Complex biological systems build up temporal expectations to facilitate adaptive responses to environmental events, in order to minimise costs associated with incorrect responses, and maximise the benefits of correct responses. In the lab, this is clearly demonstrated in tasks which show faster response times when the period between warning (S1) and target stimulus (S2) on the previous trial was short and slower when the previous trial foreperiod was long. The mechanisms driving such higher order effects in temporal preparation paradigms are still under debate, with key theories proposing that either i) the foreperiod leads to automatic modulation of the arousal system which influences responses on the subsequent trial, or ii) that exposure to a foreperiod results in the creation of a memory trace which is used to guide responses on the subsequent trial. Here we provide data which extends the evidence base for the memory accounts, by showing that previous foreperiod exposures are cumulative with reaction times shortening after repeated exposures; whilst also demonstrate that the higher order effects associated with a foreperiod remain active for several trials.
Higher Order Effects in Asset Pricing Models with Long‐Run Risks
