Speaker at this week’s SWE Colloquium (2 May) is Dr Karl Halvor Teigen, from the University of Oslo Department of Psychology.

Out of the blue: Subjective perceptions of randomness

Most psychological research on perceived randomness has been devoted to studies of composite events, like random sequences of coin tosses, hot hand phenomena, and random visual patterns. But people in daily life also discuss whether singular events, like a traffic accident, a mistake, a coincidental meeting, a career change, or an unexpected outcome of a football match occur “by chance” or not. The present research project (with Gideon Keren, Tilburg, and Alf Børre Kanten, Oslo) aims to reveal the subjective characteristics of randomness in such contexts. We find that people attribute improbable outcomes to chance more often than probable ones. For instance, coincidences framed as unlikely are seen as more random than identical events presented in a more likely frame, and even the outcome of lotteries are seen as more random when winning odds are low. People (including scientists) seem also more inclined to accept random influences in a small-scale context than with large events. Assumptions about the rarity and smallness of random events might foster a belief that randomness is unimportant.

This week’s guest speaker in the SWE Colloquium is Silvia Maier, University of Zurich, Department of Economics and Translational Neuromodeling Unit, ETH & University of Zurich.

Individual differences in neural and psychophysiological characteristics during self-regulation

Individuals vary profoundly in their ability to use self-control. This variability in behavior is accompanied by differences in brain activity and other physiological functions both at rest and during self-control challenges. In a set of studies, we identified neural responses in the dorsolateral and ventrolateral prefrontal cortices that covaried with individual differences in realized self-control. In our initial work, we replicated the finding that connectivity between the dorsolateral and ventromedial prefrontal cortex is associated with better self-control in dietary choices and show how this mechanism is impaired by stress (Maier et al. 2015 Neuron). We also showed that individual differences in resting heart rate variability (HRV) improved the prediction of self-control levels, suggesting that HRV may be a useful biomarker for self-regulatory abilities (Maier & Hare 2017 J Neurosci). Furthermore, we found that neural signatures accompanying successful emotion-regulation correlate with self-control success in a separate dietary choice task. Our results suggest that individual differences in the flexibility of the neural system to reinterpret choice situations or emotional content are related to self-regulatory success across domains (Maier & Hare 2019 bioRxiv). Taken together, our results support a role for prefrontal networks in flexibly adjusting behavior to meet self-regulation goals.

Pantelis Analytis, Assistant Professor at the Danish Institute of Advanced Studies (DIAS) at the University of Southern Denmark (SDU), will give a talk in the SWE Colloquium series on Thursday, 18 April.

Make-or-break: Chasing risky goals or settling for safe rewards?

Humans regularly pursue activities characterized by dramatic success or failure outcomes where, critically, the chances of success depend on the time invested working towards it. How should people allocate time between such make-or-break challenges and safe alternatives, where rewards are more predictable (e.g., linear) functions of performance? We present a formal framework for studying time allocation between these two types of activities, and explore optimal behavior in both one-shot and dynamic versions of the problem. In the one-shot version, we illustrate striking discontinuities in the optimal time allocation policy as we gradually change the parameters of the decision-making problem. In the dynamic version, we formulate the optimal strategy—defined by a giving-up threshold—which adaptively dictates when people should stop pursuing the make-or-break goal. We then show that this strategy is computationally inaccessible for humans, and explore boundedly rational alternatives. We compare the performance of the optimal model against i) a myopic giving-up threshold that is easier to compute, and even simpler heuristic strategies that either ii) only decide whether or not to start pursuing the goal and never give up or iii) consider giving up at a fixed number of control points. Comparing strategies across environments we investigate the cost and behavioral implications of sidestepping the computational burden of full rationality.

Guest speaker in this week’s SWE Colloquium is Frédéric-Guillaume Schneider from the University of Cambridge Judge Business School.

The Persistent Power of Promises

Frédéric-Guillaume Schneider discusses this paper (co-authored with Florian Ederer), which investigates how the passage of time affects trust, trustworthiness, and cooperation. “We use a hybrid lab and online experiment to provide the first evidence for the persistent power of communication. Even when 3 weeks pass between messages and actual choices, communication raises cooperation, trust, and trustworthiness by about 50 percent. Lags between the beginning of the interaction and the time to respond do not substantially alter the trustworthiness of the responder. Our results further suggest that the findings of the large experimental literature on trust that focuses on laboratory scenarios, in which senders are forced to choose their actions immediately after communicating with recipients, may translate to more ecologically valid settings in which individuals choose actions outside the lab and long after they initially made promises.”

Do Markets Undermine Moral Values? (with Ernst Fehr and Yagiz Özdemir)

Björn Bartling, Professor of Economics, University of Zurich is this week’s guest speaker (4 April) in the SWE Colloquium, addressing the question “Do markets undermine moral values”. This centers on the debate about the role of markets for moral values by comparing behavior in experimental market and non-market environments. First, we show that repeated play rather than market environments undermines moral values in bilateral interactions, which calls into question earlier results in the literature and points to the importance of moral licensing effects. Second, we show that moral behavior in markets is robust to competitive pressure and the concomitant moral excuse “if I don’t do it, someone else will”. Third, we find that moral behavior is diminished as markets grow larger and identify the underlying mechanisms by disentangling the roles of endogenous matching opportunities and social information.