The Role of Risk Attitudes in Probabilistic Environments
In this work we asked if risk attitudes influence the way agents learn in a probabilistic environment. For that purpose, 31 male students played a version of a well-known game called the multi-armed bandit (with four levers/buttons). We found that after controlling for cognitive abilities (i.e. Rave...
- Autores:
-
Alonso Díaz, Santiago
Forero, Carlos Esteban
- Tipo de recurso:
- Article of journal
- Fecha de publicación:
- 2012
- Institución:
- Universidad Externado de Colombia
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- Biblioteca Digital Universidad Externado de Colombia
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https://revistas.uexternado.edu.co/index.php/odeon/article/view/3697
- Palabra clave:
- Criteria for decision making under risk and uncertainty
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dc.title.spa.fl_str_mv |
The Role of Risk Attitudes in Probabilistic Environments |
dc.title.translated.eng.fl_str_mv |
The Role of Risk Attitudes in Probabilistic Environments |
title |
The Role of Risk Attitudes in Probabilistic Environments |
spellingShingle |
The Role of Risk Attitudes in Probabilistic Environments Criteria for decision making under risk and uncertainty Search |
title_short |
The Role of Risk Attitudes in Probabilistic Environments |
title_full |
The Role of Risk Attitudes in Probabilistic Environments |
title_fullStr |
The Role of Risk Attitudes in Probabilistic Environments |
title_full_unstemmed |
The Role of Risk Attitudes in Probabilistic Environments |
title_sort |
The Role of Risk Attitudes in Probabilistic Environments |
dc.creator.fl_str_mv |
Alonso Díaz, Santiago Forero, Carlos Esteban |
dc.contributor.author.spa.fl_str_mv |
Alonso Díaz, Santiago Forero, Carlos Esteban |
dc.subject.spa.fl_str_mv |
Criteria for decision making under risk and uncertainty Search |
topic |
Criteria for decision making under risk and uncertainty Search |
description |
In this work we asked if risk attitudes influence the way agents learn in a probabilistic environment. For that purpose, 31 male students played a version of a well-known game called the multi-armed bandit (with four levers/buttons). We found that after controlling for cognitive abilities (i.e. Raven’s test), risk seekers in gains preferred to explore in this environment, rather than exploit options, even if one of them was clearly more rewarding. We briefly discuss the reasons and some implications for financial decision theories, in particular, for Bayesian and behavioral proposals. |
publishDate |
2012 |
dc.date.accessioned.none.fl_str_mv |
2012-07-01 00:00:00 2022-09-08T13:38:31Z |
dc.date.available.none.fl_str_mv |
2012-07-01 00:00:00 2022-09-08T13:38:31Z |
dc.date.issued.none.fl_str_mv |
2012-07-01 |
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Artículo de revista |
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http://purl.org/coar/resource_type/c_2df8fbb1 |
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Núm. 7 , Año 2012 |
dc.relation.citationissue.spa.fl_str_mv |
7 |
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Odeon |
dc.relation.references.spa.fl_str_mv |
Anderson, Craig A. (2007). Belief perseverance. In Baumeister, Roy F. & Vohs, Kathleen D., Encyclopedia of Social Psychology, pp. 109-110, Thousand Oaks: Sage. Avery, Christopher & Zemsky, Peter. (1998). Multidimensional Uncertainty and Herd Behavior in Financial Markets. The American Economic Review, vol. 88, n.º 4, pp. 724-748. Banerjee, Abhijit. (1992). A simple model of herd behavior. The Quarterly Journal of Economics, vol. 107, n.º 3, pp. 797-817. Barberis, Nicholas & Thaler, Richard. (2003). A survey of behavioral finance. In Constantinides, George M., Harris, Milton & Stulz, René M., Handbook of the Economics of Finance: Volume 1B, Financial Markets and Asset Pricing, pp. 1053-1128, North Holland: Elsevier. Benjamín, Daniel J.; Brown, Sebastián A. & Shapiro, Jesse M. (2006). Who is “Behavioral”? Cognitive Ability and Anomalous Preferences. Social Science Research network: http://dx.doi.org/10.2139/ssrn.675264, Retrieved July 25, 2012. Bruguier, Antoine J.; Quartz, Steven R. & Bossaerts, Peter L. (2010). Exploring the nature of trader intuition. The Journal of Finance, vol. 65, n.º 5, pp. 1703-1723. Burks, Stephen V.; Carpenter, Jeffrey P.; Goette, Lorenz & Rustichini,Aldo. (2009). Cognitive skills affect economic preferences, strategic behavior, and job attachment. PNAS early edition: http://www.pnas.org_cgi_doi_10.1073_pnas.0812360106, Retrieved November 14, 2010. Camerer, Colin; Loewenstein, George & Prelec, Drazen. (2005). Neuroeconomics: How Neuroscience can Inform Economics. Journal of Economic Literature, vol. 43, 9-64. Cayssials, Alicia; Albajari, Veronica; Aldrey, Adriana; Liporace, Mercedes F.; Naisberg,Carina & Scheinsohn, Maria J. (1993). Normas de la ciudad de Buenos Aires Argentina. In Raven, John C., Test de Matrices Progresivas, pp. 11-17, Argentina: Paidos. Cohen, Jessica R.; Asarnow, Robert F.; Sabb, Fred W.; Bilder, Robert M.; Bookheimer, Susan Y.; Knowlton, Barbara J.; Poldrack, Russell A. (2010). A unique adolescent response to reward prediction errors. Nature Neuroscience, doi:10.1038/nn.2558 (advanced online publication), Retrieved March 08, 2011. Daw, Nathaniel D.; O’Doherty, John P.; Dayan, Peter & Seymour, Ben &. Dolan Raymond J. (2006). Cortical substrates for exploratory decisions in humans. nature, Vol. 441, pp. 876-879. De Martino, Benedetto; Kumaran, Dharshan; Seymour, Ben & Dolan, Raymond J. (2006). Frames, biases and rational decision making in the human brain. Science, Vol. 313, pp. 684-687 Denrell, Jerker. (2007). “Adaptive Learning and Risk Taking. Psychological Review , Vol. 114, n.º 1, pp. 177-187. Dreber, Anna; Rand, David G.; Wernerfelt, Nils.; Garcia, Justin R.; Vilar, Miguel G.; Lum, Koji & Zeckhauser, Richard. (2011). Dopamine and risk choices in different domains: Findings among serious tournament bridge players. Journal of Risk and Uncertainty, vol. 43, n.º 1, pp. 19-38. Druckman, James N. (2001). Evaluating framing effects. Journal of Economic Psychology, vol. 22, pp. 91-101. Estes, William; Campbell, Jane A.; Hatsopoulos, Nicholas & Hurwitz, Joshua B. (1989). Base-rate effects in category learning: A comparison of parallel network and memory storage-retrieval models. Journal of Experimental Psychology, vol. 15, n.º 4, pp. 556-571. Fama, Eugene F. (1970). Efficient Capital Markets: A review of theory and empirical work. The Journal of Finance, vol. 25, n.º 2, pp. 383-417. Frederick, Shane. (2005). Cognitive Reflection and Decision Making. Journal of Economic Perspectives, vol. 19, n.º 4, pp. 25-42. Frydman, Cary; Camerer, Colin; Bossaerts, Peter & Rangel, Antonio. (2010). MAOA-L carriers are better at making optimal financial decisions under risk. Proceedings of The Royal Society, doi:10.1098/rspb.2010.2304. Gigerenzer, Gerd & Brighton, Henry. (2009). Homo Heuristicus: Why biased minds make better inferences. Topics in Cognitive Science, vol. 1, pp. 107-143. González, Cleotilde; Dana, Jason; Koshino, Hideya & Just, Marcel. (2005). The framing effect and risky decisions: Examining cognitive functions with fMRI. Journal of Economic Psychology, vol. 26, pp. 1-20. Gould, Stephen J. (1981). The Mismeasure of Man. New York: W. W. Norton & Company. Griffiths, Thomas L.; Kemp, Charles & Tenenbaum, Joshua B. (2008). Bayesian models of cognition. In Sun, Ron., Cambridge Handbook of Computational Cognitive Modeling, pp. 59-101, New York: Cambridge University Press. Kaelbling, Leslie P.; Littman, Michael L. & Moore, Andrew W. (1996). Reinforcement Learning: A Survey. Journal of Artificial Intelligence Research, vol. 4, pp. 237-285. Kahneman, Daniel & Tversky, Amos. (1979). Prospect Theory: An Analysis of Decision under Risk. Econometrica, vol. 47, n.º 2, pp. 263-292. Kuhberger, Anton (1998). The Influence of Framing on Risky Decisions: A Meta-analysis. Organizational Behavior and Human Decision Processes, vol. 75, n.º 1, pp. 23-55. Kuhnen, Camelia M. & Chiao, Joan Y. (2009). Genetic Determinants of Financial Risk Taking. PLoS One, vol. 4, n.º 2, pp. 1-4. March, James G. (1996). Learning to be risk averse. Psychological Review, vol. 103, n.º 2, pp. 309-319. Meeter, Martijn; Radics, G.; Myers, Catherine; Gluck, Mark & Hopkins, Ramona O. (2008). Probabilistic categorization: How do normal and amnesic patients do it? Neuroscience and Biobehavioral Reviews, vol. 32, pp. 237-248. Pastor, Lubos & Veronesi, Pietro. (2009). Learning in financial markets. National Bureau of Economic Research: http://www.nber.org/papers/w14646.pdf, Retrieved July 27, 2012. Payzan-LeNestour, Elise & Bossaerts, Peter. (2012). Learning to Choose the Right Investment in an Unstable World. Social Science Research Network: http://dx.doi. org/10.2139/ssrn.2056927, Retrieved July 18, 2012. Piñon, Adelson & Gambara, Hilda. (2005). A meta-analytic review of framing effect: Risky, attribute and goal framing. Psicothema, vol. 17, n.º 2, pp. 325-331. Plott, Charles R. & Sunder, Shyam. (1988). Rational expectatations and the aggregation of diverse information in laboratory security markets. Econometrica, vol. 56, n.º 5, pp. 1085-1118. Robbins, Herbert (1952). Some aspects of the sequential design of experiments. Bulletin of the ams, vol. 58, pp. 527-535. Schultz, Wolfram (1998). Predictive reward signal of dopamine neurons. Journal of neurophysiology, vol. 80, pp. 1-27. Shin, Jiwoong & Ariely, Dan (2004). Keeping Doors Open: The Effect of Unavailability on Incentives to Keep Options Viable. Management Science, vol. 50, n.º 5, pp. 575-586. Sternberg, Robert J. (1999). The theory of successful intelligence. Review of General Psychology, vol. 3, n.º 4, pp. 292-316. Sutton, Richard S. & Barto, Andrew G. (1998). Reinforcement Learning: An Introduction. Cambridge, MA: MIT Press. Tversky, Amos & Kahneman, Daniel. (1981). The framing of decisions and the psychology of choice. Science, vol. 211, pp. 453-458. Vermorel, Joannes & Mohri, Mehryar. (2005). Multi-Armed Bandit Algorithms and Empirical Evaluation. Machine Learning: ECML 2005 (Conference Proceedings), pp.437-448, Porto: Springer. Vives, Xavier. (1997). Learning from others: A welfare analysis. Games and Economic Behavior, vol. 20, pp. 177-200. Yechiam, Eldad & Busemeyer, Jerome R. (2006). The effect of forgone payoffs on underweighting small probability events. Journal of Behavioral Decision Making, vol.19, pp. 1-16. |
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Alonso Díaz, Santiagod8c1ae0f-e017-4b60-8a0b-f5023801271eForero, Carlos Esteban9656d832-cbd8-46a6-a787-0305839520822012-07-01 00:00:002022-09-08T13:38:31Z2012-07-01 00:00:002022-09-08T13:38:31Z2012-07-01In this work we asked if risk attitudes influence the way agents learn in a probabilistic environment. For that purpose, 31 male students played a version of a well-known game called the multi-armed bandit (with four levers/buttons). We found that after controlling for cognitive abilities (i.e. Raven’s test), risk seekers in gains preferred to explore in this environment, rather than exploit options, even if one of them was clearly more rewarding. We briefly discuss the reasons and some implications for financial decision theories, in particular, for Bayesian and behavioral proposals.application/pdftext/html2346-21401794-1113https://bdigital.uexternado.edu.co/handle/001/7436https://revistas.uexternado.edu.co/index.php/odeon/article/view/3697spaFacultad de Finanzas, Gobierno y Relaciones Internacionaleshttps://revistas.uexternado.edu.co/index.php/odeon/article/download/3697/3827https://revistas.uexternado.edu.co/index.php/odeon/article/download/3697/4134Núm. 7 , Año 20127OdeonAnderson, Craig A. (2007). Belief perseverance. In Baumeister, Roy F. & Vohs, Kathleen D., Encyclopedia of Social Psychology, pp. 109-110, Thousand Oaks: Sage.Avery, Christopher & Zemsky, Peter. (1998). Multidimensional Uncertainty and Herd Behavior in Financial Markets. The American Economic Review, vol. 88, n.º 4, pp. 724-748.Banerjee, Abhijit. (1992). A simple model of herd behavior. The Quarterly Journal of Economics, vol. 107, n.º 3, pp. 797-817.Barberis, Nicholas & Thaler, Richard. (2003). A survey of behavioral finance. In Constantinides, George M., Harris, Milton & Stulz, René M., Handbook of the Economics of Finance: Volume 1B, Financial Markets and Asset Pricing, pp. 1053-1128, North Holland: Elsevier.Benjamín, Daniel J.; Brown, Sebastián A. & Shapiro, Jesse M. (2006). Who is “Behavioral”? Cognitive Ability and Anomalous Preferences. Social Science Research network: http://dx.doi.org/10.2139/ssrn.675264, Retrieved July 25, 2012.Bruguier, Antoine J.; Quartz, Steven R. & Bossaerts, Peter L. (2010). Exploring the nature of trader intuition. The Journal of Finance, vol. 65, n.º 5, pp. 1703-1723.Burks, Stephen V.; Carpenter, Jeffrey P.; Goette, Lorenz & Rustichini,Aldo. (2009). Cognitive skills affect economic preferences, strategic behavior, and job attachment. PNAS early edition: http://www.pnas.org_cgi_doi_10.1073_pnas.0812360106, Retrieved November 14, 2010.Camerer, Colin; Loewenstein, George & Prelec, Drazen. (2005). Neuroeconomics: How Neuroscience can Inform Economics. Journal of Economic Literature, vol. 43, 9-64.Cayssials, Alicia; Albajari, Veronica; Aldrey, Adriana; Liporace, Mercedes F.; Naisberg,Carina & Scheinsohn, Maria J. (1993). Normas de la ciudad de Buenos Aires Argentina. In Raven, John C., Test de Matrices Progresivas, pp. 11-17, Argentina: Paidos.Cohen, Jessica R.; Asarnow, Robert F.; Sabb, Fred W.; Bilder, Robert M.; Bookheimer, Susan Y.; Knowlton, Barbara J.; Poldrack, Russell A. (2010). A unique adolescent response to reward prediction errors. Nature Neuroscience, doi:10.1038/nn.2558 (advanced online publication), Retrieved March 08, 2011.Daw, Nathaniel D.; O’Doherty, John P.; Dayan, Peter & Seymour, Ben &. Dolan Raymond J. (2006). Cortical substrates for exploratory decisions in humans. nature, Vol. 441, pp. 876-879.De Martino, Benedetto; Kumaran, Dharshan; Seymour, Ben & Dolan, Raymond J. (2006). Frames, biases and rational decision making in the human brain. Science, Vol. 313, pp. 684-687Denrell, Jerker. (2007). “Adaptive Learning and Risk Taking. Psychological Review , Vol. 114, n.º 1, pp. 177-187.Dreber, Anna; Rand, David G.; Wernerfelt, Nils.; Garcia, Justin R.; Vilar, Miguel G.; Lum, Koji & Zeckhauser, Richard. (2011). Dopamine and risk choices in different domains: Findings among serious tournament bridge players. Journal of Risk and Uncertainty, vol. 43, n.º 1, pp. 19-38.Druckman, James N. (2001). Evaluating framing effects. Journal of Economic Psychology, vol. 22, pp. 91-101.Estes, William; Campbell, Jane A.; Hatsopoulos, Nicholas & Hurwitz, Joshua B. (1989). Base-rate effects in category learning: A comparison of parallel network and memory storage-retrieval models. Journal of Experimental Psychology, vol. 15, n.º 4, pp. 556-571.Fama, Eugene F. (1970). Efficient Capital Markets: A review of theory and empirical work. The Journal of Finance, vol. 25, n.º 2, pp. 383-417.Frederick, Shane. (2005). Cognitive Reflection and Decision Making. Journal of Economic Perspectives, vol. 19, n.º 4, pp. 25-42.Frydman, Cary; Camerer, Colin; Bossaerts, Peter & Rangel, Antonio. (2010). MAOA-L carriers are better at making optimal financial decisions under risk. Proceedings of The Royal Society, doi:10.1098/rspb.2010.2304.Gigerenzer, Gerd & Brighton, Henry. (2009). Homo Heuristicus: Why biased minds make better inferences. Topics in Cognitive Science, vol. 1, pp. 107-143.González, Cleotilde; Dana, Jason; Koshino, Hideya & Just, Marcel. (2005). The framing effect and risky decisions: Examining cognitive functions with fMRI. Journal of Economic Psychology, vol. 26, pp. 1-20.Gould, Stephen J. (1981). The Mismeasure of Man. New York: W. W. Norton & Company.Griffiths, Thomas L.; Kemp, Charles & Tenenbaum, Joshua B. (2008). Bayesian models of cognition. In Sun, Ron., Cambridge Handbook of Computational Cognitive Modeling, pp. 59-101, New York: Cambridge University Press.Kaelbling, Leslie P.; Littman, Michael L. & Moore, Andrew W. (1996). Reinforcement Learning: A Survey. Journal of Artificial Intelligence Research, vol. 4, pp. 237-285.Kahneman, Daniel & Tversky, Amos. (1979). Prospect Theory: An Analysis of Decision under Risk. Econometrica, vol. 47, n.º 2, pp. 263-292.Kuhberger, Anton (1998). The Influence of Framing on Risky Decisions: A Meta-analysis. Organizational Behavior and Human Decision Processes, vol. 75, n.º 1, pp. 23-55.Kuhnen, Camelia M. & Chiao, Joan Y. (2009). Genetic Determinants of Financial Risk Taking. PLoS One, vol. 4, n.º 2, pp. 1-4.March, James G. (1996). Learning to be risk averse. Psychological Review, vol. 103, n.º 2, pp. 309-319.Meeter, Martijn; Radics, G.; Myers, Catherine; Gluck, Mark & Hopkins, Ramona O. (2008). Probabilistic categorization: How do normal and amnesic patients do it? Neuroscience and Biobehavioral Reviews, vol. 32, pp. 237-248.Pastor, Lubos & Veronesi, Pietro. (2009). Learning in financial markets. National Bureau of Economic Research: http://www.nber.org/papers/w14646.pdf, Retrieved July 27, 2012.Payzan-LeNestour, Elise & Bossaerts, Peter. (2012). Learning to Choose the Right Investment in an Unstable World. Social Science Research Network: http://dx.doi. org/10.2139/ssrn.2056927, Retrieved July 18, 2012.Piñon, Adelson & Gambara, Hilda. (2005). A meta-analytic review of framing effect: Risky, attribute and goal framing. Psicothema, vol. 17, n.º 2, pp. 325-331.Plott, Charles R. & Sunder, Shyam. (1988). Rational expectatations and the aggregation of diverse information in laboratory security markets. Econometrica, vol. 56, n.º 5, pp. 1085-1118.Robbins, Herbert (1952). Some aspects of the sequential design of experiments. Bulletin of the ams, vol. 58, pp. 527-535.Schultz, Wolfram (1998). Predictive reward signal of dopamine neurons. Journal of neurophysiology, vol. 80, pp. 1-27.Shin, Jiwoong & Ariely, Dan (2004). Keeping Doors Open: The Effect of Unavailability on Incentives to Keep Options Viable. Management Science, vol. 50, n.º 5, pp. 575-586.Sternberg, Robert J. (1999). The theory of successful intelligence. Review of General Psychology, vol. 3, n.º 4, pp. 292-316.Sutton, Richard S. & Barto, Andrew G. (1998). Reinforcement Learning: An Introduction. Cambridge, MA: MIT Press.Tversky, Amos & Kahneman, Daniel. (1981). The framing of decisions and the psychology of choice. Science, vol. 211, pp. 453-458.Vermorel, Joannes & Mohri, Mehryar. (2005). Multi-Armed Bandit Algorithms and Empirical Evaluation. Machine Learning: ECML 2005 (Conference Proceedings), pp.437-448, Porto: Springer.Vives, Xavier. (1997). Learning from others: A welfare analysis. Games and Economic Behavior, vol. 20, pp. 177-200.Yechiam, Eldad & Busemeyer, Jerome R. (2006). The effect of forgone payoffs on underweighting small probability events. Journal of Behavioral Decision Making, vol.19, pp. 1-16.info:eu-repo/semantics/openAccesshttp://purl.org/coar/access_right/c_abf2https://creativecommons.org/licenses/by-nc-sa/4.0/https://revistas.uexternado.edu.co/index.php/odeon/article/view/3697Criteria for decision making under risk and uncertaintySearchThe Role of Risk Attitudes in Probabilistic EnvironmentsThe Role of Risk Attitudes in Probabilistic EnvironmentsArtículo de revistahttp://purl.org/coar/resource_type/c_6501http://purl.org/coar/resource_type/c_6501http://purl.org/coar/resource_type/c_2df8fbb1http://purl.org/coar/version/c_970fb48d4fbd8a85Textinfo:eu-repo/semantics/articleJournal articlehttp://purl.org/redcol/resource_type/ARTREFinfo:eu-repo/semantics/publishedVersionPublicationOREORE.xmltext/xml2591https://bdigital.uexternado.edu.co/bitstreams/285c7968-f82f-41e3-81dd-82a9ef447edd/downloadd97cb4fde5068ee21808793fa1f36bd9MD51001/7436oai:bdigital.uexternado.edu.co:001/74362023-08-14 15:01:25.171https://creativecommons.org/licenses/by-nc-sa/4.0/https://bdigital.uexternado.edu.coUniversidad Externado de Colombiametabiblioteca@metabiblioteca.org |