Literaturae

• Choices based on…

  • Instrumental value: expected impact of knowledge on actions

    • will the knowledge help, hidner or have no influence on my ability to increase reward and avoid harm?

    • People seek information which they expect to increase extrinsic reward and evade losses

    • Knowledge can lead people to make worse decision (i.e. bias)

    • in Rational choice theory, information cannot have negative value since people can always disregard information

  • Hedonic value: expected impact on affect

    • i.e. using information to regulate emotions

    • Examples: people being more willing to pay for information they expect to be good and paying to avoid information they expect to be bad

    • Subcortical regions of the reward system coded for good information, no such regions for bad informations

    • in some cases, people might seek information they expect to be bad (to avoid prolonged anxiety) or delay good information (to be pleasantly surprised later)

  • Cognitive value: Expected impact on cognition

    • Will information improve ability to comprehend and anticipate reality?

    • Information alters peoples internal mental models

      • People seek more information on topics that are frequently activated and highly interconnecto to other concepts in their mental models

  • Each factor can be weighted differently depending on person and situation

• Utility of beliefs

• Need to fill in gaps of knowledge

• Need for confirmation

• Need for confidence

• Impact of information on emotions (expected affect) and material outcomes for others

• Peoplee strive to minimize difference between mental models and reality

• Can be achieved by

  • Seeking information that will create new connections and thus refine the mental model -> this will increase people's ability to comprehend and anticipate reality

  • Avoiding information that might weaken existing interconnected ties within the model -> disconfirming information might be attributed negative cognitive value

• People must predict the

  • Expected content of information

  • Expected influence on affect, cognition and action of an information

• This prediction can be really hard because

  • People are bad at estimating probability

  • People have biases

  • There's a gap between expected utility at the decision time and at the time when information is actually received

• Disjunctions between expected and actually experienced utility due to information varies across individuals (depending on individuals' susceptibility to different biases)

• Opportunity to gain knowledge encoded using some of the same neural architecture ans algorithms of primary rewards -> knowledge might have instrinsic value

• Information prediction error signals in dopamine-rich regions

• Mental illnesses are characterized by abnormal information seeking

  • Anxiety: intolerance for uncertainty -> increased weighting of cognitive utility

  • Depression: reduced sensitivity to valence and reduced belief in control -> might reduce the impact of hedonic and instrumental utility

• Bi-directional relationship: mental illness influences information seeking, but information seeking behaviour also influences mental illness

  • I.e. overexposure to negative information might aid the development of depression

  • Dopamine function plays a role in information seeking -> patients with dopamine-related disorders (i.e. Parkinson, schizophrenia, depression) might be more prone to abnormal information seeking

• Information should eb framed in a way that highlights its ability to

  • Guide action and/or

  • Improve affect and/or

  • Improve cognition

• Individual differences in information seeking patterns and influece of information on welfare of different demographic groups should be considerer when disclosing information

• Information might be framed according to characteristics of target group

• Economics

  • Focuses on observed choices and preferences

  • Igonres emotions like guilt (unless they influence future decisions)

• Psychology

  • Mental states

  • Internal conflicts (i.e. impulsive vs. rational self)

  • Goal of maximizing happiness

• Biology

  • Frames behaviours in terms of evolutionary fitness and neural mechanisms

  • Highlights

    • Ultimate (evolutionary) causes

    • Proximal (neural) causes

• People derive satisfaction from utility from wealth and other oucomes in a way that diminishes as wealth increases

• Utility follows a concave function (logarithmic function)

• Assigning numerical values to prefernces problematic because…

  • Utilities are not measurable

  • cannot be compared across individuals

  • arbitrary ad hoc adjustments

• Ranking without numbers (ranking preferences without precise measurement

  • preferences cannot be compared across individuals

  • not possible to make predictions or calculations (multiply, add etc.)

  • Not possible to figure out if one preference is stronger than another

• Interpretation of preference

  • In reality preferences are context dependent -> ordinary framework overly simplistic and unrealistic

• The Deniers

  • Argue that anomalies (i.e. Allais Paradox, Endowment Effect) are too specific to threaten general economic models

• The Naysayers

  • Assert that anomalies expose fundamental flaws in neoclassical models

  • Require abandonment of axiomatic approaches

• The Middle grounders

  • Propose extending neoclassical models by adding parameters to account for behavioural anomalies

  • i.e. Prospect Theory

• The Reviser

  • Advocate for interdisciplinary integration while maintaining logical foundations of each discipline

  • i.e. Integrating psychological things such as “regret” into economic models

• Relational frameworks as cognitive frameworks

  • Used by people to make sense of interactions

• Models are universal but implementation varies across cultures

  • i.e. communal sharing more prominent in some societies than others

• Models applies to wide range or societal phenomena, including

  • moral judgement

  • Group decision-making

  • social justice

  • Religious practices

• In real life people often use a mix of those models instead of just one in isolation

• Communal Sharing

  • Members of group are treated as equivalent and undifferentiated

  • Resources shared freely based on needs

  • No tracking of individual contributions

  • Common examples

    • Kinship

    • Love relationships

    • Communal rituals

• Authority Ranking

  • Relationships defined by authority and hierarchy

  • Rank determines

    • Privileges

    • Responsibilities

  • High ranking individuals have more control and resources, but are als expected to care and protect subordinates

  • Common examples

    • Military

    • Generational hierarchies

    • Many traditional societies

• Equality Matching

  • Emphasis on balance and reciprocity

  • Focus on

    • Eunsuring fairness

    • Maintaining equilibrium in exchange

  • Examples

    • Eye-for-an-eye justice

    • Shared responsibilities (i.e. carpooling)

    • Turn-taking

• Market pricing

  • Relationships based on

    • Proportionality

    • Cost-benefit analysis

  • Interactions include

    • Setting prices

    • Exchanging goods and services

  • Dominant framework in capitalism and wage systems

Communal Sharing

Equality Matching

Authority Ranking

Market Pricing

• Challenges individualistic view of social relationships

• Implies people are fundamentally relational

• Provides framework to understand social behaviour across disciplines

• Model as tool to interpret cooperation and conflict in socual dynamics

• Model to explain phenomenas such as

  • Group identities

  • Social hierarchies

  • Economic exchanges

• Definition of Game Theory: Studies strategic interactoins where outcome for each participant depends on the actions of others

• Assumptions

  • Players act rationally

  • Players seek to maximize own outcomes based on available information

  • Games can inclued pure conflict or pure cooperation (or both)

• Limitations

  • Works well in scenarios where people act rationally, struggles when people act irrationally (madness, love)

• Applications

  • Designing auctions

  • Evolitionary biology

• Key Concepts

  • Nash Equilibrium

  • Utility

    
    

• Mixed strategies

  • Randomizing choices among pure strategies to keep opponent guessing

• Mixed Nash equilibrium

  • Equilibrium achirved by using mixed strategies

• Chance and randomization are not irrational but rather strategic to avoid exploitation

• Games where players know the history of actions taken (i.e. chess)

• Backwards induction: Technique used to solve games by reasoning backwards from the end of the game to the beginning

  • Identifies sequence of moves which maximizes player’s outcome

  • Applied theoretically to games like chess, but impractical to games with vast possibilities

  • Nash Equlibrium: Backwards induction can be mimicked by eliminating dominated strategies (those that are never the best response)

  • Process ensures players follow rational path, highlights subgame perfection (optimal strategies in every possible situation of the game)

• Overgeneralization of cooperative strategies learned in contexts with direct or indirect reciprocity

  • People act as if they will get a reputation or a “payback” for behaviour even though that is not possble in specific context

  • People develop habits/intuitions for cooperation in situations where those are advantageous and unintentionally apply them to other contexts where they might not be beneficial

• Intuitive cooperation

  • Cooperation is fast

  • Automatic response shaped by prior experiences and cultural norms

• Human cooperation influenced by

  • Cultural evolution

  • Social learning

    -> intuition about cooperation can vary based on social norms and experiences with cooperative environments

• Intuitive responses tend to favour cooperation

• Deliberate reasoning often leads to selfish choices

• Further reason for why cooperation evolved

• Natural selection also operates on level of the group, not only on individual level

• While individually defectors outperform cooperation, groups with more defectors are weaker than groups with more cooperators and thus survive less

• Idea that cooperation is more likely to evolve in structured population where individuals interact more frequently with their neighbours than with distant individuals/stragers

• In such environments cooperation can cluster together and create environments where cooperation is mutually beneficial

• Dynamic inteaction, including ability to make and break connectoins, promotes cooperative behaviours by allowing individuals to shape their networks in ways that promote cooperation and punish defection

• Idea: Rational individuals will commit crime if marginal benefit from being dishones outweights marginal costs of being dishonest

  • Therefore people in similiar economic contexts should only vary in their dishonesty because of different rusk attitudes/different risks of being discovered

• Support: people are indeed reactive to variations in

  • Incomes

  • Tax rates

  • Probabilities of detection

• People cheat much less than required by maximization of income

• Incomplete dishonesty: most people cheat, but not fully (i.e. small theft rate of 10% but no more, not influenced by detection risk)

  • People might engage in cheating opportunities while still maintaining their self-concept of honesty

  • People might even lie disadvantagously to appear more honest

• Huge heterogenity in peoples dishonesty even if risk of detection is the same

  • Lying seems to have high moral cost

• Heterogenity also exists within individuals

• Dishonesty aversion smaller in children -> likely norm is internalized over time

• People dislike not keeping their promises and lying when it hurts others

• Large amount of people not willing to tell lies, even if it increases payoff for both

• Consequentalists: mainly care about the outcome of their actions (even if actions themselves are immoral, i.e. lying to make someone feel better)

• Non-consequentalists: focus on the action and pay little attention the the outcome (will not lie because it's immoral, even though it might have better outcome)

• Manipulating own moral firmness

  • Can happen conciously or unconciously

  • Can create self-justification lies by self-serving rationalizations such as

    • Managing attention

    • Reframing decision problems

      • i.e. focusing on the benefit ones lie caused to others

  • Engaging in moral balancing

• Strategic ignorance

• Delegation of responsibility

• Convince self that others would lie aswell in this situation

  • Bad examples from other influence lying behaviour more than good examples

  -> BUT: people shy away from doing this if they’re expected to reciprocate

• Combination of culture and market can crowd out moral values

  • In cultures where honesty is highly regarded, market might not be enough to crowd out moral value of honesty

• If markeet puts emphasis on materialistic values, culture can either strengthen or weaken moral values

  • Priming participants also works in this context

• Dishonest market culture might lead to more individual dishonesty because of

  • deindividualization

  • Spread of dishonesty through organization through social interactions

• Job culture does not affect all members the same

  • When personal norms do not match group norms -> more dissatisfaction and dishonesty

• Systems of incentives can crowd in or crowd out dishonesty

Oxytocin promotes group-serving dishonesty

• Implicit lies > explicit lies

  • Explicit: telling something that is wrong

  • Implicit lies: not revealing certain information

• When there is a regulation but no loophole > when there is no regulation > When there is a regulation which prohibits cheating but you found a loophole

• Appealing to moral reminders > appealing to legal reminders

• Extensive interactions with people they can cheat befor cheating opportunity

• Social image concerns/shame: people show more taxpayer compliance when cheating is publicly exposed

  • But if incentive is strong enough observability does not affect people anymore

  • Most people also don’t like denouncing cheaters

• Asymmetric liabilities

  • If bribe-takers are culpable but bribe-takers are immune -> less bribes

• Individual rewards > competitive rewards

  • Even more so if theres a bigger spread between the competitive rewards and it is caluclated based on relative perfomance

• Shifting attention from money/performance to time

  • Probably because time triggers people to reflect and activates self-concept

• Commonly known standards of behaviour

• Based on widely shared views on how individual groups members ought to behave in given situation

• Crucial featuers

  • Estabilshes a normative standards of behaviour which applies to

    • particular group

    • particular situation

  • Norm not defined based on members actual behaviour, motivs, compliance, conditions

  • Normative standard and its approval is

    • widely shared

    • commonly known

• Large amount of people cooperate, even in one-shot games

• Large proportion of players are conditional cooperators

• Widespread willingness to punish free-riders

  • Most people prefer to have punishment opportuinity in games

  
  

• Group structure

  • People playing game with same members

    • Playing a finite amount of games with different members always leads to decline in cooperation

  • Groups with stable group composition (group matching) instead of random reassignment of individuals (stranger matching)

• Game rules

  • Possibility to punish free riders

    • BUT: associated with initial high costs

    • Effect undermined if

      • Punishment signals selfish intention

      • There’s also antisocial punishment

  • Possibility to reward cooperators

    • Through preferred choice of players or direct rewarding

  • People being allowed to communicate about game before it starts

• Gameframing: more cooperation when calling game community game instead of stock game market

  • But effect vanihes if game is played sequentially

• Stable cooperation at very high levels can be achieven if

  • Cooperative individuals are exogenously matched together

  • Individuals can give advide that is common konwledge to the next generation

Active pursuit of knowledge such as asking questions, reading, running test or conducting online research