2020
DOI: 10.1073/pnas.2002232118
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Optimal utility and probability functions for agents with finite computational precision

Abstract: When making economic choices, such as those between goods or gambles, humans act as if their internal representation of the value and probability of a prospect is distorted away from its true value. These distortions give rise to decisions which apparently fail to maximize reward, and preferences that reverse without reason. Why would humans have evolved to encode value and probability in a distorted fashion, in the face of selective pressure for reward-maximizing choices? Here, we show that under the simple a… Show more

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Cited by 34 publications
(47 citation statements)
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References 55 publications
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“…Our results validate this notion, and imply that the development of AI algorithms that aim to resemble neurobehavioral function should go beyond the objective of maximizing only the accurate transmission of information and account for the motivational aspects of the environment that enable the organism (or the artificial agent) to maximize fitness. Finally, although drawn from a different domain of behavior, our results lend substantial support to economic theories positing that context-dependent utility functions should maximize expected reward rather than the expected accuracy of decisions guided by reward (15,29,35). The corroborating evidence presented in our work grounded on the principles of neural coding and decision behaviour should help to advance the development and refinement of these theories within economics and related disciplines of evolutionary biology and social sciences (36)(37)(38).…”
Section: Discussionsupporting
confidence: 75%
See 1 more Smart Citation
“…Our results validate this notion, and imply that the development of AI algorithms that aim to resemble neurobehavioral function should go beyond the objective of maximizing only the accurate transmission of information and account for the motivational aspects of the environment that enable the organism (or the artificial agent) to maximize fitness. Finally, although drawn from a different domain of behavior, our results lend substantial support to economic theories positing that context-dependent utility functions should maximize expected reward rather than the expected accuracy of decisions guided by reward (15,29,35). The corroborating evidence presented in our work grounded on the principles of neural coding and decision behaviour should help to advance the development and refinement of these theories within economics and related disciplines of evolutionary biology and social sciences (36)(37)(38).…”
Section: Discussionsupporting
confidence: 75%
“…Finally, although drawn from a different domain of behavior, our results lend substantial support to economic theories positing that context-dependent utility functions should maximize expected reward rather than the expected accuracy of decisions guided by reward (15, 29, 35). The corroborating evidence presented in our work grounded on the principles of neural coding and decision behaviour should help to advance the development and refinement of these theories within economics and related disciplines of evolutionary biology and social sciences (36–38).…”
Section: Discussionsupporting
confidence: 68%
“…27,43,44 ). Unlike with optimal cognitive biases reported previously [45][46][47][48][49] , we did not find the benefit of the present learning asymmetries to emerge from general limitations (noise) in decision making (supplementary Fig. S4).…”
Section: Discussioncontrasting
confidence: 99%
“…For the Un-crossed condition, we saw that a minority of participants also learned absolute-like codes, and some in the Crossed condition persisted with relative encoding -even though it was clearly sub-optimal. Such individual differences may be driven by cognitive capacity limitations 34 , by intrinsic computational noise 35,36 , by mechanisms relating to working memory or attention 37,38 , or the belief that item-specific value encoding was relevant (despite the absence of such instruction). Future work might manipulate task demands, or measure cognitive capacity, to address these questions.…”
Section: Discussionmentioning
confidence: 99%