Choice uncertainty and the endowment effect

We experimentally test for the role of choice uncertainty in generating "endowment effects" - the robust empirical finding that endowing participants with an item raises their reported valuation relative to participants being asked to purchase it instead. While there is some compelling evidence concerning trade uncertainty in the literature, there is substantially less evidence regarding the importance of choice uncertainty. This paper provides novel support for the significance of choice uncertainty in the context of both trading and stated valuations. In a primary set of studies, we find that reducing choice uncertainty eliminates under-trading in the exchange setting and decreases (but does not eliminate) the difference in average valuations reported by buyers and sellers, mainly by decreasing the number of extreme valuations by sellers. Interestingly, our treatment does not lead to a significant increase in the number of mutually acceptable trades implied by stated valuations. Comparing the results from our two primary experiments therefore suggests that value uncertainty continues to play a role in generating valuation asymmetries even after relevant product uncertainty has been resolved. A set of follow-up studies with modified designs replicates this finding in the exchange setting but fails to generate a valuation asymmetry in the control condition, possibly due to pandemic-related mitigation measures and less participant time with the endowed item.

SUPPLEMENTARY INFORMATION

The online version contains supplementary material available at 10.1007/s11166-022-09387-8.

Differentiating aversive conditioning in bistable perception: Avoidance of a percept vs. salience of a stimulus

Alternating conscious visual perception of bistable stimuli is influenced by several factors. In order to understand the effect of negative valence, we tested the effect of two types of aversive conditioning on dominance durations in binocular rivalry. Participants received either aversive classical conditioning of the stimuli shown alone between rivalry blocks, or aversive percept conditioning of one of the two possible perceptual choices during rivalry. Both groups showed successful aversive conditioning according to skin conductance responses and affective valence ratings. However, while classical conditioning led to an immediate but short-lived increase in dominance durations of the conditioned stimulus, percept conditioning yielded no significant immediate effect but tended to decrease durations of the conditioned percept during extinction. These results show dissociable effects of value learning on perceptual inference in situations of perceptual conflict, depending on whether learning relates to the decision between conflicting perceptual choices or the sensory stimuli per se.

Characterising reward outcome signals in sensory cortex

Reward outcome signalling in the sensory cortex is held as important for linking stimuli to their consequences and for modulating perceptual learning in response to incentives. Evidence for reward outcome signalling has been found in sensory regions including the visual, auditory and somatosensory cortices across a range of different paradigms, but it is unknown whether the population of neurons signalling rewarding outcomes are the same as those processing predictive stimuli. We addressed this question using a multivariate analysis of high-resolution functional magnetic resonance imaging (fMRI), in a task where subjects were engaged in instrumental learning with visual predictive cues and auditory signalled reward feedback. We found evidence that outcome signals in sensory regions localise to the same areas involved in stimulus processing. These outcome signals are non-specific and we show that the neuronal populations involved in stimulus representation are not their exclusive target, in keeping with theoretical models of value learning. Thus, our results reveal one likely mechanism through which rewarding outcomes are linked to predictive sensory stimuli, a link that may be key for both reward and perceptual learning.

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Rewarding outcomes reactivate sensory regions involved in stimulus representation.

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Within these regions reward is not directed specifically to stimulus-coding neurons.

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This resembles a teaching signal predicted by reinforcement learning models.