Vigor and aspiration levels in neuroeconomics

2021 ◽  
Vol 44 ◽  
Author(s):  
Antonio Mastrogiorgio

Abstract In this contribution, we criticize the demanding assumption of vigor that economic agents are maximizers. We discuss the link between vigor and subjective value through the alternative notion of aspiration levels, arguing that vigor can help articulate the ecological balance – central in bounded and ecological rationality – between minimum expected reward (aspiration level) and the efforts made for its attainment.

2014 ◽  
Vol 25 (07) ◽  
pp. 1450025 ◽  
Author(s):  
Yu Peng ◽  
Xu-Wen Wang ◽  
Qian Lu ◽  
Qing-Ke Zeng ◽  
Bing-Hong Wang

In the light of the prospect theory (PT), we study the prisoner's dilemma game (PDG) on square lattice by integrating the deterministic and Data envelopment analysis (DEA) efficient rule into adaptive rules: the individual will change evolutionary rule and migrate if its payoff is lower than their aspiration levels. Whether the individual choose to change the evolutionary rule and migrate is determined by the relation between its payoff and aspiration level. The results show that the cooperation frequency can hold unchange with the increasing of temptation to defect. The individual chooses to adopt DEA efficient rule and to migrate that can induce the emergence of cooperation as the payoff is lower than its aspiration.


2019 ◽  
Vol 45 (1) ◽  
pp. 18-29
Author(s):  
Burak Cem Konduk

This study investigates whether and how the impact of drivers of aspiration levels changes across the cases of consistent and inconsistent performance feedback within the context of a retailer. Analysis of internal corporate data shows that while past aspiration level and performance–aspiration gap positively influence the current aspiration level in the case of inconsistent feedback, performance feedback consistency changes only the impact of performance relative to peers. This study replicates past research in a different industry and country due to limited empirical evidence, introduces real-world complexity into aspiration theory, pinpoints performance–aspiration gap as the primary performance feedback, introduces a new sign for the impact of performance relative to peers, and reconciles its previously detected mixed impact. The findings suggest that organizational attention has an inward focus in the case of inconsistent feedback. The results also point out that leaders can trigger change through a performance outcome that lags behind the corresponding aspiration level rather than the performance of peers and eventually move their organizations toward high performance targets by starting with feasible rather than stretch goals.


1984 ◽  
Vol 78 (2) ◽  
pp. 356-371 ◽  
Author(s):  
Gregory W. Fischer ◽  
Mark S. Kamlet

This article develops a new statistical model of trade-offs among defense, nondefense, and fiscal policy concerns as they are reflected in the presidential budgetary process. The Competing Aspiration Levels Model (CALM) builds on Crecine's (1971) “Great Identity” argument. Unlike most previous attempts to model presidential budgeting, CALM explicitly represents the interdependence of decisions about defense, nondefense, and total federal expenditures. CALM models this interdependence as the result of the interaction of minimal aspirations for defense and nondefense expenditures with a maximum acceptable level of expenditures from a fiscal policy standpoint. Statistical analyses of presidential budgets for the fiscal years from 1955 through 1980 provide strong support for the CALM formulation. Substantively, the results indicate that fiscal constraints on total expenditures have progressively weakened, that the maximum acceptable expenditure level has generally exceeded the minimal expenditure aspiration level, and that when a potential “fiscal surplus” has existed, the nondefense sector has been more successful in capturing a share of this surplus than the defense sector. In keeping with traditional incrementalist arguments, the results indicate that previous year expenditure levels provide a relatively secure “budgetary base” for both the defense and nondefense sectors. Both sectors tend to receive their minimal aspiration levels plus a share of whatever fiscal surplus exists. The analysis also indicates that the executive branch has not been as strong a direct force for budgetary growth as Congress.


2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Kavitha Ranganathan

PurposeThe role of personal value systems as antecedents to risk has been largely ignored. Following Gigerenzer's view of ecological rationality, the authors argue an individual's personal value system serves as concrete motivations that guide risky choices and facilitate adaptation to one's environment.Design/methodology/approachThe authors elicit risk attitudes using a satisficing-based risk elicitation method that exploits the idea of worst-case aspiration or minimum portfolio returns given a portfolio comprising a safe and risky prospect. The elicited worst-case aspiration allows for more descriptive and natural ways of characterizing attitudes to risk (i.e. satisficing measures of risk). Using the Schwartz Value Survey, the authors assess the relative importance individuals place on value systems, such as personal focus versus social focus. The authors argue that preference to value systems has linkages with the worst-case aspiration setting emphasized in the satisficing task.FindingsThis study’s findings suggest that individuals who are willing to give up higher potential returns to protect their downside risk (by setting higher worst-case aspiration) are positively associated with personal focus—concern about own outcomes than social focus—concern about the outcomes for others or established institutions.Research limitations/implicationsCurrently, the study’s setting is in the domain of financial decision-making. Going forward, milestones could be set for studying risky real-world choices by simply changing the risk measure in different contexts, such as job choices, education, health and social interactions.Originality/valueThis study contributes to the discussion on the psychometric structure of risk. Prescriptive benefits of satisficing as a positive heuristic, which is interpreted as setting achievable goals or aspiration levels, are extensive and recognized in various industries ranging from agriculture, airlines, insurance to financial advising. More recently, cognitive processes, such as emotions and personal value systems, are recognized as a type of social cognition that subserve heuristic functions that can guide behavior quickly and accurately.


Author(s):  
Joanna Sokolowska

The experiments discussed here are aimed at determining whether risk perception and risk acceptance are two distinct psychological processes. This study is motivated by the idea of a double‐criterion model of choice. In particular, in line with risk‐value (R‐V) models, in which risk is treated as a primitive, it is tested whether risk is independent of aspirations and whether preferences depend on aspirations. In two experiments, 305 university students were presented with pairs of risky projects and were asked to compare their riskiness and select one. The aspiration level, defined as the target return on the project, was set through an explicit instruction. In Experiment 1, a within‐subject design was applied, and thus aspirations were set at two different levels. In Experiment 2, with a between‐subject design, two different aspiration levels were set for each group. The results indicate that risk ordering is insensitive to changes in aspirations, but preferences are sensitive to those changes. This supports distinctness of risk perception and risk acceptance. The findings are discussed in terms of the CPT and SP/A models and the R‐V approach. It appears that double‐criterion models provide better and psychologically sounder predictions of subjects' preferences.


2018 ◽  
Vol 4 (2) ◽  
pp. 55-67
Author(s):  
Tek Narayan Poudel ◽  
Ram Krishna Maharjan

Aspiration levels play an important role in everyday decision making. In practice, however, decisions are not based on an aspiration level alone. The aspiration level and the overall probabilities of success and failure may receive special attention, but subjects will not be completely insensitive to difference within the classes of gains and losses. Aspirations have a significant impact on pupil attainment net of family background and other individual factors, but their effect is reduced when examining pupil progression. Some students, particularly from low-income or first-generation backgrounds, in spite of having high aspirations fail to meet their goals to attend college. Aspiration is a strong desire to achieve something in life. Every people they want to be successful man in life, they want famous, popular in society, so aspiration has vague meaning and sense. In this research student of Nepal they have high aspiration in life. Some of they want social worker, doctor, pilot engineer, great motivator and great leader in future. The study was conducted among the 511 students of grade ten students of three districts of Nepal.


Author(s):  
O.M. Reva ◽  
K. А. Androsovych ◽  
S. V. Radetska ◽  
Ye. A. Burdelna

The appearance of synergistic effect in the humanist (by L. Zade definition) educational systems according to known Hegelian law should be accompanied by quantitative and qualitative transformations of certain indicators characterizing the human factors influence on decision making. It is proved that such indicators are basic educatio- nal dominants which determine the attitude towards risk and characterize the motivation to achieve success (risk-- taking) / failure avoidance (risk aversion) and the aspiration level, which is one of personality backbone factors and characterize the self-assessment adequacy. Basic educational dominants are found through the solution of the closed decision-making task by constructing a limited points number (five) and further analysis of the estimated utility function of the 12-point scale continuum. Characteristic points of this function are the so-called determined lottery equivalents with corresponding utility n0,25, n0,5, n0,75.The aspiration levels are found through the open decision-making problem solution by constructing on a formal- ly unlimited number of points and further utility function analysis of the 12-point scale continuum. Characteristic points of the estimation function: n– the education result, which corresponds to the negative jump of usefulness in the imagination of those, who study on the acceptability of a particular level of the scale; n0 — the education result, which corresponds to the transition from a negative to a positive perception ratings of the scale; n* is the learning outcome that corresponds to the maximum positive jump of usefulness in the perception of a certain mark on the scale, which in this case is considered as the aspiration level. The m = 208 ninth-graders set the ratio of people who are vulnerable, indifferent and risk-taking in the proportion: VUL: IND: RT  1: 2.27: 10.6.By the prioritization method it was dephased a qualitative rank estimates of 12-point scale giving them corresponding weighted coefficients of significance. Students’ aspiration levels identity regardless of attitude to risk is established, as well as greater consistency of opinions of those tested regarding the acceptability of higher scale scores. Charac- teristic points’ correlation analysis of the utility functions constructed for closed and open decision-making problems revealed a statistically probable relationship between the characteristic points: n0,25–n–, n0,5–n0, n0,75–n*.


2021 ◽  

Performance Feedback Theory (PFT) is a scholarly field that examines how organizations respond to feedback on their performance. Other keywords used by researchers in this area include “adaptive aspirations,” “attainment discrepancy,” “organizational learning from performance feedback,” “performance aspiration,” or a more generic label like a “behavioral theory/approach/perspective.” The origin of PFT can be found in the Carnegie School approach. PFT explicitly and predominantly positions itself as part of the “Behavioral Theory of the Firm” (BTOF). PFT shares many of the same foundational ideas and continues to be influenced by other strands of BTOF scholarship. The main concepts in this theory are performance feedback, aspiration levels, and responses or responsiveness. Aspiration level refers to the minimum level of performance deemed satisfactory by a decision maker, and, thus, it serves as the benchmark against which to evaluate performance. Two types of aspiration levels are common: historical ones, which are based on the organization’s own prior performance, and social ones, which are based on the performance of comparable peer organizations, usually all other firms active in a focal firm’s industry. The comparison of actual performance with aspiration levels constitutes performance feedback. Depending on whether performance feedback is favorable, i.e., exceeds a particular aspiration level being examined, PFT predicts different responses and levels of responsiveness. Commonly, predictions and findings indicate responses that diverge from previous firm actions and greater responsiveness in any area of firm activity where performance is below the aspiration level. Such responses includes a wide range of strategic and operational choices, such as new market entry, investment in fixed assets, research and development (R&D) spending, innovation adoption, and so on. In fact, as PFT continues to develop and gain in popularity, the range of firm and decision maker behaviors linked to performance feedback has greatly increased. While consensus is widespread on the core of the theory, PFT scholarship is still developing. Discussions are ongoing on the extent to which its main predictions apply universally, irrespective of the type of organization examined, the performance measure used, and the type of aspiration level considered. Specifically, research efforts are examining what boundary conditions limit the applicability of PFT’s predictions and which contingencies modify them and, thus, should be included as moderators in PFT models.


2021 ◽  
Vol 8 (2) ◽  
pp. 40-58
Author(s):  
Timbate Lukas

The current study examines whether performance discrepancy from the aspiration level affects corporate tax avoidance. Prior studies show that performance discrepancies from the aspiration level significantly affect firms' behavior; thus, it is important to examine whether such discrepancies affect corporate tax avoidance. Based on the behavioral theory of the firm (BTOF), this study posits that firms performing below the aspiration levels avoid more taxes in the subsequent period than other firms. Empirical findings using data from a sample of U.S. firms for the period covering 1993-2016 support the hypothesis. The findings also show that, while there is a difference among firms meeting or beating the aspiration level, there is no statistically significant difference in tax avoidance level among firms performing short of their aspiration level. The study contributes to the existing literature by providing additional evidence extending the scope of literature in BTOF and tax avoidance areas.


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