The neural correlates of the decoy effect in decisions

Changing Decisions: The Interaction between Framing and Decoy Effects

BACKGROUND

Cognitive biases are popular topics in psychology and marketing, as they refer to systematic cognitive tendencies in human thinking that deviate from logical and rational reasoning. The framing effect (FE) and the decoy effect (DE) are examples of cognitive biases that can influence decision making and consumer preferences. The FE involves how options are presented, while the DE involves the addition of a third option that influences the choice between the other two options.

METHODS

We investigated the interaction between the FE and the DE in the case of both incongruent (ID) and congruent (CD) decoys in a sample of undergraduates (n = 471). The study had a two (positive vs. negative valence) × three (original, congruent decoy, incongruent decoy) within-subject design.

RESULTS

The ID option reduces the FE in both positive- and negative-framed conditions compared to the controls, while adding the CD option increases the FE only in the positive-framed condition. Additionally, the inclusion of the CD option enhances the level of decision confidence, whereas no significant differences were found in the ID condition.

CONCLUSIONS

Our findings gave new insights into the interplay between two of the most frequent cognitive biases.

Context-effect bias in capuchin monkeys (Sapajus spp.): exploring decoy influences in a value-based food choice task

Decision making is known to be liable to several context effects. In particular, adding a seemingly irrelevant alternative (decoy) to a set of options can modify preferences: typically, by increasing choices towards whatever option clearly dominates the decoy (attraction effect), but occasionally also decreasing its appeal and generating a shift in the opposite direction (repulsion effect). Both types of decoy effects violate rational choice theory axioms and suggest dynamic processes of preference-formation, in which the value of each alternative is not determined a priori, but it is instead constructed by comparing options during the decision process. These effects are well documented, both in humans and in other species: e.g., amoebas, ants, honeybees, frogs, birds, cats, dogs. However, evidence of decoy effects in non-human primates remains surprisingly mixed. This study investigates decoy effects in capuchin monkeys (Sapajus spp.), manipulating time pressure across different conditions, to test whether such effects require time-consuming comparative processes among available alternatives. Whereas the time-dependent nature of decoy effects is a robust finding in the human literature, this is its first investigation in non-human animals. Our results show that capuchins exhibit an attraction effect with decoys targeting their preferred food, and that this effect disappears under time pressure; moreover, we observe preliminary evidence of a repulsion effect when decoys target instead the less-preferred food, possibly due to the larger distance between decoy and target in the attribute space. Taken together, these results provide valuable insight on the evolutionary roots of comparative decision making.

Opening the 'Black Box': An Overview of Methods to Investigate the Decision-Making Process in Choice-Based Surveys

The desire to understand the preferences of patients, healthcare professionals and the public continues to grow. Health valuation studies, often in the form of discrete choice experiments, a choice based survey approach, proliferate as a result. A variety of methods of pre-choice process analysis have been developed to investigate how and why people make their decisions in such experiments and surveys. These techniques have been developed to investigate how people acquire and process information and make choices. These techniques offer the potential to test and improve theories of choice and/or associated empirical models. This paper provides an overview of such methods, with the focus on their use in stated choice-based healthcare studies. The methods reviewed are eye tracking, mouse tracing, brain imaging, deliberation time analysis and think aloud. For each method, we summarise the rationale, implementation, type of results generated and associated challenges, along with a discussion of possible future developments.

The Consumer Contextual Decision-Making Model

Consumers can have difficulty expressing their buying intentions on an explicit level. The most common explanation for this intention-action gap is that consumers have many cognitive biases that interfere with rational decision-making. The current resource-rational approach to understanding human cognition, however, suggests that brain environment interactions lead consumers to minimize the expenditure of cognitive energy according to the principle of Occam’s Razor. This means that the consumer seeks as simple of a solution as possible for a problem requiring decision-making. In addition, this resource-rational approach to decision-making emphasizes the role of inductive inference and Bayesian reasoning. Together, the principle of Occam’s Razor, inductive inference, and Bayesian reasoning illuminate the dynamic human-environment relationship. This paper analyzes these concepts from a contextual perspective and introduces the Consumer Contextual Decision-Making Model (CCDMM). Based on the CCDMM, two hypothetical strategies of consumer decision-making will be presented. First, the SIMilarity-Strategy (SIMS) is one in which most of a consumer’s decisions in a real-life context are based on prior beliefs about the role of a commodities specific to real-life situation being encountered. Because beliefs are based on previous experiences, consumers are already aware of the most likely consequences of their actions. At the same time, they do not waste time on developing contingencies for what, based on previous experience, is unlikely to happen. Second, the What-is-Out-there-in-the-World-Strategy (WOWS) is one in which prior beliefs do not work in a real-life situation, requiring consumers to update their beliefs. The principle argument being made is that most experimental consumer research describes decision-making based on the WOWS, when participants cannot apply their previous knowledge and situation-based strategy to problems. The article analyzes sensory and cognitive biases described by behavioral economists from a CCDMM perspective, followed by a description and explanation of the typical intention-action gap based on the model. Prior to a section dedicated to discussion, the neuroeconomic approach will be described along with the valuation network of the brain, which has evolved to solve problems that the human has previously encountered in an information-rich environment. The principles of brain function will also be compared to CCDMM. Finally, different approaches and the future direction of consumer research from a contextual point of view will be presented.

Decoy effects in intertemporal and probabilistic choices the role of time pressure, immediacy, and certainty

A decoy is an irrelevant option that, when added to a binary choice, is not selected but nonetheless alters the subjects' preferences, systematically biasing towards its target. The decoy effect, also known as attraction effect, is considered an anomaly of rational decision-making, albeit its applicability to real-life choices outside of laboratory settings has been challenged. In particular, when decoys have been studied in choices between outcomes occurring at different points in time, i.e. intertemporal choices, or with different probabilities of realizing their utility, i.e. probabilistic choices, results were mixed: sometimes decoys are impactful, sometimes they are not, and they seem to be more effective in biasing towards, respectively, larger-and-later and larger-and-riskier outcomes, rather than towards sooner-and-smaller or sooner-and-safer rewards. We suggest that this puzzling set of results can be clarified by focusing on two important influencing factors: time pressure and immediacy/certainty. Moreover, we argue that decoy effects constitute an excellent testbed to assess similarities and differences between intertemporal choice and risky decision-making, which constitutes another open issue in the study of human choice. Two studies are presented to support these claims. In Study 1 (N = 92), we demonstrate that asymmetrically dominated decoys influence both intertemporal choice and risky decision-making only in the absence of time pressure, since otherwise the comparative process required for the decoy to have an impact cannot occur, consistently with predictions made by connectionist models of decision. In Study 2 (N = 53), we show that, when the smaller option is no longer presented as immediate/certain (but rather as sooner/safer), the impact of decoys becomes symmetrical - that is, they can prompt subjects to become either more future-oriented/risk-prone or more present-oriented/risk-averse. We conclude by discussing the implications of these findings for our understanding of the multifaceted role of time and chance in decision making.

Attraction Effect in Risky Choice Can Be Explained by Subjective Distance Between Choice Alternatives

Individuals make decisions under risk throughout daily life. Standard models of economic decision making typically assume that people evaluate choice options independently. There is, however, substantial evidence showing that this independence assumption is frequently violated in decision making without risk. The present study extends these findings to the domain of decision making under risk. To explain the independence violations, we adapted a sequential sampling model, namely Multialternative Decision Field Theory (MDFT), to decision making under risk and showed how this model can account for the observed preference shifts. MDFT not only better predicts choices compared with the standard Expected Utility Theory, but it also explains individual differences in the size of the observed context effect. Evidence in favor of the chosen option, as predicted by MDFT, was positively correlated with brain activity in the medial orbitofrontal cortex (mOFC) and negatively correlated with brain activity in the anterior insula (aINS). From a neuroscience perspective, the results of the present study show that specific brain regions, such as the mOFC and aINS, not only code the value or risk of a single choice option but also code the evidence in favor of the best option compared with other available choice options.

The Interplay of Hippocampus and Ventromedial Prefrontal Cortex in Memory-Based Decision Making

Episodic memory and value-based decision making are two central and intensively studied research domains in cognitive neuroscience, but we are just beginning to understand how they interact to enable memory-based decisions. The two brain regions that have been associated with episodic memory and value-based decision making are the hippocampus and the ventromedial prefrontal cortex, respectively. In this review article, we first give an overview of these brain–behavior associations and then focus on the mechanisms of potential interactions between the hippocampus and ventromedial prefrontal cortex that have been proposed and tested in recent neuroimaging studies. Based on those possible interactions, we discuss several directions for future research on the neural and cognitive foundations of memory-based decision making.

Individual variation in the neural processes of motor decisions in the stop signal task: the influence of novelty seeking and harm avoidance personality traits

Personality traits contribute to variation in human behavior, including the propensity to take risk. Extant work targeted risk-taking processes with an explicit manipulation of reward, but it remains unclear whether personality traits influence simple decisions such as speeded versus delayed responses during cognitive control. We explored this issue in an fMRI study of the stop signal task, in which participants varied in response time trial by trial, speeding up and risking a stop error or slowing down to avoid errors. Regional brain activations to speeded versus delayed motor responses (risk-taking) were correlated to novelty seeking (NS), harm avoidance (HA) and reward dependence (RD), with age and gender as covariates, in a whole brain regression. At a corrected threshold, the results showed a positive correlation between NS and risk-taking responses in the dorsomedial prefrontal, bilateral orbitofrontal, and frontopolar cortex, and between HA and risk-taking responses in the parahippocampal gyrus and putamen. No regional activations varied with RD. These findings demonstrate that personality traits influence the neural processes of executive control beyond behavioral tasks that involve explicit monetary reward. The results also speak broadly to the importance of characterizing inter-subject variation in studies of cognition and brain functions.

Decision making under uncertainty, therapeutic inertia, and physicians' risk preferences in the management of multiple sclerosis (DIScUTIR MS)

BACKGROUND

The management of multiple sclerosis (MS) is rapidly changing by the introduction of new and more effective disease-modifying agents. The importance of risk stratification was confirmed by results on disease progression predicted by different risk score systems. Despite these advances, we know very little about medical decisions under uncertainty in the management of MS. The goal of this study is to i) identify whether overconfidence, tolerance to risk/uncertainty, herding influence medical decisions, and ii) to evaluate the frequency of therapeutic inertia (defined as lack of treatment initiation or intensification in patients not at goals of care) and its predisposing factors in the management of MS.

METHODS/DESIGN

This is a prospective study comprising a combination of case-vignettes and surveys and experiments from Neuroeconomics/behavioral economics to identify cognitive distortions associated with medical decisions and therapeutic inertia. Participants include MS fellows and MS experts from across Spain. Each participant will receive an individual link using Qualtrics platform(©) that includes 20 case-vignettes, 3 surveys, and 4 behavioral experiments. The total time for completing the study is approximately 30-35 min. Case vignettes were selected to be representative of common clinical encounters in MS practice. Surveys and experiments include standardized test to measure overconfidence, aversion to risk and ambiguity, herding (following colleague's suggestions even when not supported by the evidence), physicians' reactions to uncertainty, and questions from the Socio-Economic Panel Study (SOEP) related to risk preferences in different domains. By applying three different MS score criteria (modified Rio, EMA, Prosperini's scheme) we take into account physicians' differences in escalating therapy when evaluating medical decisions across case-vignettes.

CONCLUSIONS

The present study applies an innovative approach by combining tools to assess medical decisions with experiments from Neuroeconomics that applies to common scenarios in MS care. Our results will help advance the field by providing a better understanding on the influence of cognitive factors (e.g., overconfidence, aversion to risk and uncertainty, herding) on medical decisions and therapeutic inertia in the management of MS which could lead to better outcomes.

The development of the asymmetrically dominated decoy effect in young children

One classic example of context-independent violations is the asymmetrically dominated decoy effect, in which adding a decoy option (inferior option) to a set of original options often increases the individual’s preference for one option over the other original option. Despite the prevalence of this effect, little is known about its developmental origins. Moreover, it remains contentious whether the decoy effect is a result of biological evolution or is learned from social experience. Here, we investigated the decoy effect in 3- to 7-year-old children (n = 175) and young adults (n = 52) using a simple perceptual task. Results showed that older children (5-year-olds and 7-year-olds), but not younger children (3-year-olds), exhibited a decoy effect. Nevertheless, children as young as age 5 exhibited a decoy effect that was not significantly different from that shown by young adults. These findings suggest that humans start to appreciate the relative values of options at around age 5.

Stress potentiates decision biases: A stress induced deliberation-to-intuition (SIDI) model

Humans often make decisions in stressful situations, for example when the stakes are high and the potential consequences severe, or when the clock is ticking and the task demand is overwhelming. In response, a whole train of biological responses to stress has evolved to allow organisms to make a fight-or-flight response. When under stress, fast and effortless heuristics may dominate over slow and demanding deliberation in making decisions under uncertainty. Here, I review evidence from behavioral studies and neuroimaging research on decision making under stress and propose that stress elicits a switch from an analytic reasoning system to intuitive processes, and predict that this switch is associated with diminished activity in the prefrontal executive control regions and exaggerated activity in subcortical reactive emotion brain areas. Previous studies have shown that when stressed, individuals tend to make more habitual responses than goal-directed choices, be less likely to adjust their initial judgment, and rely more on gut feelings in social situations. It is possible that stress influences the arbitration between the emotion responses in subcortical regions and deliberative processes in the prefrontal cortex, so that final decisions are based on unexamined innate responses. Future research may further test this 'stress induced deliberation-to-intuition' (SIDI) model and examine its underlying neural mechanisms.