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Why we should use animals to study economic decision making - a perspective.

Kalenscher T, van Wingerden M - Front Neurosci (2011)

Bottom Line: In a second part, we outline that actual, empirically observed decisions often do not conform to the normative ideals of economic and ecological models, and that many of the behavioral violations found in humans can also be found in animals.In a third part, we make a case that the sense or nonsense of the behavioral violations of optimality principles in humans can best be understood from an evolutionary perspective, thus requiring animal research.Finally, we conclude with a critical discussion of the parallels and inherent differences in human and animal research.

View Article: PubMed Central - PubMed

Affiliation: Department of Comparative Psychology, Institute of Experimental Psychology, Heinrich-Heine University Düsseldorf Düsseldorf, Germany.

ABSTRACT
Despite the rich tradition in psychology and biology, animals as research subjects have never gained a similar acceptance in microeconomics research. With this article, we counter this trend of negligence and try to convey the message that animal models are an indispensible complement to the literature on human economic decision making. This perspective review departs from a description of the similarities in economic and evolutionary theories of human and animal decision making, with particular emphasis on the optimality aspect that both classes of theories have in common. In a second part, we outline that actual, empirically observed decisions often do not conform to the normative ideals of economic and ecological models, and that many of the behavioral violations found in humans can also be found in animals. In a third part, we make a case that the sense or nonsense of the behavioral violations of optimality principles in humans can best be understood from an evolutionary perspective, thus requiring animal research. Finally, we conclude with a critical discussion of the parallels and inherent differences in human and animal research.

No MeSH data available.


Related in: MedlinePlus

Constant vs. hyperbolic discounting of future events. The figure describes a choice between a small, short-term outcome or a large, long-term outcome (proximal), and another situation in which both outcomes are deferred into the future by the same time interval (distant). (A) Constant (here: exponential) utility function of a large, delayed (gray line) and small, short-term commodity (black line). With exponential discounting, preference stationarity holds when the rewards are deferred by the same time interval into the future. (B) People seem to place a premium on short-term availability of rewards, deflecting the discount into an upward direction for temporally close rewards. The resulting hyperbolic discount function can explain preference reversals over time. Due to the steeper utility decay for short delays, the utility of the small, short-term commodity is higher than the large, delayed reward for temporally proximal outcomes, but the utility order reverses when both outcomes are deferred into the future.
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Figure 2: Constant vs. hyperbolic discounting of future events. The figure describes a choice between a small, short-term outcome or a large, long-term outcome (proximal), and another situation in which both outcomes are deferred into the future by the same time interval (distant). (A) Constant (here: exponential) utility function of a large, delayed (gray line) and small, short-term commodity (black line). With exponential discounting, preference stationarity holds when the rewards are deferred by the same time interval into the future. (B) People seem to place a premium on short-term availability of rewards, deflecting the discount into an upward direction for temporally close rewards. The resulting hyperbolic discount function can explain preference reversals over time. Due to the steeper utility decay for short delays, the utility of the small, short-term commodity is higher than the large, delayed reward for temporally proximal outcomes, but the utility order reverses when both outcomes are deferred into the future.

Mentions: Most of our decisions do not yield immediate outcomes, but outcomes that can only be realized at some point in the future. Literally all human and non-human animals tested devalue (discount) future relative to immediate outcomes (Samuelson, 1937; Knapp et al., 1959; McDiarmid and Rilling, 1965; Chung and Herrnstein, 1967; Rachlin and Green, 1972; Ainslie, 1974, 1975; Benzion et al., 1989; Green et al., 1994; Kalenscher et al., 2005, 2006a, b; Kalenscher and Pennartz, 2008). In economics, the dominant framework for decision making over time is discounted utility theory (DU; Samuelson, 1937; Koopmans, 1960; Lancaster, 1963; Fishburn and Rubinstein, 1982; Prelec and Loewenstein, 1991; Frederick et al., 2002; Kalenscher and Pennartz, 2008). In brief, DU posits that a decision maker behaves as if she maximized discounted utility, with discounted utility being the sum of the discount-factor-weighted utilities of all possible final states. Classically, DU assumed an exponentially decreasing discount function with a constant discount rate (Figure 2A; Samuelson, 1937). Constant discounting has important implications for rationality and time-consistency of preference. According to DU, it is not irrational or non-optimal per se to prefer small, short-term over large, long-term rewards, even if the preference for immediacy results in an overall reduced net gain over time. However, DU requires consistency over time. That is, if an individual prefers a small, short-term reward over a large, long-term reward, and both rewards are shifted in time by an identical time interval, then the preference for the small, short-term reward should be preserved because both rewards should be discounted by the same rate.


Why we should use animals to study economic decision making - a perspective.

Kalenscher T, van Wingerden M - Front Neurosci (2011)

Constant vs. hyperbolic discounting of future events. The figure describes a choice between a small, short-term outcome or a large, long-term outcome (proximal), and another situation in which both outcomes are deferred into the future by the same time interval (distant). (A) Constant (here: exponential) utility function of a large, delayed (gray line) and small, short-term commodity (black line). With exponential discounting, preference stationarity holds when the rewards are deferred by the same time interval into the future. (B) People seem to place a premium on short-term availability of rewards, deflecting the discount into an upward direction for temporally close rewards. The resulting hyperbolic discount function can explain preference reversals over time. Due to the steeper utility decay for short delays, the utility of the small, short-term commodity is higher than the large, delayed reward for temporally proximal outcomes, but the utility order reverses when both outcomes are deferred into the future.
© Copyright Policy - open-access
Related In: Results  -  Collection

License
Show All Figures
getmorefigures.php?uid=PMC3118901&req=5

Figure 2: Constant vs. hyperbolic discounting of future events. The figure describes a choice between a small, short-term outcome or a large, long-term outcome (proximal), and another situation in which both outcomes are deferred into the future by the same time interval (distant). (A) Constant (here: exponential) utility function of a large, delayed (gray line) and small, short-term commodity (black line). With exponential discounting, preference stationarity holds when the rewards are deferred by the same time interval into the future. (B) People seem to place a premium on short-term availability of rewards, deflecting the discount into an upward direction for temporally close rewards. The resulting hyperbolic discount function can explain preference reversals over time. Due to the steeper utility decay for short delays, the utility of the small, short-term commodity is higher than the large, delayed reward for temporally proximal outcomes, but the utility order reverses when both outcomes are deferred into the future.
Mentions: Most of our decisions do not yield immediate outcomes, but outcomes that can only be realized at some point in the future. Literally all human and non-human animals tested devalue (discount) future relative to immediate outcomes (Samuelson, 1937; Knapp et al., 1959; McDiarmid and Rilling, 1965; Chung and Herrnstein, 1967; Rachlin and Green, 1972; Ainslie, 1974, 1975; Benzion et al., 1989; Green et al., 1994; Kalenscher et al., 2005, 2006a, b; Kalenscher and Pennartz, 2008). In economics, the dominant framework for decision making over time is discounted utility theory (DU; Samuelson, 1937; Koopmans, 1960; Lancaster, 1963; Fishburn and Rubinstein, 1982; Prelec and Loewenstein, 1991; Frederick et al., 2002; Kalenscher and Pennartz, 2008). In brief, DU posits that a decision maker behaves as if she maximized discounted utility, with discounted utility being the sum of the discount-factor-weighted utilities of all possible final states. Classically, DU assumed an exponentially decreasing discount function with a constant discount rate (Figure 2A; Samuelson, 1937). Constant discounting has important implications for rationality and time-consistency of preference. According to DU, it is not irrational or non-optimal per se to prefer small, short-term over large, long-term rewards, even if the preference for immediacy results in an overall reduced net gain over time. However, DU requires consistency over time. That is, if an individual prefers a small, short-term reward over a large, long-term reward, and both rewards are shifted in time by an identical time interval, then the preference for the small, short-term reward should be preserved because both rewards should be discounted by the same rate.

Bottom Line: In a second part, we outline that actual, empirically observed decisions often do not conform to the normative ideals of economic and ecological models, and that many of the behavioral violations found in humans can also be found in animals.In a third part, we make a case that the sense or nonsense of the behavioral violations of optimality principles in humans can best be understood from an evolutionary perspective, thus requiring animal research.Finally, we conclude with a critical discussion of the parallels and inherent differences in human and animal research.

View Article: PubMed Central - PubMed

Affiliation: Department of Comparative Psychology, Institute of Experimental Psychology, Heinrich-Heine University Düsseldorf Düsseldorf, Germany.

ABSTRACT
Despite the rich tradition in psychology and biology, animals as research subjects have never gained a similar acceptance in microeconomics research. With this article, we counter this trend of negligence and try to convey the message that animal models are an indispensible complement to the literature on human economic decision making. This perspective review departs from a description of the similarities in economic and evolutionary theories of human and animal decision making, with particular emphasis on the optimality aspect that both classes of theories have in common. In a second part, we outline that actual, empirically observed decisions often do not conform to the normative ideals of economic and ecological models, and that many of the behavioral violations found in humans can also be found in animals. In a third part, we make a case that the sense or nonsense of the behavioral violations of optimality principles in humans can best be understood from an evolutionary perspective, thus requiring animal research. Finally, we conclude with a critical discussion of the parallels and inherent differences in human and animal research.

No MeSH data available.


Related in: MedlinePlus