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News on the effects of bounded rationality in economics and business, relationships and politics
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What are the best books on the psychology behind human decision making and irrationality?

What are the best books on the psychology behind human decision making and irrationality? | Bounded Rationality and Beyond | Scoop.it
The best books on the psychology behind human decision making and irrationality.
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What Do We Mean By "Rationality"? - Less Wrong

What Do We Mean By "Rationality"? - Less Wrong | Bounded Rationality and Beyond | Scoop.it

We mean:

Epistemic rationality: believing, and updating on evidence, so as to systematically improve the correspondence between your map and the territory.  The art of obtaining beliefs that correspond to reality as closely as possible.  This correspondence is commonly termed "truth" or "accuracy", and we're happy to call it that.Instrumental rationality: achieving your values.  Not necessarily "your values" in the sense of being selfishvalues or unshared values: "your values" means anything you care about.  The art of choosing actions that steer the future toward outcomes ranked higher in your preferences.  On LW we sometimes refer to this as "winning".
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The Mental Cost of Cognitive Enhancement

Abstract

Noninvasive brain stimulation provides a potential tool for affecting brain functions in the typical and atypical brain and offers in several cases an alternative to pharmaceutical intervention. Some studies have suggested that transcranial electrical stimulation (TES), a form of noninvasive brain stimulation, can also be used to enhance cognitive performance. Critically, research so far has primarily focused on optimizing protocols for effective stimulation, or assessing potential physical side effects of TES while neglecting the possibility of cognitive side effects. We assessed this possibility by targeting the high-level cognitive abilities of learning and automaticity in the mathematical domain. Notably, learning and automaticity represent critical abilities for potential cognitive enhancement in typical and atypical populations. Over 6 d, healthy human adults underwent cognitive training on a new numerical notation while receiving TES to the posterior parietal cortex or the dorsolateral prefrontal cortex. Stimulation to the the posterior parietal cortex facilitated numerical learning, whereas automaticity for the learned material was impaired. In contrast, stimulation to the dorsolateral prefrontal cortex impaired the learning process, whereas automaticity for the learned material was enhanced. The observed double dissociation indicates that cognitive enhancement through TES can occur at the expense of other cognitive functions. These findings have important implications for the future use of enhancement technologies for neurointervention and performance improvement in healthy population

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Everything You Interact With Influences You (Whether You're Aware of It or Not)

Everything You Interact With Influences You (Whether You're Aware of It or Not) | Bounded Rationality and Beyond | Scoop.it
Every little detail in our environment can have an influence over our choices and behavior. Often we aren’t even aware of these details and how they influence us – it happens below the surface of our conscious minds.
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Eye Images Increase Charitable Donations: Evidence From a Opportunistic Field Experiment in a Supermarket

Abstract
A number of studies have shown that the presence of simple images of
eyes in the environment increases prosocial behaviour in humans. However, questions remain about the robustness of the effect, its explanation and the factors promoting it. In particular, it is not yet clear whether this effect is restricted to contexts where there is a normative requirement to behave prosocially and thus where punishment is a likely consequence of failing to do so. In an 11-wk field experiment in a supermarket, we displayed either eye images or control images on charity collection buckets.
There was no normative requirement to donate in this setting, and most
people did not do so. However, the presence of eye images increased
donations by 48% relative to control images. The effect of eye images was
significantly stronger at times when the supermarket was quiet rather than busy. Results are consistent with models of the evolution of prosociality through reputation-based partner choice and have potential practical benefits for those involved in charitable fundraising.

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Current Biology - Long-Term Enhancement of Brain Function and Cognition Using Cognitive Training and Brain Stimulation

Summary

Noninvasive brain stimulation has shown considerable promise for enhancing cognitive functions by the long-term manipulation of neuroplasticity [1,2,3]. However, the observation of such improvements has been focused at the behavioral level, and enhancements largely restricted to the performance of basic tasks. Here, we investigate whether transcranial random noise stimulation (TRNS) can improve learning and subsequent performance on complex arithmetic tasks. TRNS of the bilateral dorsolateral prefrontal cortex (DLPFC), a key area in arithmetic [4,5], was uniquely coupled with near-infrared spectroscopy (NIRS) to measure online hemodynamic responses within the prefrontal cortex. Five consecutive days of TRNS-accompanied cognitive training enhanced the speed of both calculation- and memory-recall-based arithmetic learning. These behavioral improvements were associated with defined hemodynamic responses consistent with more efficient neurovascular coupling within the left DLPFC. Testing 6 months after training revealed long-lasting behavioral and physiological modifications in the stimulated group relative to sham controls for trained and nontrained calculation material. These results demonstrate that, depending on the learning regime, TRNS can induce long-term enhancement of cognitive and brain functions. Such findings have significant implications for basic and translational neuroscience, highlighting TRNS as a viable approach to enhancing learning and high-level cognition by the long-term modulation of neuroplasticity.

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The Peaceful Mind: 5 Step Guide to Feeling Relaxed Fast — PsyBlog

The Peaceful Mind: 5 Step Guide to Feeling Relaxed Fast — PsyBlog | Bounded Rationality and Beyond | Scoop.it
How to fight a psychological scourge of the modern world.
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Kauffman & Raison: Lawless Potential — Part 5 of 5

As we and our universe expand into "the adjacent possible", we cannot predict where we're headed argues theoretical biologist Stuart Kauffman.
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Noise Trading and Illusory Correlations in US Equity Markets

Noise Trading and Illusory Correlations in US Equity Markets | Bounded Rationality and Beyond | Scoop.it
Abstract

This paper provides evidence that “illusory correlations”—a well-documented source of cognitive bias—lead some agents to be imperfectly rational noise traders. We focus on the head-and-shoulders chart pattern, considered by technical analysts to provide one of the most reliable trading signals. Our findings indicate that the pattern is associated with a substantial rise in trading volume even though it does not profitably predict directional movements. We further substantiate the connection between head-and-shoulders trading and imperfectly rational noise trading by showing that the pattern is associated with lower bid-ask spreads.

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Ethics in Decision Making

Ethics in Decision Making | Bounded Rationality and Beyond | Scoop.it

In our research we have found an overwhelming amount of information just to address the meaning or distinction between "morals" and "ethics." There are a large range of views that include the words being synonyms and the word ethics being "moral philosophy," or the study of moral principles. Both relate to determination of right conduct.

 

Via Philippe Vallat
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Conscience Accounting: Emotional Dynamics and Social Behavior

Abstract: We develop a dynamic model where people decide in the presence of moral constraints and test the predictions of the model through two experiments. Norm violations induce a temporal feeling of guilt that depreciates with time. Due to such fluctuations of guilt, people exhibit an endogenous temporal inconsistency in social preferences—a behavior we term conscience accounting. In our experiments people first have to make an ethical decision, and subsequently decide whether to donate to charity. We find that those who chose unethically were more likely to donate than those who did not. As predicted, donation rates were higher when the opportunity to donate came sooner after the unethical choice than later. Combined, our theoretical and empirical findings suggest a mechanism by which prosocial behavior is likely to occur within temporal brackets following an unethical choice.

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Perchè il nostro cervello non può essere un computer? | ELETTRONICA OPEN SOURCE

Perchè il nostro cervello non può essere un computer? | ELETTRONICA OPEN SOURCE | Bounded Rationality and Beyond | Scoop.it
I misteri del nostro cervello e le sue nebbie sono argomenti sui quali da tempo ci interroghiamo e, con queste, le domande si moltiplicano velocemente non appena si tenta di far luce sulla chimica che sta dietro le emozioni od i pensieri.
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2011 Eppendorf and Science Prize for Neurobiology

The Eppendorf & Science Prize for Neurobiology acknowledges the increasingly active and important role of neurobiology in advancing our understanding of the functioning of the brain and the nervous system -- a quest that seems destined for dramatic expansion in the coming decades. This international prize, established in 2002, encourages the work of promising young neurobiologists by providing support in the early stages of their careers. 

It is awarded annually for the most outstanding neurobiological research by a young scientist of 35 years of age or younger, as described in a 1,000-word essay based on research performed during the past three years.

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A Good Lamp is the Best Police: Darkness Increases Dishonesty and Self-Interested Behavior

Abstract
Darkness can conceal identity and encourage moral transgressions; it may also induce a psychological feeling of illusory anonymity that disinhibits dishonest and self-interested behavior regardless of actual anonymity. Three experiments provided empirical evidence for this prediction. In Experiment 1, participants in a slightly dim room cheated more and thus earned more underserved money than those in a well-lit room. In experiment 2, participants wearing sunglasses behaved more selfishly than those wearing clear glasses. Finally, in Experiment 3, an illusory sense of anonymity mediated the relationship between darkness and self-interested behaviors. Across all three experiments, darkness had no bearing on actual anonymity, yet it still increased morally questionable behaviors. We suggest that the experience of darkness, even one as subtle as wearing a pair of sunglasses, may induce a sense of anonymity that is disproportionate from actual anonymity in a given situation.

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Mind Projection Fallacy - Less Wrong

Mind Projection Fallacy - Less Wrong | Bounded Rationality and Beyond | Scoop.it

In the dawn days of science fiction, alien invaders would occasionally kidnap a girl in a torn dress and carry her off for intended ravishing, as lovingly depicted on many ancient magazine covers.  Oddly enough, the aliens never go after men in torn shirts.

Would a non-humanoid alien, with a different evolutionary history and evolutionary psychology, sexually desire a human female?  It seems rather unlikely.  To put it mildly.

People don't make mistakes like that by deliberately reasoning:  "All possible minds are likely to be wired pretty much the same way, therefore a bug-eyed monster will find human females attractive."  Probably the artist did not even think to ask whether an alien perceives human females as attractive.  Instead, a human female in a torn dress is sexy—inherently so, as an intrinsic property.

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Second to fourth digit ratio in elite musicians: Evidence for musical ability as an honest signal of male fitness

Second to fourth digit ratio in elite musicians: Evidence for musical ability as an honest signal of male fitness | Bounded Rationality and Beyond | Scoop.it
Abstract 

Prenatal testosterone may facilitate musical ability. The ratio of the length of the second and fourth digit (2D:4D) is probably determined in utero and is negatively related to adult testosterone concentrations and sperm numbers per ejaculate. Therefore, 2D:4D may be a marker for prenatal testosterone levels. We tested the association between 2D:4D and musical ability by measuring the ratio in 70 musicians (54 men and 16 women) recruited from a British symphony orchestra. The men had significantly lower 2D:4D ratios (indicating high testosterone) than controls (n = 86). The mean 2D:4D of women did not differ significantly from controls (n = 78). Rankings of musical ability within the orchestra were associated with male 2D:4D (high rank = low 2D:4D). Differences in 2D:4D ratio were not found among instrument groups, suggesting that 2D:4D was not related to mechanical advantages in playing particular intruments. Concert audiences showed evidence of a female-biased sex ratio in seats close to the orchestra. This preliminary study supports the thesis that music is a sexually selected trait in men that indicates fertilizing capacity and perhaps good genes. However, the association between low 2D:4D ratio and orchestra membership and high status within the orchestra may result from testosterone-mediated competitive ability. Further tests of the association between 2D:4D and musical ability per se are necessary.

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Beauty Queens and Battling Knights Risk Taking and Attractiveness in Chess

We explore the relationship between attractiveness and risk taking in chess. We use a large international panel dataset on chess competitions which includes a control for the players’ skill in chess. This data is combined with results from a survey on an online labor market where participants were asked to rate the photos of 626 expert chess players according to attractiveness. Our results suggest that male chess players choose significantly riskier strategies when playing against an attractive female opponent, even though this does not improve their performance. Women’s strategies are not affected by the attractiveness of the opponent.

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1.5 percent of doctors, a quarter of malpratice reports - Decision Science News

1.5 percent of doctors, a quarter of malpratice reports - Decision Science News | Bounded Rationality and Beyond | Scoop.it
Some doctors receive more malpractice reports than others. Just how unequal is the distribution of malpractice reports?
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Are Monkeys Good With Money? Understanding Economic Bias

Are Monkeys Good With Money? Understanding Economic BiasCommonwealth Club - SF Club OfficeThe evolution of irrationality is discussed by Henry Tenenbaum, Ph.D., Associate Professor of Psychology, Yale University; Director, Yale's Comparative...
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Punching Clouds; Or, Complexity Science Meets Public Decision Making

Punching Clouds; Or, Complexity Science Meets Public Decision Making | Bounded Rationality and Beyond | Scoop.it

the complexities associated with public policy and public decision making are beyond quick fixes or final solutions.  But, if we are to make some progress with them, then understanding correctly their complex nature is the first and most important new step.


Via Philippe Vallat
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Cognitive Biases: Why We Make Irrational Decisions — PsyBlog

Cognitive Biases: Why We Make Irrational Decisions — PsyBlog | Bounded Rationality and Beyond | Scoop.it

Over the decades psychologists have discovered all kinds of biases in how we think.

Some tell us why the incompetent don't know they're incompetent, others why it's difficult to estimate our future emotions and some why we feel more transparent to others than we really appear.

Many of these biases result from our minds using little short-cuts to help us navigate through a complicated world. Unfortunately the result can be that we reach irrational decisions.

Understanding how these biases operate may help you make better decisions in all sorts of situations, both at home and work. More than that, though, it will help you understand your own mind.

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Illusory Correlations: When The Mind Makes Connections That Don’t Exist

Illusory Correlations: When The Mind Makes Connections That Don’t Exist | Bounded Rationality and Beyond | Scoop.it
Why do CEOs who excel at golf get paid more, despite poorer stock market performance?

Via Philippe Vallat
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luiy's curator insight, May 10, 2013 5:10 PM

To see how easily the mind jumps to the wrong conclusions, try virtually taking part in a little experiment...

 

...imagine that you are presented with information about two groups of people about which you know nothing. Let's call them the Azaleans and the Begonians.

 

For each group you are given a list of positive and negative behaviours. A good one might be: an Azalean was seen helping an old lady across the road. A bad one might be: a Begonian urinated in the street.

So, you read this list of good and bad behaviours about the Azaleans and Begonians and afterwards you make some judgements about them. How often do they perform good and bad behaviours and what are they?

What you notice is that it's the Begonians that seem dodgy. They are the ones more often to be found shoving burgers into mailboxes and ringing doorbells and running away. The Azaleans, in contrast, are a sounder bunch; certainly not blameless, but overall better people.

 

While you're happy with the judgement, you're in for a shock. What's revealed to you afterwards is that actually the ratio of good to bad behaviours listed for both the Azaleans and Begonians was exactly the same. For the Azaleans 18 positive behaviours were listed along with 8 negative. For the Begonians it was 9 positive and 4 negative.

In reality you just had less information about the Begonians. What happened was that you built up an illusory connection between more frequent bad behaviours and the Begonians; they weren't more frequent, however, they just seemed that way.

When the experiment is over you find out that most other people had done exactly the same thing, concluding that the Begonians were worse people than the Azaleans.

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Eric Kandel: Unconscious Decision Making

Nobel-Prize winning neuropsychiatrist Eric Kandel describes new research which hints at the possibility of a biological basis to the unconscious mind.
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Philippe Vallat's comment, May 10, 2013 4:13 AM
The typical mecanistic and materialistic view of life, unfortunately...
Alessandro Cerboni's comment, May 10, 2013 5:02 AM
Absolutely agree, too bad it's still the dominant attitude in the choices and thinking.
Philippe Vallat's comment, May 10, 2013 10:44 AM
if interested, check http://www.scoop.it/t/conscience-non-local-e-consciousness
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Experience sampling during fMRI reveals default network and executive system contributions to mind wandering

Abstract

Although mind wandering occupies a large proportion of our waking life, its neural basis and relation to ongoing behavior remain controversial. We report an fMRI study that used experience sampling to provide an online measure of mind wandering during a concurrent task. Analyses focused on the interval of time immediately preceding experience sampling probes demonstrate activation of default network regions during mind wandering, a finding consistent with theoretical accounts of default network functions. Activation in medial prefrontal default network regions was observed both in association with subjective self-reports of mind wandering and an independent behavioral measure (performance errors on the concurrent task). In addition to default network activation, mind wandering was associated with executive network recruitment, a finding predicted by behavioral theories of off-task thought and its relation to executive resources. Finally, neural recruitment in both default and executive network regions was strongest when subjects were unaware of their own mind wandering, suggesting that mind wandering is most pronounced when it lacks meta-awareness. The observed parallel recruitment of executive and default network regions—two brain systems that so far have been assumed to work in opposition—suggests that mind wandering may evoke a unique mental state that may allow otherwise opposing networks to work in cooperation. The ability of this study to reveal a number of crucial aspects of the neural recruitment associated with mind wandering underscores the value of combining subjective self-reports with online measures of brain function for advancing our understanding of the neurophenomenology of subjective experience.

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