Moving Viewpoint: what makes human subjects different from computer agents?

1
Moving Viewpointwhat makes human subjects
differentfrom computer agents?
Sobei H. Oda Kyoto Sangyo University
The Sixth International Workshop on Agent-based
Approaches in Economic and Social Complex
Systems National Chengchi University, Taipei 14
November 2009
2
Computer Agents
Program
Action
Dynamics
Human Subjects
Dynamics
Strategy
Action
known
observable
unknown
3
Allais Paradox
TWD400 (20 per cent) gt TWD300 (25 per cent)
TWD400 (80 per cent) lt TWD300 (100 per cent)
100 is special, while difference between 99 and
98 is a matter of degree.
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Hyperbolic Discounting
22 Feb. 2010
23 Feb. 2010
TWD100000 lt TWD100100
100
99
98
99
97
98
96
97
80
81
70
71
60
61
50
51
40
41
30
31
20
21
10
11
9
10
8
9
7
8
6
7
5
6
4
5
3
4
2
3
1 day
2
0 day
1 day
(in 100 days) lt (in 101 days)
- 100 days
- 100 days
reversed
- 99
- 99
- 98
- 98
- 97
- 97
- 96
- 96
- 80
- 80
- 70
- 60
- 50
- 40
- 30
- 20
- 10
- 9
- 8
- 7
- 6
- 5
- 4
- 3
- 2
- 1
0 day
- 70
- 60
- 50
- 40
- 30
- 20
- 10
- 9
- 8
- 7
- 6
- 5
- 4
- 3
- 2
- 1
0 day
TWD100000 (today) gt TWD100100 (tomorrow)
Nov. 2009
Feb. 2010
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16
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22
14
5
Similarity and Difference between Allais Paradox
and Hyperbolic Discounting
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Kyoto Experimental Economics Laboratory (KEEL)
fMRI at Brain Activity Imaging Centre
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Combination of alternatives
today 1 week later 2 weeks later
100
80
40
8
time
9
Results (Green-Blue)
today 1 week later 2 weeks later
100
80
40
BA39

• BA39 is involved in calculation (?)

OFC
10
Results (Blue-Green)
Self-projection
today 1 week later 2 weeks later
100
80
40
parahippocampal gyrus
precuneus
neural activity in these regions tracks the
revealed subjective value of delayed
rewards. Kable Glimcher (Nature
Neuroscience 2007)
PFC
PCC
striatum
11

• Self Projection reflects the workings of the same
  core brain network.

Remember past to imagine future. Why have we
memory? Because with memory we can make better
decisions and have greater chance to survive.
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Self-Projection (Bucker and Carroll, TRENDS in
Cognitive Science 2006)
Remembering
Prospection
Theory of Mind
Navigation
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Self Projection as Moving viewpoint
Narrator
navigation
Future Self
Past Self
Present Self
remembering
prospection
Another Person
theory of mind
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today 1 week later 2 weeks later
100
80
40

• The regions contain precuneus and parahippocampal
  gyrus, which are considered to be activated when
  people are involved in complicated
  decision-making.
• Together with other observations, it seems to
  support self-projection, suggesting also why
  people reveal such intertemporal preference that
  does not allow a simple explanation.

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annual discounting factors No convergence is
observed. Why?
????
Frederick, Loewenstein and O'Donghue (JEL2002)
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Questions (Environmant)
Intertemporal choice
Risky choice
Brain
fMRI
Self-projection
Calculation (?)
more complicated
Observation
lab field
Answers (Behaviors)
Instable
Stable
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stimulus condition
insider
fMRI
conscious thinking
outsider
unconscious process
behaviour
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At least one of you have a white hat on your
head. Can you tell whether your hat is white or
not? Yasugi and Oda (2002, 2003)
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Girl Bs inference
I (B) know
inference
I (B) know
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Girl As inference
I (A) know
inference
I (A) does not know
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I (A) know
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Human behaviour
Jumping out of the system (Hofstader 1979)
Action what they do
inference
emotion, instinct, experience, etc. what they
feel consciously or unconsciously
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Jumping out controllable Jumping out
uncontrollable
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Bertrand Duopoly with product differentiation

• ParticipantsClass140
• LAB58
• All pairs are reshuffled randomly
• All players decisions are posted simultaneously

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Participants/experiments Max 28
Perticipants/experiments120-142
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Percentage of students who chosePrice 3
Nash Equilibrium strategy

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Percentage of students who chosePrice 7
Pareto optimal strategy

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Percentage of students who chose Price 2
What strategy?

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1 2 3 4 5 6 7 8 9 10 11 12 13 14
1 0 6 10 47 73 104 183 282 403 544 707 890 1095 1320
2 6 0 16 52 78 110 188 288 408 550 712 896 1100 1326
3 10 16 0 37 63 94 173 272 393 534 697 880 1085 1310
4 47 52 37 0 26 58 136 236 356 498 660 844 1048 1274
5 73 78 63 26 0 31 110 209 330 471 634 817 1022 1247
6 104 110 94 58 31 0 79 178 299 440 603 786 991 1216
7 183 188 173 136 110 79 0 100 220 362 524 708 912 1138
8 282 288 272 236 209 178 100 0 121 262 425 608 813 1038
9 403 408 393 356 330 299 220 121 0 142 304 488 692 918
10 544 550 534 498 471 440 362 262 142 0 163 346 551 776
11 707 712 697 660 634 603 524 425 304 163 0 184 388 614
12 890 896 880 844 817 786 708 608 488 346 184 0 205 430
13 1095 1100 1085 1048 1022 991 912 813 692 551 388 205 0 226
14 1320 1326 1310 1274 1247 1216 1138 1038 918 776 614 430 226 0
Player As profit gtPlayer Bs profit
Player As profit ltPlayer Bs profit
Player As profit Player Bs profit

• Choosing 2 is the unique Dominant strategy for
  each player if they maximises not their profit
  but the difference between their profits and
  their opponents.

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Q2 Q3
P2 363,363 388,372
P3 372,388 402,402
Without Monetary rewards students played not P3
to maximize their profits but P2 to beat their
opponents, which are also confirmed in the
debriefing questionnaires.
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Cournot-Stackelberg Duopoly

• All pairs are fixed.
• First 1st movers decisions are shown and then
  2nd movers make decisions

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Percentage of pairs who realised Nash
Equilibrium (13,5)

• Without Money are students more rational?

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2nd movers choice2nd movers are more Submissive
in Classroom.
Laboratory
Classroom
Experiment 3 Profit table
Practically Ultimatum game Cooperation seeking
(?) No-conditional accept Conditional
accept Reject
Pareto optimal
2nd movers Reaction Curve
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Dynamics of 1st movers choice
Classroom Period 1
Lab Period 1
3 6 8 13
3 8 13
Classroom Period 10
Lab Period 11
3 6 8 13
3 8 13
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In the classroom the second movers were ready for
accepting the SPNE, which is the Nash Equilibrium
least favorable to them. In the debriefing
Questionnaires they were only too happy to give a
rational explanation why they had not earned
more. They seemed to have changed their
objective from maximising their profit to
explaining why they couldnt, which change was
not observed in the laboratory. Monetary rewards
prevented subjects from setting their own goal by
themselves and made them play seriously though
it may not be the case in every economic
experiment.
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Differences between the classroom and the
laboratory
Laboratory Classroom
With Monetary Rewards With Monetary Rewards
Perticipants/experiments Max 28 Participants/experiments 120-142
3 experiments/1day 1 experiment/1day
No debriefing for each experiment Debriefing for each experiment

Other Differences Other Differences


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Human subjects can (cannot but) jump out of the
system.

• They move their viewpoint to make decisions so
  that they can make better decisions which
  process is realised by dynamic brain activities.
• They do not limit their inference within the
  system they do meta-thinking to make decisions.
• They change (find or create) new objectives if
  they think the original ones are not interesting
  or too difficult to be realised.

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references
1 Allais, Maurice (1953) ''Le comportement de
lhomme rationel devant le risque, critique des
postulates et axiomes de lecole americaine'', in
conometrica, vol. 21, pp. 503-546. 2 Barron,
Greg Ido Erev (2003) ''Small feedback-based
decisions and their limited correspondence to
description-based decisions'', in Journal of
Behavioral Decision Making, vol. 16, pp.
215-233.  3 Buckner, Randy L. Daniel C.
Carroll (2007) ''Self-projection and the
Brain'', in Trends in Cognitive Sciences, vol.
11, pp.49-57. 4 Camerer, Colin F. George
Loewenstein Drazen Prelec (2005)
''Neuroeconomics How neuroscience can inform
economics'', in Journal of Economic Literature,
vol. 43 (no. 1), pp. 9-64.  5 Frederick, Shane
George Loewenstein Ted O'Donoghue (2002)
''Time Discounting and Time Preference A
Critical Review'', in Journal of Economic
Literature, vol. 40 (June), pp.
351-401.  6 Glimcher, Paul W.
(2003) ''Decisions, Uncertainty, and the Brain
The Science of Neuroeconomics'', MIT Press,
Cambridge, Massachusetts, USA ???????(2008) ????
????---????????????????????, ?????. 
40
references
7 Gul, Faruk Wolfgang Pesendorfer (2005)
The Case for Mindless Economics,
http//www.princeton.edu/pesendor/mindless.pdf.
8 Hertwig, R. Greg Barron E. Weber Ido
Erev (2004)Decisions from experience and the
weighting of rare events, in Psychological
Science vol.15, pp. 534-539. 9 Hofstadter,
Douglas R. (1979, Escher, Bach an Eternal Golden
Braid, Basic Books, New York, USA
?????????????????(1985) ?????, ?????,
?????????????, ???. 10 Hsu, Ming Meghana
Bhatt Ralph Adolphs Daniel Tranel Colin F.
Camerer (2005) Neural Systems Responding to
Degrees of Uncertainty in Human Decision-Making,
in Science, vol. 310, pp.1680-1683. 11 Kable,
Joseph W. Paul W. Glimcher (2007) The Neural
Correlates of Subjective Value During
Intertemporal Choice, in Nature NeuroScience,
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Yuval Rottenstreich Amos Tversky (1996)
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Nature, vol. 453, pp. 869-878.
41
references
15 McClure, Samuel M David I. Laibson
George Loewenstein Jonathan D. Cohen (2004)
Separate Neural Systems Value Immediate and
Delayed Monetary Rewards, in Science, vol. 306,
pp.503-507. 16 Moreno, Jonathan D. (2005)
Mind Wars Brain Research and National Defense,
Dana Press, New York, USA ????????(2008)
????????? ???????, ?????????????????????????.
17 ????(2008) ?????????????????????,
??????????????, ?1 ?, pp. 13-23. 18 Pasinetti,
Luigi, L. (1981) Structural Change and Economic
Growth a theoretical essay on the dynamics of
the wealth of nations, Cambridge University
Press, Cambridge, UK ????????????(1983)
??????????????????????????????, ?????. 19
Rubinstein, Ariel (2006) Discussion of
Behavioral Economics Behavioral Economics
(Colin Camerer) and Incentives and Self-Control
(Ted ODonoghue and Matthew Rubin), in Advances
in Economics and Econometrics Theory and
Applications, Ninth World Congress. Volume 2
(Econometric Society Monographs, no. 42) edited
by Richard Blundell Whitney K. Newey Torsten
Persson, Cambridge University Press, Cambridge
and New York pp. 246-54. 20 Samuelson, Paul,
A. (1947) Foundation of Economic Analysis,
Harvard University Press, Cambridge, Mass.
???????(1967) ?????????, ????.
42
references
21 Shafir, Sharoni Taly Reich Erez Tsur
IdoErev Arnon Lotem (2008) Perceptual
accuracy and conflicting effects of certainty on
risk-taking behaviour, in Nature, vol. 453, pp.
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Microeconomic Systems as an Experimental
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Huettel (2008) The neural substrates of
probabilistic and intertemporal decision making,
in Brain Research, doi 10.1016/j.brainres.2008.07
.105. 24 Yasugi, Mariko Sobei H. Oda (2002)
A Note on the Wise Girls Puzzle, in Economic
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Yasugi, Mariko Sobei H. Oda (2003) Notes on
Bounded Rationality, in Scientiae Mathematicae
Japonicae, vol. 57 (no. 1), pp. 83-92.
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International Conference How and why economists
and philosophers do experiments dialogue between
Experimental economics and experimental
philosophy Kyoto Sangyo University, Kyoto,
Japan?27-28 March 2010