scholarly journals Rats exhibit similar biases in foraging and intertemporal choice tasks

2018 ◽  
Author(s):  
Gary A. Kane ◽  
Aaron M. Bornstein ◽  
Amitai Shenhav ◽  
Robert C. Wilson ◽  
Nathaniel D. Daw ◽  
...  
Keyword(s):  
Intertemporal Choice ◽  
Optimal Foraging Theory ◽  
Hyperbolic Discounting ◽  
Time Preferences ◽  
Common Mechanism ◽  
Similar Time ◽  
Short And Long Term ◽  
Choice Tasks ◽  
Exponential Discounting

AbstractAnimals, including humans, consistently exhibit myopia in two different contexts: foraging, in which they harvest locally beyond what is predicted by optimal foraging theory, and intertemporal choice, in which they exhibit a preference for immediate vs. delayed rewards beyond what is predicted by rational (exponential) discounting. Despite the similarity in behavior between these two contexts, previous efforts to reconcile these observations in terms of a consistent pattern of time preferences have failed. Here, via extensive behavioral testing and quantitative modeling, we show that rats exhibit similar time preferences in both contexts: they prefer immediate vs. delayed rewards and they are sensitive to opportunity costs — delays to future decisions. Further, a quasi-hyperbolic discounting model, a form of hyperbolic discounting with separate components for short-and long-term rewards, explains individual rats’ time preferences across both contexts, providing evidence for a common mechanism for myopic behavior in foraging and intertemporal choice.

scholarly journals Rats exhibit similar biases in foraging and intertemporal choice tasks

eLife ◽  
2019 ◽  
Vol 8 ◽  
Author(s):  
Gary A Kane ◽  
Aaron M Bornstein ◽  
Amitai Shenhav ◽  
Robert C Wilson ◽  
Nathaniel D Daw ◽  
...  
Keyword(s):  
Intertemporal Choice ◽  
Optimal Foraging Theory ◽  
Hyperbolic Discounting ◽  
Time Preferences ◽  
Common Mechanism ◽  
Similar Time ◽  
Short And Long Term ◽  
Choice Tasks ◽  
Exponential Discounting

Animals, including humans, consistently exhibit myopia in two different contexts: foraging, in which they harvest locally beyond what is predicted by optimal foraging theory, and intertemporal choice, in which they exhibit a preference for immediate vs. delayed rewards beyond what is predicted by rational (exponential) discounting. Despite the similarity in behavior between these two contexts, previous efforts to reconcile these observations in terms of a consistent pattern of time preferences have failed. Here, via extensive behavioral testing and quantitative modeling, we show that rats exhibit similar time preferences in both contexts: they prefer immediate vs. delayed rewards and they are sensitive to opportunity costs of delays to future decisions. Further, a quasi-hyperbolic discounting model, a form of hyperbolic discounting with separate components for short- and long-term rewards, explains individual rats’ time preferences across both contexts, providing evidence for a common mechanism for myopic behavior in foraging and intertemporal choice.

Do Time Preferences Matter in Intertemporal Consumption and Portfolio Decisions?

2019 ◽  
Vol 19 (2) ◽  
Author(s):  
Shou Chen ◽  
Shengpeng Xiang ◽  
Hongbo He
Keyword(s):  
Absolute Risk ◽  
Hyperbolic Discounting ◽  
Time Preferences ◽  
Hjb Equations ◽  
Portfolio Decisions ◽  
Special Cases ◽  
Intertemporal Consumption ◽  
Hamilton Jacobi Bellman ◽  
Hara Utility ◽  
Exponential Discounting

Abstract We study the intertemporal consumption and portfolio rules in the model with the general hyperbolic absolute risk aversion (HARA) utility. The equivalent approximation approach is employed to obtain the Hamilton-Jacobi-Bellman (HJB) equations, and a remarkable property is shown: portfolio rules are independent of the discount function. Moreover, both the consumption and portfolio rates are non-increasing functions of wealth. Particularly illustrative cases examined in detail are the models with the most adopted discount functions, including exponential discounting and hyperbolic discounting. Explicit solutions for intertemporal decisions are found for these special cases, revealing that individual’s time preferences affect the consumption rules only. Moreover, the time-consistent consumption rate under hyperbolic discounting is larger than its counterpart under exponential discounting.

A comparative computational and behavioral analysis of real estate performance

2017 ◽  
Vol 35 (3) ◽  
pp. 290-320 ◽  
Author(s):  
James R. DeLisle ◽  
Terry V. Grissom
Keyword(s):  
Asset Pricing ◽  
Financial Crisis ◽  
Real Estate ◽  
State Space ◽  
Hyperbolic Discounting ◽  
Time Preferences ◽  
Content Type ◽  
Agent Behavior ◽  
Market State

Purpose The purpose of this paper is to investigate changes in the commercial real estate market dynamics as a function of and conditional to the shifts in market state-space environment that can influence agent responses. Design/methodology/approach The analytical design uses a comparative computational experiment to address the performance of property assets in the current market based on comparison with prior structural patterns. The latent variables developed across market sectors are used to test agent behavior contingent on the perspectives of capital asset pricing conditionals (CAPM) and a behavioral momentum/herd construct. The state-space momentum analysis can assist the comparative analysis of current levels and shifts in property asset performance given the issues that have arisen with the financial crisis of 2007-2009. Findings An analytic approach is employed framed by a situation-dependent model. This frame considers risk profiles characterizing the perspectives and preferences guiding a delineated market state. This perspective is concerned with the possibility of shifts in market momentum and representativeness conditioning investor expectations. It is observed that the current market (post-crisis) has changed significantly from the prior operations (despite the diversity observed in prior market states). The dynamics of initial findings required an additional test anchored to the performance of the general capital market and the real economy across time. This context supports the use of a modified CAPM model allowing the consideration of opportunity cost in a space-time dynamic anchored with the consideration of equity, debt, riskless asset and liquidity options as they varied for the representative agents operating per market state. Research limitations/implications This paper integrates neoclassical and behavioral economic constructs. Combines asset pricing with prospect theory and allows the calculation of endogenous time-preferences, risk attitudes and formulation and testing of hyperbolic discounting functions. Practical implications The research shows that market structure and agent behavior since the financial crisis has changed from the investment and valuation perspectives operating as observed and measured from 1970 up to 2007. In contradiction to the long-term findings of Reinhart and Rogoff (2008), but in compliance with common perspectives and decision heuristics often employed by investors, this time things have changed! Discounting and expected rates of return are dynamic and are hyperbolic and not constant. Returns and investment for property assets are situational (market state-space specific) and offer a distinct asset class, not appropriately estimated by many of the traditional financial models. Social implications Assist in supporting insights to measure in errors and equations that result in inefficient resource allocation and beta discounting that supports the financial crisis created by assets subject to long-term decision needs (delta function). Originality/value The paper offers a combination and comparison of neoclassic asset pricing using a modified CAPM (two-pass) approach within the structural frame of Kahneman and Tversky’s (1979) prospect theory. This technique allows the consideration of the effects of present bias, beta-delta functions and the operation of the Allais Paradox in market states that are characterized by gains and losses and thus risk aversion and risk seeking behavior. This ability for differentiation allows for the development of endogenous time-preferences and hyperbolic discounting factors characteristic of commercial property investment.

scholarly journals A guaranteed immediate payout reduces impatience of financially constrained individuals

2022 ◽  
Vol 119 (3) ◽  
pp. e2108832119
Author(s):  
Kimberley van der Heijden ◽  
Anouk Festjens ◽  
Caroline Goukens ◽  
Tom Meyvis
Keyword(s):  
Lived Experiences ◽  
Intertemporal Choice ◽  
Time Preferences ◽  
Financial Strain ◽  
Financial Constraint ◽  
Capture Time ◽  
Future Needs ◽  
The Future ◽  
Choice Tasks

A large stream of literature found that individuals who experience financial strain are particularly concerned about their present needs—that is, they are more likely to choose smaller immediate payoffs over larger future payoffs. In contrast, some recent findings suggest that financially constrained individuals may be more concerned about future needs instead (e.g., they are relatively more likely to invest in long-lived durables than in short-lived experiences). We propose that the use of traditional intertemporal choice tasks has made prior studies overly sensitive to the myopia-inducing effects of financial constraint. These tasks typically offer a choice between receiving a smaller payoff in the present versus a larger payoff in the future. Across three studies, we observe that, as long as some immediate payout is guaranteed, financially constrained individuals are as likely as nonconstrained individuals to accept a delay for a larger payoff. These findings qualify prior demonstrations of the myopic effects of financial constraint and suggest that the traditionally used choice paradigm might not accurately capture time preferences, particularly for financially constrained individuals. Furthermore, they provide possible interventions for those interested in reducing the myopia of financially constrained individuals who are facing all now versus all later decisions.

scholarly journals Memory inception and preservation in slime moulds: the quest for a common mechanism

2019 ◽  
Vol 374 (1774) ◽  
pp. 20180368 ◽  
Author(s):  
A. Boussard ◽  
J. Delescluse ◽  
A. Pérez-Escudero ◽  
A. Dussutour
Keyword(s):  
Optimal Decision ◽  
Common Mechanism ◽  
Cognitive Architectures ◽  
Dormant Stage ◽  
Dormancy Period ◽  
Slime Moulds ◽  
Short And Long Term ◽  
Optimal Decision Making ◽  
Past Experiences

Learning and memory are indisputably key features of animal success. Using information about past experiences is critical for optimal decision-making in a fluctuating environment. Those abilities are usually believed to be limited to organisms with a nervous system, precluding their existence in non-neural organisms. However, recent studies showed that the slime mouldPhysarum polycephalum, despite being unicellular, displays habituation, a simple form of learning. In this paper, we studied the possible substrate of both short- and long-term habituation in slime moulds. We habituated slime moulds to sodium, a known repellent, using a 6 day training and turned them into a dormant state named sclerotia. Those slime moulds were then revived and tested for habituation. We showed that information acquired during the training was preserved through the dormant stage as slime moulds still showed habituation after a one-month dormancy period. Chemical analyses indicated a continuous uptake of sodium during the process of habituation and showed that sodium was retained throughout the dormant stage. Lastly, we showed that memory inception via constrained absorption of sodium for 2 h elicited habituation. Our results suggest that slime moulds absorbed the repellent and used it as a ‘circulating memory’.This article is part of the theme issue ‘Liquid brains, solid brains: How distributed cognitive architectures process information’.

Internal-Time Temporal Difference Model for Neural Value-Based Decision Making

2010 ◽  
Vol 22 (12) ◽  
pp. 3062-3106 ◽  
Author(s):  
Hiroyuki Nakahara ◽  
Sivaramakrishnan Kaveri
Keyword(s):  
Decision Making ◽  
Intertemporal Choice ◽  
Hyperbolic Discounting ◽  
Time Frame ◽  
Subjective Time ◽  
Temporal Difference ◽  
Internal Time ◽  
Learning Framework ◽  
Neural Activities ◽  
Choice Tasks

The temporal difference (TD) learning framework is a major paradigm for understanding value-based decision making and related neural activities (e.g., dopamine activity). The representation of time in neural processes modeled by a TD framework, however, is poorly understood. To address this issue, we propose a TD formulation that separates the time of the operator (neural valuation processes), which we refer to as internal time, from the time of the observer (experiment), which we refer to as conventional time. We provide the formulation and theoretical characteristics of this TD model based on internal time, called internal-time TD, and explore the possible consequences of the use of this model in neural value-based decision making. Due to the separation of the two times, internal-time TD computations, such as TD error, are expressed differently, depending on both the time frame and time unit. We examine this operator-observer problem in relation to the time representation used in previous TD models. An internal time TD value function exhibits the co-appearance of exponential and hyperbolic discounting at different delays in intertemporal choice tasks. We further examine the effects of internal time noise on TD error, the dynamic construction of internal time, and the modulation of internal time with the internal time hypothesis of serotonin function. We also relate the internal TD formulation to research on interval timing and subjective time.

scholarly journals Risk and Time Preferences: Linking Experimental and Household Survey Data from Vietnam

2010 ◽  
Vol 100 (1) ◽  
pp. 557-571 ◽  
Author(s):  
Tomomi Tanaka ◽  
Colin F Camerer ◽  
Quang Nguyen
Keyword(s):  
Prospect Theory ◽  
Survey Data ◽  
Expected Utility ◽  
Household Income ◽  
Household Survey ◽  
Hyperbolic Discounting ◽  
Time Preferences ◽  
Parameter Estimates ◽  
Household Survey Data ◽  
Exponential Discounting

We conducted experiments in Vietnamese villages to determine the predictors of risk and time preferences. In villages with higher mean income, people are less loss-averse and more patient. Household income is correlated with patience but not with risk. We expand measurements of risk and time preferences beyond expected utility and exponential discounting, replacing those models with prospect theory and a three-parameter hyperbolic discounting model. Comparable risk parameter estimates have been found for Chinese farmers, using our method. (C83, D12, O12, P38)

scholarly journals Risk Preferences Are Not Time Preferences

2012 ◽  
Vol 102 (7) ◽  
pp. 3357-3376 ◽  
Author(s):  
James Andreoni ◽  
Charles Sprenger
Keyword(s):  
Prospect Theory ◽  
Expected Utility ◽  
Choice Experiment ◽  
Intertemporal Choice ◽  
Risk Preferences ◽  
Hyperbolic Discounting ◽  
Time Preferences ◽  
Common Ratio ◽  
The Future

Risk and time are intertwined. The present is known while the future is inherently risky. This is problematic when studying time preferences since uncontrolled risk can generate apparently present-biased behavior. We systematically manipulate risk in an intertemporal choice experiment. Discounted expected utility performs well with risk, but when certainty is added common ratio predictions fail sharply. The data cannot be explained by prospect theory, hyperbolic discounting, or preferences for resolution of uncertainty, but seem consistent with a direct preference for certainty. The data suggest strongly a difference between risk and time preferences. (JEL C91 D81 D91)

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