scholarly journals To predict human choice, consider the context

2021 ◽  
Author(s):  
Ori Plonsky ◽  
Ido Erev
Keyword(s):  
Prospect Theory ◽  
Cognitive Processes ◽  
Predictive Accuracy ◽  
Human Choice

Choice prediction competitions suggest that popular models of choice, including prospect theory, have low predictive accuracy. Peterson et al. show the key problem lies in assuming each alternative is evaluated in isolation, independently of the context. This observation demonstrates how a focus on predictions can promote understanding of cognitive processes.

scholarly journals Applied prospect theory: assessing the βs of M&A-intensive firms

2019 ◽  
Vol 16 (2) ◽  
pp. 236-248
Author(s):  
Garth Ryan Homan ◽  
Gary van Vuuren
Keyword(s):  
Kalman Filter ◽  
Prospect Theory ◽  
Risk Premium ◽  
Utility Theory ◽  
Human Error ◽  
Cognitive Biases ◽  
Predictive Accuracy ◽  
Market Price ◽  
Expected Utility Theory ◽  
Specific Risk

Behavioral components of Kahneman and Tversky’s (1979) prospect theory (PT) were applied to derive an adjusted Capital Asset Pricing Model (CAPM) in the estimation of merger and acquisition-intensive firms’ expected returns. The premise was that the CAPM – rooted in expected utility theory – is violated by the behavioral biases identified in prospect theory. Kahneman and Tversky’s prospect theory (1979) has demonstrated that weaknesses abound in the viability of classical utility theory predictions. For mergers and acquisitions, firms appear to be isolated from and immune to human error, yet decisions which involve the undertaking of capital-intensive projects are delegated to senior management. These individuals are prone to cognitive biases and personalized risk appetites that may (and often do) compromize attitudes and behavior when it comes to pricing risky ventures. Having established that beta estimates using linear regression are inferior, the CAPM was implemented utilizing beta estimates obtained from the Kalman filter. The results obtained were assessed for their long-term market price predictive accuracy. The authors test the reliability of the CAPM as a predictor of price, observe the rationality of human behavior in capital markets, and attempt to model premiums to adjust CAPM returns to a level that more appropriately accounts for firm specific risk. The researchers show that market participants behave irrationally when assessing M&A firms’ specific risk. Logistic regression coupled with the development of a risk premium was implemented to correct the original Kalman filter returns and was tested for improvements in predictive power.

scholarly journals Advancing Methods and Mathematical Models of Perceptual Decision Making

2017 ◽  
Author(s):  
Gabriel Tillman
Keyword(s):  
Decision Making ◽  
Cognitive Processes ◽  
Model Comparison ◽  
Predictive Accuracy ◽  
Sequential Sampling ◽  
Estimation Methods ◽  
Choice Response ◽  
Perceptual Decision Making ◽  
Perceptual Decision ◽  
Sequential Sampling Models

In this thesis I argue that cognitive psychologists can use the combination of sequential sampling models, Bayesian estimation methods, and model comparison via predictive accuracy to investigate underlying cognitive processes of perceptual decision-making. I show that sequential sampling models of simple and choice response time allow for researchers to analyze behavioral data and translate them into the constitute components of processing, such as speed of processing, response caution, and the time needed for perceptual encoding and overt motor responses. I use these methods and models to investigate underlying mental processes related to cognitive load, speech perception, and lexical decision-making. I also show that using different sequential sampling models to analyze the same data can lead researchers to draw different conclusions about cognitive processes, which serves as a caution for carelessly using these models. I also present a novel method that researchers can use to observe cognitive processes unfold online during perceptual decision-making tasks. I then discuss a promising collaboration emerging between researchers in the field of mathematical modeling and neuroscience.

Elaborating the role of reflection and individual differences in the study of folk-economic beliefs

2018 ◽  
Vol 41 ◽  
Author(s):  
Kevin Arceneaux
Keyword(s):  
Decision Making ◽  
Individual Differences ◽  
Cognitive Processes ◽  
Evolutionary History ◽  
Behavioral Responses ◽  
History Of ◽  
Economic Beliefs

AbstractIntuitions guide decision-making, and looking to the evolutionary history of humans illuminates why some behavioral responses are more intuitive than others. Yet a place remains for cognitive processes to second-guess intuitive responses – that is, to be reflective – and individual differences abound in automatic, intuitive processing as well.

A cognitive approach to cumulative technological culture is useful and necessary but only if it also applies to other species

2020 ◽  
Vol 43 ◽  
Author(s):  
Thibaud Gruber
Keyword(s):  
Social Learning ◽  
Cognitive Processes ◽  
Learning Processes ◽  
Cognitive Approach ◽  
Technological Culture ◽  
Social Learning Processes

Abstract The debate on cumulative technological culture (CTC) is dominated by social-learning discussions, at the expense of other cognitive processes, leading to flawed circular arguments. I welcome the authors' approach to decouple CTC from social-learning processes without minimizing their impact. Yet, this model will only be informative to understand the evolution of CTC if tested in other cultural species.

847: Institutional Variability in Predictive Accuracy of Urinary Cytology for Prediction of Transitional Cell Carcinoma Recurrence

2005 ◽  
Vol 173 (4S) ◽  
pp. 230-230
Author(s):  
Serge Benayoun ◽  
Shahrokh F. Shariat ◽  
Paul Perrotte ◽  
Martin G. Friedrich ◽  
Craig D. Zippe ◽  
...  
Keyword(s):  
Transitional Cell Carcinoma ◽  
Cell Carcinoma ◽  
Predictive Accuracy ◽  
Transitional Cell ◽  
Urinary Cytology

Reaction Time and Brain Waves in Omitted Stimulus Tasks

2010 ◽  
Vol 24 (1) ◽  
pp. 1-6 ◽  
Author(s):  
Oscar H. Hernández ◽  
Muriel Vogel-Sprott
Keyword(s):  
Reaction Time ◽  
Cognitive Processes ◽  
Young Male ◽  
Event Related Potential ◽  
Auditory Stimuli ◽  
Motor Action ◽  
Cognitive Component ◽  
Sensory Modalities ◽  
Two Measures ◽  
Somatosensory Stimuli

A missing stimulus task requires an immediate response to the omission of a regular recurrent stimulus. The task evokes a subclass of event-related potential known as omitted stimulus potential (OSP), which reflects some cognitive processes such as expectancy. The behavioral response to a missing stimulus is referred to as omitted stimulus reaction time (RT). This total RT measure is known to include cognitive and motor components. The cognitive component (premotor RT) is measured by the time from the missing stimulus until the onset of motor action. The motor RT component is measured by the time from the onset of muscle action until the completion of the response. Previous research showed that RT is faster to auditory than to visual stimuli, and that the premotor of RT to a missing auditory stimulus is correlated with the duration of an OSP. Although this observation suggests that similar cognitive processes might underlie these two measures, no research has tested this possibility. If similar cognitive processes are involved in the premotor RT and OSP duration, these two measures should be correlated in visual and somatosensory modalities, and the premotor RT to missing auditory stimuli should be fastest. This hypothesis was tested in 17 young male volunteers who performed a missing stimulus task, who were presented with trains of auditory, visual, and somatosensory stimuli and the OSP and RT measures were recorded. The results showed that premotor RT and OSP duration were consistently related, and that both measures were shorter with respect to auditory stimuli than to visual or somatosensory stimuli. This provides the first evidence that the premotor RT is related to an attribute of the OSP in all three sensory modalities.

Do Event-Related Brain Potentials Reflect Mental (Cognitive) Operations?

2002 ◽  
Vol 16 (3) ◽  
pp. 129-149 ◽  
Author(s):  
Boris Kotchoubey
Keyword(s):  
Cognitive Processes ◽  
Point Of View ◽  
Internal Variables ◽  
Brain Potentials ◽  
Cognitive Operations ◽  
External Variables ◽  
Series Of Experiments ◽  
Mental Operations ◽  
A Chain ◽  
Processing Mechanisms

Abstract Most cognitive psychophysiological studies assume (1) that there is a chain of (partially overlapping) cognitive processes (processing stages, mechanisms, operators) leading from stimulus to response, and (2) that components of event-related brain potentials (ERPs) may be regarded as manifestations of these processing stages. What is usually discussed is which particular processing mechanisms are related to some particular component, but not whether such a relationship exists at all. Alternatively, from the point of view of noncognitive (e. g., “naturalistic”) theories of perception ERP components might be conceived of as correlates of extraction of the information from the experimental environment. In a series of experiments, the author attempted to separate these two accounts, i. e., internal variables like mental operations or cognitive parameters versus external variables like information content of stimulation. Whenever this separation could be performed, the latter factor proved to significantly affect ERP amplitudes, whereas the former did not. These data indicate that ERPs cannot be unequivocally linked to processing mechanisms postulated by cognitive models of perception. Therefore, they cannot be regarded as support for these models.

Inefficient Encoding as an Explanation for Age-Related Deficits in Recollection-Based Processing

2014 ◽  
Vol 28 (3) ◽  
pp. 148-161 ◽  
Author(s):  
David Friedman ◽  
Ray Johnson
Keyword(s):  
Older Adults ◽  
Young Adults ◽  
Cognitive Processes ◽  
Brain Activity ◽  
Memory Performance ◽  
Brain Regions ◽  
Semantic Retrieval ◽  
Age Related ◽  
The Face ◽  
Episodic Memories

A cardinal feature of aging is a decline in episodic memory (EM). Nevertheless, there is evidence that some older adults may be able to “compensate” for failures in recollection-based processing by recruiting brain regions and cognitive processes not normally recruited by the young. We review the evidence suggesting that age-related declines in EM performance and recollection-related brain activity (left-parietal EM effect; LPEM) are due to altered processing at encoding. We describe results from our laboratory on differences in encoding- and retrieval-related activity between young and older adults. We then show that, relative to the young, in older adults brain activity at encoding is reduced over a brain region believed to be crucial for successful semantic elaboration in a 400–1,400-ms interval (left inferior prefrontal cortex, LIPFC; Johnson, Nessler, & Friedman, 2013 ; Nessler, Friedman, Johnson, & Bersick, 2007 ; Nessler, Johnson, Bersick, & Friedman, 2006 ). This reduced brain activity is associated with diminished subsequent recognition-memory performance and the LPEM at retrieval. We provide evidence for this premise by demonstrating that disrupting encoding-related processes during this 400–1,400-ms interval in young adults affords causal support for the hypothesis that the reduction over LIPFC during encoding produces the hallmarks of an age-related EM deficit: normal semantic retrieval at encoding, reduced subsequent episodic recognition accuracy, free recall, and the LPEM. Finally, we show that the reduced LPEM in young adults is associated with “additional” brain activity over similar brain areas as those activated when older adults show deficient retrieval. Hence, rather than supporting the compensation hypothesis, these data are more consistent with the scaffolding hypothesis, in which the recruitment of additional cognitive processes is an adaptive response across the life span in the face of momentary increases in task demand due to poorly-encoded episodic memories.

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