PIs: Prof. Dr. Ralph Hertwig,
Dr. Thorsten Pachur
Involved: Renata Suter
Institution: Max-Planck-Institut für Bildungsforschung Berlin
Abstract
The goals of this project are to examine the relationship between classical frameworks of rationality and models of bounded rationality in decision making, as well as to critically examine traditional norms of rationality. Given that a growing body of studies finds that neurological and mental abnormalities foster conformity to norms of rationality, the question arises how "sane" our benchmarks of rationality are. Another challenge to the classic benchmarks of rationality that we examine comes from the study of ecological rationality (see Gigerenzer, Hertwig, & Pachur, 2011). When employed in the appropriate environments, simple heuristics that violate principles of rationality can still yield the same decision performance as strategies adhering to these principles. Finally, we analyze how two approaches to modeling risky choice—algebraic models in the expectation tradition and models of heuristics, which have often been located at opposite ends on the rationality spectrum—can be brought together. Specifically, we show that the use of specific heuristics results in distinct and psychologically meaningful parameter profiles when measured in terms of the psychophysical framework assumed by algebraic models such as cumulative prospect theory (CPT). Characteristic regularities in risky decision-making as measured by CPT's functions—including loss aversion, risk aversion, and insensitivity to probabilities —could stem from the operation of specific heuristics.
Project-related Publications
Suter, R. S., Pachur, T., & Hertwig, R. (in press). How does affect shape risky choice? Distorted probability weighting vs. probability neglect. Journal of Behavioral Decision Making.
Suter, R. S., Pachur, T., Hertwig, R., Endestad, T., & Biele, G. (2015). The neural basis of risky choice with affective outcomes. PLoS ONE, 10(4):e0122475.
Pachur, T., Hertwig, R., Gigerenzer, G., & Brandstätter, E. (2013). Testing process predictions of models of risky choice: A quantitative model comparison approach. Frontiers in Psychology, 4:646.
Pachur, T., Hertwig, R., & Rieskamp, J. (2013). Intuitive judgments of social statistics: How exhaustive does sampling need to be? Journal of Experimental Social Psychology, 49, 1059-1077.
Suter, R. S., Pachur, T., & Hertwig, R. (2013). How does prospect theory reflect heuristics' probability sensitivity in risky choice? In M. Knauff, M. Pauen, N. Sebanz, & I. Wachsmuth (Eds.), Cooperative minds: Social interaction and group dynamics. Proceedings of the 35th Annual Conference of the Cognitive Science Society (pp. 1408-1413). Austin, TX: Cognitive Science Society.
More publications can be found on this page.
Relation to the SPP1516's second funding period
Project "How Efficient are Choice Heuristics under Varying Degrees of Uncertainty?" Go to project page...
Involved: Renata Suter
Institution: Max-Planck-Institut für Bildungsforschung Berlin
Abstract
The goals of this project are to examine the relationship between classical frameworks of rationality and models of bounded rationality in decision making, as well as to critically examine traditional norms of rationality. Given that a growing body of studies finds that neurological and mental abnormalities foster conformity to norms of rationality, the question arises how "sane" our benchmarks of rationality are. Another challenge to the classic benchmarks of rationality that we examine comes from the study of ecological rationality (see Gigerenzer, Hertwig, & Pachur, 2011). When employed in the appropriate environments, simple heuristics that violate principles of rationality can still yield the same decision performance as strategies adhering to these principles. Finally, we analyze how two approaches to modeling risky choice—algebraic models in the expectation tradition and models of heuristics, which have often been located at opposite ends on the rationality spectrum—can be brought together. Specifically, we show that the use of specific heuristics results in distinct and psychologically meaningful parameter profiles when measured in terms of the psychophysical framework assumed by algebraic models such as cumulative prospect theory (CPT). Characteristic regularities in risky decision-making as measured by CPT's functions—including loss aversion, risk aversion, and insensitivity to probabilities —could stem from the operation of specific heuristics.
Project-related Publications
Suter, R. S., Pachur, T., & Hertwig, R. (in press). How does affect shape risky choice? Distorted probability weighting vs. probability neglect. Journal of Behavioral Decision Making.
Suter, R. S., Pachur, T., Hertwig, R., Endestad, T., & Biele, G. (2015). The neural basis of risky choice with affective outcomes. PLoS ONE, 10(4):e0122475.
Pachur, T., Hertwig, R., Gigerenzer, G., & Brandstätter, E. (2013). Testing process predictions of models of risky choice: A quantitative model comparison approach. Frontiers in Psychology, 4:646.
Pachur, T., Hertwig, R., & Rieskamp, J. (2013). Intuitive judgments of social statistics: How exhaustive does sampling need to be? Journal of Experimental Social Psychology, 49, 1059-1077.
Suter, R. S., Pachur, T., & Hertwig, R. (2013). How does prospect theory reflect heuristics' probability sensitivity in risky choice? In M. Knauff, M. Pauen, N. Sebanz, & I. Wachsmuth (Eds.), Cooperative minds: Social interaction and group dynamics. Proceedings of the 35th Annual Conference of the Cognitive Science Society (pp. 1408-1413). Austin, TX: Cognitive Science Society.
More publications can be found on this page.
Relation to the SPP1516's second funding period
Project "How Efficient are Choice Heuristics under Varying Degrees of Uncertainty?" Go to project page...