A core proposition in economics is that voluntary exchanges benefit both parties. We show that people often deny the mutually beneficial nature of exchange, instead espousing the belief that one or ...both parties fail to benefit from the exchange. Across four studies (and 8 further studies in the online supplementary materials), participants read about simple exchanges of goods and services, judging whether each party to the transaction was better off or worse off afterward. These studies revealed that win-win denial is pervasive, with buyers consistently seen as less likely to benefit from transactions than sellers. Several potential psychological mechanisms underlying win-win denial are considered, with the most important influences being mercantilist theories of value (confusing wealth for money) and theory of mind limits (failing to observe that people do not arbitrarily enter exchanges). We argue that these results have widespread implications for politics and society.
Conviction Narrative Theory (CNT) is a theory of choice under
- situations where outcomes cannot be enumerated and probabilities cannot be assigned. Whereas most theories of choice assume that people ...rely on (potentially biased) probabilistic judgments, such theories cannot account for adaptive decision-making when probabilities cannot be assigned. CNT proposes that people use
- structured representations of causal, temporal, analogical, and valence relationships - rather than probabilities, as the currency of thought that unifies our sense-making and decision-making faculties. According to CNT, narratives arise from the interplay between individual cognition and the social environment, with reasoners adopting a narrative that feels "right" to explain the available data; using that narrative to imagine plausible futures; and affectively evaluating those imagined futures to make a choice. Evidence from many areas of the cognitive, behavioral, and social sciences supports this basic model, including lab experiments, interview studies, and econometric analyses. We identify 12 propositions to explain how the mental representations (narratives) interact with four inter-related processes (explanation, simulation, affective evaluation, and communication), examining the theoretical and empirical basis for each. We conclude by discussing how CNT can provide a common vocabulary for researchers studying everyday choices across areas of the decision sciences.
Abstract
‘Compartmental models’ of epidemics are widely used to forecast the effects of communicable diseases such as COVID-19 and to guide policy. Although it has long been known that such processes ...take place on social networks, the assumption of ‘random mixing’ is usually made, which ignores network structure. However, ‘super-spreading events’ have been found to be power-law distributed, suggesting that the underlying networks may be scale free or at least highly heterogeneous. The random-mixing assumption would then produce an overestimation of the herd-immunity threshold for given
R
0
; and a (more significant) overestimation of
R
0
itself. These two errors compound each other, and can lead to forecasts greatly overestimating the number of infections. Moreover, if networks are heterogeneous and change in time, multiple waves of infection can occur, which are not predicted by random mixing. A simple SIR model simulated on both Erdős–Rényi and scale-free networks shows that details of the network structure can be more important than the intrinsic transmissibility of a disease. It is therefore crucial to incorporate network information into standard models of epidemics.
Can an idea be beautiful? Mathematicians often describe arguments as “beautiful” or “dull,” and famous scientists have claimed that mathematical beauty is a guide toward the truth. Do laypeople, like ...mathematicians and scientists, experience mathematics aesthetically? Three studies suggest that they do. When people rated the similarity of simple mathematical arguments to landscape paintings (Study 1) or pieces of classical piano music (Study 2), their similarity rankings were internally consistent across participants. Moreover, when participants rated beauty and various other potentially aesthetic dimensions for artworks and mathematical arguments, they relied mainly on the same three dimensions for judging beauty—elegance, profundity, and clarity (Study 3). These aesthetic judgments, made separately for artworks and arguments, could be used to predict similarity judgments out-of-sample. These studies also suggest a role for expertise in sharpening aesthetic intuitions about mathematics. We argue that these results shed light on broader issues in how and why humans have aesthetic experiences of abstract ideas.
•Donations of time are seen as more virtuous than donations of money.•This occurs despite people’s (correct) belief that money-donations help more people.•The effect is driven by the perception that ...time-donors are more emotionally invested.•These judgments influence interpersonal attraction and donor behavior.•The findings support reputation-signaling accounts of prosocial behavior.
Prosocial acts typically take the form of time- or money-donations. Do third-parties differ in how they evaluate these different kinds of donations? Here, we show that people view time-donations as more morally praiseworthy and more diagnostic of moral character than money-donations, even when the resource investment is comparable. This moral preference occurs because people perceive time-donations as signaling greater emotional investment in the cause and therefore better moral character; this occurs despite the (correct) belief that time-donations are typically less effective than money-donations (Study 1). This effect in turn is explained by two mechanisms: People believe that time-donations are costlier even when their objective costs are equated, which happens because people rely on a lay theory associating time with the self (Study 2). The more signaling power of time-donations has downstream implications for interpersonal attractiveness in a dating context (Study 3A), employment decisions (Study 3B), and donor decision-making (Study 3). Moreover, donors who are prompted with an affiliation rather (versus dominance) goal are likelier to favor time-donations (Study 4). However, reframing money-donations in terms of time (e.g., donating a week’s salary) reduced and even reversed these effects (Study 5). These results support theories of prosociality that place reputation-signaling as a key motivator of moral behavior. We discuss implications for the charity market and for social movements, such as effective altruism, that seek to maximize the social benefit of altruistic acts.
We are all saints and sinners: Some of our actions benefit others, while other actions lead to harm. How do people balance moral rights against moral wrongs when evaluating others' actions? Across 9 ...studies, we contrast the predictions of three conceptions of intuitive morality—outcome-based (utilitarian), act-based (deontologist), and person-based (virtue ethics) approaches. These experiments establish four principles: Partial offsetting (good acts can partly offset bad acts), diminishing sensitivity (the extent of the good act has minimal impact on its offsetting power), temporal asymmetry (good acts are more praiseworthy when they come after harms), and act congruency (good acts are more praiseworthy to the extent they offset a similar harm). These principles are difficult to square with utilitarian or deontological approaches, but sit well within person-based approaches to moral psychology. Inferences about personal character mediated many of these effects (Studies 1–4), explained differences across items and across individuals (Studies 5–6), and could be manipulated to produce downstream consequences on blame (Studies 7–9); however, there was some evidence for more modest roles of utilitarian and deontological processing too. These findings contribute to conversations about moral psychology and person perception, and may have policy and marketing implications.
•How do people make moral judgments about combinations of right and wrong acts?•We show four moral accounting principles—partial offsetting, diminishing sensitivity, temporal asymmetry, act congruency.•These principles conflict with both utilitarian and deontological accounts of morality.•Instead, these principles flow from how people evaluate moral character.
Humans are often characterized as Bayesian reasoners. Here, we question the core Bayesian assumption that probabilities reflect degrees of belief. Across eight studies, we find that people instead ...reason in a digital manner, assuming that uncertain information is either true or false when using that information to make further inferences. Participants learned about 2 hypotheses, both consistent with some information but one more plausible than the other. Although people explicitly acknowledged that the less-plausible hypothesis had positive probability, they ignored this hypothesis when using the hypotheses to make predictions. This was true across several ways of manipulating plausibility (simplicity, evidence fit, explicit probabilities) and a diverse array of task variations. Taken together, the evidence suggests that digitization occurs in prediction because it circumvents processing bottlenecks surrounding people's ability to simulate outcomes in hypothetical worlds. These findings have implications for philosophy of science and for the organization of the mind.
Narrative expectations in financial forecasting Johnson, Samuel G. B.; Tuckett, David
Journal of behavioral decision making,
January 2022, 2022-01-00, 20220101, Letnik:
35, Številka:
1
Journal Article
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How do people form expectations about the future? We use amateur and expert investors' expectations about financial asset prices to study this question. Three experiments contrast the rational ...expectations assumption from neoclassical economics (investors forecast according to neoclassical financial theory) against two psychological theories of expectation formation—behaviorally informed expectations (investors understand empirical market anomalies and expect these anomalies to occur) and narrative expectations (investors use narrative thinking to predict future prices). Whereas neoclassical financial theory maintains that past public information cannot be used to predict future prices, participants used company performance information revealed before a base price quotation to project future price trends after that quotation (Experiment 1), contradicting rational expectations. Importantly, these projections were stronger when information concerned predictions about a company's future performance rather than actual data about its past performance, suggesting that people not only rely on financially irrelevant (but narratively relevant) information for making predictions but erroneously impose temporal order on that information. These biased predictions had downstream consequences for asset allocation choices (Experiment 2), and these choices were driven in part by affective reactions to the company performance news (Experiment 3). There were some mild effects of expertise, but overall the effects of narrative appear to be consistent across all levels of expertise studied, including professional financial analysts. We conclude by discussing the prospects for a narrative theory of choice that provide new microfoundational insights about economic behavior.
Studies into the mechanism of 8-aminoquinoline-directed nickel-catalyzed C(sp3)–H arylation with iodoarenes were carried out, to determine the catalyst resting state and optimize catalytic ...performance. Paramagnetic complexes undergo the key C–H activation step. The ubiquitous base Na2CO3 is found to hinder catalysis; replacement of Na2CO3 with NaO t Bu gave improved catalytic turnovers under milder conditions. Deprotonation of the 8-aminoquinoline derivative N-(quinolin-8-yl)pivalamide (1a) at the amide nitrogen using NaH, followed by reaction with NiCl2(PPh3)2 allowed for the isolation of complex Ni(AQpiv-κN,N)2 (3) with chelating N-donors (where AQpiv = C9NH6NCO t Bu). Complex 3 is a four-coordinate disphenoidal high-spin Ni(II) complex, excluding short anagostic Ni-- t Bu hydrogen interactions. Complex 3 reacts with the paddle-wheel Ph3PNi(μ-CO2 t Bu)22 (6·PPh 3 ) or t BuCO2H to give insoluble {AQpivNi(O2C t Bu)}2 (5). Dissolution of 5 in donor solvents L (L= DMSO and DMF) gave a paramagnetic intermediate assigned by NMR as AQpivNi(O2C t Bu)L (5·L) and equilibrium reformation of 3 and 6·L. DFT calculations support this equilibrium in solution. Both 3 and 5 undergo C–H activation at temperatures as low as 80 °C and in the presence of PR3 (PR3 = PPh3, P i Bu3) to give Ni(C9NH6NCOCMe2CH2-κN,N,C)PR3 (7·PR 3 ). The C–H functionalization reaction orders with respect to 7·P i Bu 3 , iodoarenes, and phosphines were determined. Hammett analysis using electronically different aryl iodides suggests a concerted oxidative addition mechanism for the C–H functionalization step; DFT calculations were also carried out to support this finding. When Na2CO3 is used as the base, the rate determination step for C–H functionalization appears to be 8-aminoquinoline deprotonation and binding to Ni. The carbonate anion was also observed to provide a deleterious NMR-inactive low-energy off-cycle resting state in catalysis. Replacement of Na2CO3 with NaO t Bu improved catalysis at milder conditions and made carboxylic acid and phosphine additives unnecessary. Complex 3 and its functionalized analogues were observed as the catalyst resting state under these conditions.
Consumers are often shown investment returns with high levels of precision, which could lead them to misunderstand the inherent uncertainty. We test whether consumers are drawn to precision-that is ...offset the uncertainty in investment decisions by over-relying on precise numerical information. Five incentivized experiments compared decisions when expected growth is presented in precise forecasts as opposed to ranges. Consumers are more likely to prefer and invest more in precise forecasts when they are evaluated jointly with ranges and when the range features a potential loss. Under these circumstances, precise forecasts give consumers more confidence to invest. This effect holds when consumers are told investment returns are uncertain. On the other hand, experiencing discrepancies between expected and actual growth dissipates the preference for precise forecasts. We identify conditions under which consumers are more likely to favor precise forecasts and how this could be avoided if necessary.
Public Significance Statement
Consumers were attracted to investments with precise forecasts when they generated more confidence than range forecasts, even though ranges may better characterize the uncertainty inherent in financial investments. Experiencing this uncertainty could mitigate the preference for precise forecasts. This research is particularly relevant to contexts like policy where precision is communicated in imprecise situations.
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