, 175; acquisition 129; information storage 178; performance 176; working 170, 177 Messick, D and McClintock, C 22 metacognitive experience of satisfaction 177 method 186; evaluation 188; integration 190, 193; selection 187 methodological transparency 186 Meyers-Levy, J and Tybout, A.M 170 Miettinen, T and Suetens, S 75 Mischel, W 147–8 moderation 136; hypothesis 139 moderator 131 monetary 148, 155; gains and losses 156; outcomes 149, 151; value 150, 153 monkeys 224 monotonic utility function moral 87; choice 104; context 101; decision 87, 91, 100–1; decision-making 89, 93, 105; dilemmas 86–9, 91, 94–100; emotions 74–5, 78, 80–2; judgment 86–7, 91, 93; Motives Scale 96; psychology 86; response 105; satisfaction 114, 118, 120; sentiments 73; transgression 78, 80 morality 89, 93 motivation 77–8, 110, 128–9, 146, 221; diminished 119; emotional 87; intrinsic 113; to create shared goals 224 234   Index motivational 103, 129; account 81; biases 184; desires 118; motivational functions 77; effectiveness 123; function 119; intrinsic desirability function 122; judgments 112; mechanisms 110; nonhedonic valuation 115; system 120–1 mouselab 25, 27 negative outcomes 22, 150; for others 95; waiting for 149 Nelissen, R.M.A 75 Nelissen, R.M.A and Zeelenberg, M 81 neural circuits 92, 156; neural-network simulations 13 neurobiology 127; of drug addiction 128 neurophysiological studies 16 NEUROSCAN 4.2x 96 Niederle, M and Vesterlund, L 212n2 nodes 191–2 obesity 137 observed gaze 58 Oh, H and Hsu, C 128 one-shot games 22, 24, 28, 31; give-some dilemma 75; VCM 34, 35, 36, 44 online gambling 131, 136, 139; behavior 138; experience 137 opaque box 217, 219, 221 opportunity 77, 121–2 outcome 23, 137, 152; counterfactual 9; early 155; election 185; expected positive 54; foregone 9–10, 17; knowledge of 9, 54; larger later 152, 154; non-obtained 10; others 14–15, 47, 74; own 28; poor 130; positive and negative 22, 150; probability 5; realization 8; reducing risk 15; smaller earlier 152, 154; subjective values 147 Ozzane, J.L 169 Parks, C 24, 44 partial least squares path model 134; high impulsivity group 135–6 participants 27, 29–33, 55–6, 132, 150, 172–4, 198–9, 218–19, 222; amount earned 199–200; gender 201, 203; performance 220, 223; player type 37–8; statistics 199; volunteers 31 past personal experiences 92 pathological gambling 130, 132, 138–9; gamblers 129, 131 payoffs 28, 31–2, 34, 46–7, 197, 199, 204; determine own payoff 23, 46; of every player 47; information 29, 41–2, 48n1; ratio 133; sharing 204; sharing rules 200 performance 10; improvement perseverative response style 131 personal dilemmas 89–91 personality 22; traits 130 Pieters, R 169 Posner, M.I and Snyder, C.R.R 128 post-experimental phase 94, 96 prediction 35, 37, 55–6, 167, 175; accuracy influenced 186; directionality 17; environment 186; error 16–17; failure 22; markets 182, 185, 187–90; outputs 186; quality 136 pre-experimental phase 94, 104 preference 22, 68, 147, 149–50, 152, 156, 166, 183, 225; calculations 183; constant across time 154; earlier 154; expedite payments 150; intertemporal 148, 154, 156; judgment 192; later 153–4; pattern 152, 155; reversals 67; social 28, 33, 46; structure measurement 183; tasks 55, 67; time 146 Prelec, D and Loewenstein, G 149–50 pride or rage 114 principle of diminishing sensitivity 4–5 prisoner’s dilemma tasks 21, 75 probability 201; assessment 186, 192; calibration 183; distributions 65; elicitation 182–4, 187, 190; encoding stage 184; estimation 200; inverse 58; membership 63; posterior 58, 60, 62; prior 58; subjective 109 probability-value method 184 processing 26, 37; abandoned 176; conscious 102, 105; deeper 169; qualitative changes 39; resources 169 product 172; information 167, 191; partworths 183 profit 4, 22 proportional difference 154–5 pro-self 28–9, 33; participants 35–6, 41–2, 44; persons 47, 74–5 pro-social 28, 33; behavior 74, 80–1; individuals 47; participants 35, 42; people 36, 46–7, 75 prospect theory 4, 8, 112 psychological hedonism 113, 122 psychophysiological responses 88; activation increased 100; indices 97; measures 102 public good 24, 46; games 21–2, 24, 27, 31, 46 Index   235 public scrutiny 185 punishment 87, 130, 132, 147–9; of the aggressor 122 pupil dilations 26–8, 42–4, 48; function of player type 45; prediction by SVO value 44 qualitative exploration 97 quantitative model 185 questionnaires 56, 94, 96, 139, 148–9, 173; gambling 133; social value 32–3, 36 radio technology 97–8 Rae, J 146 rational 27; appraisals 86; choice theory 22, 73; desirability functions 122; features 102; identity 226; imitation 217; inferences 54; planning 113 rationality 54, 214, 225, 226; bounded 54; of observed action 217; species-unique model 226; violations 22 reaction time 99, 155 reason 86; abstract reasoning 90; conscious reasoning 92 recall 170, 173–5 reciprocity 47, 74, 225–6 recognition 174–6; test 173 regression 183, 185; men or women 203; results 204 regret 8–10, 13–16, 74, 118; anticipated 8, 11, 17; aversion 12 reinforcement 133; reinforcers 129; theory 128 relationships 218; non-monotonic 169, 175–6; repairing 81; social 214; threatened 81; transactional 225 relevancy 167, 168, 171, 174 relief 8–9, 14–16; anticipatory 17 remorse 74, 80 repeated games 24, 28; VCM games 31, 34–6, 44 resolution of task 199–201, 212n6 response 168; inhibition 131; latencies 24; neural mirror 12, 16; non-utilitarian 90; option 128; times 89–90, 98–100, 102 responsibility 6, 9; of action 226; for outcomes 8, 14 responsiveness 101–2, 104, 130 retrieval 169, 170, 176, 178 return to player 132–3 Reuben, E and Riedl, A 31 reward 3–4, 87, 120, 129, 132, 137–9, 147, 149–50, 215, 218; access to 221; actual 16; deficiency 130; impaired processing 130; monetary 151; others 226; processing 133; short-term 155 ring measure 24–5; of social values 32, 34, 39, 48n4 risk 87, 130, 132; aptitude 14; assessment 182; aversion 4, 12, 16; behavior 109; processing 133; seeking 4, 14–16, 104; strategy 87; taking 30, 93 Russo, J.E and Rosen, L.D 25 saccade 57; planning 55 sadness 118 Sani, F 189, 191 satisfaction 4, 102, 114–15, 119 schema 166, 172; incongruity 165, 168, 171–4, 176, 178 schooling 150, 153, 155–6 self 15, 79, 198; control problems 149, 155; interest 73–4; punishment 81; restraint 146; threatened 78–80 sensation seeking 130, 138–9 serotonin 129 setup costs 188; of integrated modeling 183 Shaffer, H.J 138 shame 74, 78–80 shared 21–2; emotions 12; goals 216, 224; payoffs 197, 199, 200, 204; response 14; regret 15–16; results 184; with others 22 signals 57; non-conscious 92; private 55, 67; pattern 58; sign effect 146, 148–9, 156 simple prospect event 200–1; choices 202; gender pairings 203 skin conductance response 10, 12, 15, 93, 97, 100, 102; increased 92, 103–4 Smith, A 73, 75, 81 social 17, 216; context 15–16; dilemma 21–2, 24, 74; domains 166; emotions flattened 87; experimentation 178; games 224; influences 13, 14; interaction 221; level 218; positive reinforcement 67–8; orientation 46; status 15 social value 46; questionnaire 32–3, 36 social value orientation 21–3, 25, 27–8, 30, 33–5, 39–40, 44, 46–7; assessment 32; predicitive validity 24; value 43 somatic marker 92, 132; hypothesis 92, 104 Spetzler, C.S and Staël von Holstein, C.-A.S 184 Steinhauer, S.R 26 stimulus 168; content 167; list 157–60; pretest 174 236   Index strategic games 22, 24, 27 strong-willed people 111 Stroop effect 90, 139 substance abuse 140; abused substance 129; euphoriant drugs 130; substance abusers 131 Svenson, O 25 Tangney, J.P 79 task 206–10; characteristics 186–7; instructions 211; tool-using 216 temporal patterns 36 Thaler, R.H 148–9 Theory of Moral Sentiments 73 three-person dictator games 81 threshold 134; condition 120; of emotional intensity 111 time commitment 184, 186 time-consistent 113, 146, 153–4 time delay 148–56; expected 147 time spent watching 173–4, 212n6; longer 169 Tomasello, M 214–15, 224, 226 Törn, F and Dahlén, M 169 transparent box 216–17, 219, 221 triadic interaction 216, 218, 225 Triandis, H.C 127 trust 226; and reciprocity 225 uncertainty 54, 67–8, 91, 146, 148 unconscious processes 91, 101–3, 105; emotional 88, 92–3 utilitarian 90, 100, 102; considerations 89; context 93; groups 97, 104; judgments 88; option 95; responses 98–9; subjects 95, 101 utility 3–4, 16, 54, 146, 183; discounted model 147, 156; functions 186; subjective expected 5, 112 valence of emotions 77, 103; psychological 112 valuation 114, 119, 121 value 122; closure 121; expected 3, 12, 15; fixed 184; function 4–5; judgment 112; orientation circle 35 Velichkovsky, B.M 26, 37, 47 victim 80–1 Vieider, F.M 197 violation of moral values 88–9, 95, 102 volatility 132–3 voluntary contribution mechanism 24, 26; games 25–8, 31–2, 42, 46 von Neumann, J and Morgenstern, O Wang, J.T 26, 47 Warneken, F 221, 224 weighting 4, 22, 25, 54, 148 welfare 102; of society 74 well-being 120; of others 47 we-rationality 215, 217, 225 Wicker, F.W 79 withdrawal 79 Yates, J.F and Watts, R.A 148, 156 Yeh, P.F 185, 187 ... (Emotions and morality in decision- making) The authors review the literature on the effects of emotions on decision- making and discuss them in relation to the principles of behavioral economics They... Configurations of the centroids obtained after several iterations (1,000) of the GMM   3.3 Parameters of the GMMs   3.4 Results of the test for the null hypotheses of equal vectors of the means and equal... Angela Sirigu Other books in the series include: Economics Lab An intensive course in experimental economics Alessandra Cassar and Dan Friedman Neuroscience and the Economics of Decision Making Edited