Maximising utility does not promote survival

2013 ◽  
Vol 36 (6) ◽  
pp. 685-685
Author(s):  
Daniel B. Cohen ◽  
Lauren L. Saling

AbstractWe argue that maximising utility does not promote survival. Hence, there is no reason to expect people to modulate effort according to a task's opportunity costs. There is also no reason why our evaluation of the marginal opportunity costs of tasks should predictably rise with repetition. Thus, the opportunity cost model cannot explain why tasks typically become harder over time.

2019 ◽  
Author(s):  
Jonas Dora ◽  
Madelon van Hooff ◽  
Sabine A. E. Geurts ◽  
Michiel A. J. Kompier ◽  
Erik Bijleveld

Most people experience the feeling of mental fatigue on a daily basis. Previous research shows that mental fatigue impacts information processing and decision making. However, the proximal causes of mental fatigue are not yet well understood. In this research, we test the opportunity cost model of mental fatigue, which proposes that people become more fatigued when the next-best alternative to the current task is higher in value. In three preregistered experiments (total N = 300), participants repeatedly reported their current level of fatigue and chose to perform a paid labor task vs an unpaid leisure task. In Study 1, all participants were offered the same labor/leisure choice. In Studies 2 and 3, we manipulated the opportunity costs of a labor task through the value of an alternative leisure task. In all studies, we found that people were more likely to choose for leisure as they became more fatigued. We did not find that the manipulated leisure value influenced the amount of fatigue participants experienced nor the likelihood to choose for leisure. However, in exploratory analyses, we found (and replicated) that participants who reported to value the leisure task more got more fatigued during labor and less fatigued during leisure. Collectively, these results provide cautious support for the opportunity cost model, but they also show that cost-benefit analyses relating to labor and leisure tasks are fleeting.


2021 ◽  
pp. 1-16
Author(s):  
Robert Sing

Abstract During the fourth century, the amount of money Athenians got from the polis for volunteering to sit on a jury and for attending the assembly diverged significantly. Jury pay remained at 3 obols a day, despite inflation, while the pay given for a principal (kyria) assembly eventually rose from 1 obol to 9 obols—outpacing inflation and overcompensating most citizens for their time. What demographic reconstruction of the jury can explain why the real value of jury pay never declined to the point that too few Athenians volunteered? Self-reliant citizens (penêtes) must have dominated the jury pool, and penêtes with young adult children would have volunteered most often. Having an additional source of household labour reduced the opportunity cost of jury service for these Athenians and made their participation more resilient in the face of the declining value of pay. Citizens who faced greater opportunity costs probably participated less over time, meaning that fourth-century juries gradually became less diverse. By contrast, the growth in assembly pay can best be understood in terms of the ‘Lycurgan’ agenda of the 330s and the 320s. Greater pay helped to ensure that the assembly's newly expanded meeting place on the Pnyx was filled to capacity with citizens from all over Attica. The result was a massive spectacle that celebrated a threatened democracy and stimulated the polis economy. Since the courts lacked the same capacity for spectacle, there was no political motivation to pay jurors more.


2016 ◽  
Vol 61 (10) ◽  
pp. 2130-2157 ◽  
Author(s):  
Tyler Kustra

This article views death in battle as an opportunity cost whose size is determined by the number of years a rebel would have lived as a civilian. As civilian life expectancy declines, this opportunity cost does too, increasing the probability of rebellion. This theory is tested with a tragic natural experiment: the HIV/AIDS epidemic in sub-Saharan Africa. Using male circumcision rates as an instrument for life expectancy, the analysis shows that a one-year increase in life expectancy decreases the probability of civil war by 2.6 percentage points. This supports the theory that opportunity costs are important determinants of conflict onset and that nonpecuniary opportunity costs should be taken into account. This article concludes by noting that cost–benefit analyses of public health interventions should include decreases in the probability of civil war, and the attendant benefits in terms of lives saved and material damage prevented, in their calculations.


2013 ◽  
Vol 36 (6) ◽  
pp. 702-702 ◽  
Author(s):  
Antoinette Nicolle ◽  
Kevin Riggs

AbstractKurzban et al.'s opportunity cost model of mental effort relies heavily on counterfactual thinking. We suggest that a closer inspection of the role of counterfactual emotions, and particularly of action/inaction asymmetries in anticipated regret, may be important in understanding the role of opportunity costs in decisions to persist with a current task.


2013 ◽  
Vol 36 (6) ◽  
pp. 661-679 ◽  
Author(s):  
Robert Kurzban ◽  
Angela Duckworth ◽  
Joseph W. Kable ◽  
Justus Myers

AbstractWhy does performing certain tasks cause the aversive experience of mental effort and concomitant deterioration in task performance? One explanation posits a physical resource that is depleted over time. We propose an alternative explanation that centers on mental representations of the costs and benefits associated with task performance. Specifically, certain computational mechanisms, especially those associated with executive function, can be deployed for only a limited number of simultaneous tasks at any given moment. Consequently, the deployment of these computational mechanisms carries an opportunity cost – that is, the next-best use to which these systems might be put. We argue that the phenomenology of effort can be understood as the felt output of these cost/benefit computations. In turn, the subjective experience of effort motivates reduced deployment of these computational mechanisms in the service of the present task. These opportunity cost representations, then, together with other cost/benefit calculations, determine effort expended and, everything else equal, result in performance reductions. In making our case for this position, we review alternative explanations for both the phenomenology of effort associated with these tasks and for performance reductions over time. Likewise, we review the broad range of relevant empirical results from across sub-disciplines, especially psychology and neuroscience. We hope that our proposal will help to build links among the diverse fields that have been addressing similar questions from different perspectives, and we emphasize ways in which alternative models might be empirically distinguished.


Author(s):  
Humoud Alsabah ◽  
Agostino Capponi ◽  
Octavio Ruiz Lacedelli ◽  
Matt Stern

Abstract We introduce a reinforcement learning framework for retail robo-advising. The robo-advisor does not know the investor’s risk preference but learns it over time by observing her portfolio choices in different market environments. We develop an exploration–exploitation algorithm that trades off costly solicitations of portfolio choices by the investor with autonomous trading decisions based on stale estimates of investor’s risk aversion. We show that the approximate value function constructed by the algorithm converges to the value function of an omniscient robo-advisor over a number of periods that is polynomial in the state and action space. By correcting for the investor’s mistakes, the robo-advisor may outperform a stand-alone investor, regardless of the investor’s opportunity cost for making portfolio decisions.


2015 ◽  
Vol 13 (03) ◽  
Author(s):  
Romeo Fersi Mongdong ◽  
Jenny Morasa ◽  
Heince Wokas

The business world today is characterized by increasing competition among existing companies. Competition occurs in all sectors of the economy both industry, trade, and services. One of the decisions that must be taken in planning at every alternative is to buy or produce itself a component of raw materials. Differential cost are related to the opportunity cost, which is the differential cost incurred costs as a result of certain decisions while the opportunity cost is the cost incurred when choosing a decision. The purpose of this study to analyze the differential costs and opportunity costs in the decision to buy or produce their own on Industri Rumah Panggung Woloan. The analytical method used is descreptive quantitative. Result of the differential cost analysis showed that the right decisions can be taken by the management company the manufactures its own because getting a hihgter differential gain, compared to buying from outside. While the opportunity cost of the buying raw materials from outside is more profitable, thus producing itself becomes more expensive. Should the leadership Industri Rumah Panggung Woloan produce their own wood from the outside becauseit would be more adventageous, compared to taking wood there are kept alone.


10.37236/8322 ◽  
2019 ◽  
Vol 26 (1) ◽  
Author(s):  
Madeline Crews ◽  
Brant Jones ◽  
Kaitlyn Myers ◽  
Laura Taalman ◽  
Michael Urbanski ◽  
...  

The game of best choice, also known as the secretary problem, is a model for sequential decision making with many variations in the literature. Notably, the classical setup assumes that the sequence of candidate rankings is uniformly distributed over time and that there is no expense associated with the candidate interviews. Here, we weight each ranking permutation according to the position of the best candidate in order to model costs incurred from conducting interviews with candidates that are ultimately not hired. We compare our weighted model with the classical (uniform) model via a limiting process. It turns out that imposing even infinitesimal costs on the interviews results in a probability of success that is about 28%, as opposed to 1/e (about 37%) in the classical case.


Author(s):  
Ahdiyat Agus Susila

Often risks arise because of more than one choice and the impact of each option is not yet known for certain, as uncertain future. There is always an opportunity cost that follows every option taken. Thus, risks may be defined as the consequences of uncertain options that have the potential to lead to unexpected outcomes or other adverse impacts to decision makers. This is the classic definition of risk. From this definition, risk contains several dimensions, namely opportunity costs, potential losses or other negative impacts, uncertainty, and obtaining results that do not match expectations. It is with these demands that risks are measured, mitigated and monitored during the business process.  


Sign in / Sign up

Export Citation Format

Share Document