What does it mean to be a Rational Decision Maker?

2015 ◽  
Vol 1 (2) ◽  
pp. 113-145 ◽  
Author(s):  
Barry Schwartz
Keyword(s):  
Decision Maker ◽  
Rational Decision

scholarly journals Individuals with ventromedial frontal damage have more unstable but still fundamentally transitive preferences

2018 ◽  
Author(s):  
Linda Q. Yu ◽  
Jason Dana ◽  
Joseph W. Kable
Keyword(s):  
Decision Making ◽  
Decision Maker ◽  
Decision Process ◽  
Healthy Controls ◽  
Rational Decision ◽  
Rational Choices ◽  
The Brain ◽  
Intransitive Preferences ◽  
Rational Decisions

AbstractThough the ventromedial frontal lobes (VMF) are clearly important for decision-making, the precise causal role of the VMF in the decision process has still not yet fully been established. Previous studies have suggested that individuals with VMF damage violate a hallmark axiom of rational decisions by having intransitive preferences (i.e., preferring A to B, B to C, but C to A), as these individuals are more likely to make cyclical choices (i.e., choosing C over A after previously choosing A over B and B over C). However, these prior studies cannot properly distinguish between two possibilities regarding effects of VMF damage: are individuals with VMF damage prone to choosing irrationally, or are their preferences simply more variable? We had individuals with focal VMF damage, individuals with other frontal damage, and healthy controls make repeated choices across three categories – artwork, chocolate bar brands, and gambles. Using sophisticated tests of transitivity, we find that, without exception, individuals with VMF damage made rational decisions consistent with transitive preferences, even though they more frequently exhibit choice cycles due to a greater variability in their preferences across time. That is, the VMF is necessary for having strong and reliable preferences across time and context, but not for being a rational decision maker. We conclude that VMF damage affects the noisiness with which value is assessed, but not the consistency with which value is sought.Significance statementThe VMF is a part of the brain that is thought to be one of the most important for preference-based choice. Despite this, whether it is needed to make rational choices at all is unknown. Previous studies have not discriminated between different possibilities regarding the critical necessary role that the VMF plays in value-based choice. Our study shows that individuals with VMF damage still make rational decisions consistent with what they prefer, but their choices are more variable and less reliable. That is, the VMF is important for the noisiness with which value is assessed, but not the consistency with which value is sought. This result has widespread implications for rethinking the role of VMF in decision-making.

scholarly journals How Much Would You Pay to Change a Game before Playing It?

Entropy ◽  
2019 ◽  
Vol 21 (7) ◽  
pp. 686
Author(s):  
David Wolpert ◽  
Justin Grana
Keyword(s):  
Willingness To Pay ◽  
Decision Maker ◽  
Direct Effect ◽  
Private Information ◽  
The Other ◽  
Rational Decision ◽  
Arbitrary Solution ◽  
Quantal Response ◽  
Parameter Change ◽  
Matching Pennies

Envelope theorems provide a differential framework for determining how much a rational decision maker (DM) is willing to pay to alter the parameters of a strategic scenario. We generalize this framework to the case of a boundedly rational DM and arbitrary solution concepts. We focus on comparing and contrasting the case where DM’s decision to pay to change the parameters is observed by all other players against the case where DM’s decision is private information. We decompose DM’s willingness to pay a given amount into a sum of three factors: (1) the direct effect a parameter change would have on DM’s payoffs in the future strategic scenario, holding strategies of all players constant; (2) the effect due to DM changing its strategy as they react to a change in the game parameters, with the strategies of the other players in that scenario held constant; and (3) the effect there would be due to other players reacting to a the change in the game parameters (could they observe them), with the strategy of DM held constant. We illustrate these results with the quantal response equilibrium and the matching pennies game and discuss how the willingness to pay captures DM’s anticipation of their future irrationality.

The Patient as Consumer: Empowerment or Commodification? Currents in Contemporary Bioethics

2015 ◽  
Vol 43 (1) ◽  
pp. 162-165 ◽  
Author(s):  
Melissa M. Goldstein ◽  
Daniel G. Bowers
Keyword(s):  
Health Care ◽  
Decision Maker ◽  
Health Care System ◽  
Patient Engagement ◽  
Patient Rights ◽  
Rational Decision ◽  
Consumer Empowerment ◽  
Consumer Rights ◽  
Vulnerable People ◽  
The U.S

Language matters. Thus when market language is imposed on the health care system, it seems natural to transform patients into consumers, and patient rights into consumer rights. But patients are not consumers who pick and choose among physicians and treatments on the basis of price and quality. Patients are sick and vulnerable people who are truly not themselves and are incapable of shopping around for the best deal.Discussions surrounding patient engagement and empowerment often appear to use the terms “patient” and “consumer” interchangeably. But do the two terms hold the same meaning, or is a “patient” a passive actor in the health care arena and a “consumer” an informed, rational decision-maker? Has there been a shift in our usage of the two terms that aligns with the increasing commercialization of health care in the U.S.

Intertemporal Bounded Rationality as Consideration Sets with Contraction Consistency

2011 ◽  
Vol 11 (1) ◽  
Author(s):  
Dean Spears
Keyword(s):  
Bounded Rationality ◽  
Decision Maker ◽  
Intertemporal Choice ◽  
Rational Agent ◽  
Consideration Sets ◽  
Model Choice ◽  
Rational Decision ◽  
Choice Sets

How would a boundedly rational agent react to a larger menu? I model choice from an unobservable, subjective consideration subset. Consideration sets satisfy Sen’s property alpha: larger objective choice sets can generate smaller consideration sets. The contribution of this paper is a representation of choice among menus: choice sets are only as valuable as the best item in their subjective subsets, so larger sets can be worse. Unlike people facing temptation, a boundedly rational decision maker can strictly prefer both of two choice sets to their union. This model of intertemporal choice reflects how an agent who satisfies Weak WARP would choose, if sophisticated about her bounded rationality.

BISER

2009 ◽  
pp. 66-68
Author(s):  
Dimitar Christozov
Keyword(s):  
Decision Making ◽  
Decision Maker ◽  
Quality Indicator ◽  
The Other ◽  
Rational Decision ◽  
Single Measure ◽  
A Value ◽  
The Common ◽  
The Given ◽  
Integral Quality

The Simon’s model of the decision-making process includes the phase of choosing among alternatives or options, designed for solving the given problem. Usually an option dominates in some of the properties and is less suitable according to others. Making a rational decision in choosing an option means to balance between different properties. There are two principle strategies in performing this task: • To evaluate every option on the whole set of properties, and • To apply a procedure to extract the best (the most suitable) one. Integration of information associated with the multiple properties of competitive options into a single measure is presented and discussed. Options could be goods to purchase, list of products for manufacturing, suppliers, services, technologies, and even candidates for a given position. The common in all such cases are: • The decision maker has to assign a value to every option in the competing group by comparing it against its alternatives—the other members of the same group. Further, we shall call this value integral quality indicator of the option. • Options in the group are described with a common list of properties or characteristics, which we will call further single quality indicators of the option. Different measures, designed to integrate the information provided by single indicators, are presented and discussed.

scholarly journals On the Irrationality of Being in Two Minds

Entropy ◽  
2020 ◽  
Vol 22 (2) ◽  
pp. 174 ◽  
Author(s):  
Shahram Dehdashti ◽  
Lauren Fell ◽  
Peter Bruza
Keyword(s):  
Decision Making ◽  
Probability Theory ◽  
Quantum Mechanics ◽  
Decision Maker ◽  
General Framework ◽  
Decision Making Under Uncertainty ◽  
Rational Decision ◽  
Rational Decision Making ◽  
Accessible Information ◽  
Human Decision

This article presents a general framework that allows irrational decision making to be theoretically investigated and simulated. Rationality in human decision making under uncertainty is normatively prescribed by the axioms of probability theory in order to maximize utility. However, substantial literature from psychology and cognitive science shows that human decisions regularly deviate from these axioms. Bistable probabilities are proposed as a principled and straight forward means for modeling (ir)rational decision making, which occurs when a decision maker is in “two minds”. We show that bistable probabilities can be formalized by positive-operator-valued projections in quantum mechanics. We found that (1) irrational decision making necessarily involves a wider spectrum of causal relationships than rational decision making, (2) the accessible information turns out to be greater in irrational decision making when compared to rational decision making, and (3) irrational decision making is quantum-like because it violates the Bell–Wigner polytope.

A Reward-Maximizing Spiking Neuron as a Bounded Rational Decision Maker

2015 ◽  
Vol 27 (8) ◽  
pp. 1686-1720 ◽  
Author(s):  
Felix Leibfried ◽  
Daniel A. Braun
Keyword(s):  
Mutual Information ◽  
Decision Maker ◽  
Sensory Input ◽  
Rate Distortion ◽  
Relevant Information ◽  
Motor Output ◽  
Spiking Neuron ◽  
Rational Decision ◽  
Rate Distortion Theory ◽  
The Many

Rate distortion theory describes how to communicate relevant information most efficiently over a channel with limited capacity. One of the many applications of rate distortion theory is bounded rational decision making, where decision makers are modeled as information channels that transform sensory input into motor output under the constraint that their channel capacity is limited. Such a bounded rational decision maker can be thought to optimize an objective function that trades off the decision maker’s utility or cumulative reward against the information processing cost measured by the mutual information between sensory input and motor output. In this study, we interpret a spiking neuron as a bounded rational decision maker that aims to maximize its expected reward under the computational constraint that the mutual information between the neuron’s input and output is upper bounded. This abstract computational constraint translates into a penalization of the deviation between the neuron’s instantaneous and average firing behavior. We derive a synaptic weight update rule for such a rate distortion optimizing neuron and show in simulations that the neuron efficiently extracts reward-relevant information from the input by trading off its synaptic strengths against the collected reward.

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