Final coursework

For our final coursework I summarized article by Range,Horn, Viranyi, and Huber called The Absence of Reward Induces Inequity Aversion in Dogs. The aim of this paper was to investigate whether domestic dogs are influenced by the inequity of rewards that were received for the same action in pairs of familiar dogs when working with the same experimenter. The experimenter requested the dogs to perform a certain action (dogs were asked to give their paw) to gain a food reward.

Interestingly, the results in this paper differed from the results of the primate studies because researchers did not find any indication for sensitivity towards the quality of the food reward and effort involved. There might several possible explanations why dogs behaved that way. It might be because all tested dogs were well trained, used to work on a daily basis with their ownerOr in the social conditions, working next to a partner might have a facilitation effect (increasing the motivation of the subject to continue working even if only the partner is receiving the high-value reward and not they themselves)
And perhaps most importantly, the presence of the rewards themselves was such a strong motivator that they obscured the results of any QI assessment by the subjects.
Also in contrast to the primates the dogs never rejected food. Therefore, the dogs were only responsive to disadvantageous inequity aversion and were not willing to pay a cost by rejecting unfair offers. As we can see there is a fundamental difference in the behaviour between primates and dogs. However, attempting to answer questions such as whether lack of sensitivity to the quality of the reward is a specific feature of domestic dogs or canines in general, would require devising experiments in which the dogs may behave more like the primates that have been tested so far.
The other four articles contained experiments with monkeys,which colleagues from my group discussed in a final paper.
Over all i enjoyed this module and types of assignments we were required to do. Moreover, i enjoyed working as a group.It might be because i was lucky enough to be a part of the group where everybody equally contributed to our work.

Preparations for end of semester coursework

After a long Christmas break we are back to work again!!!
To comment on a presentations in last 2weeks before the Christmas break i have to say they went well. Our presentation was the first one and even when we tried to fit it in 10minuts time we went a bit over but because we had an interesting topic i think our audience didnt mind. At the beginning of the module i was realy scared about talking in front of the whole class but now i am more confident to give a presentation in front of the audience.
As with our mid semester essay me and other 4 girls in my group we devided the articles in a fair manner. Obviously we are going to read all the articles about inequity aversion in animals but each of us is going to write about one article in our final coursework. The reson is that we want to show that each of us made an effort in writting the final essay. I will write about my article in the next blog

Monkeys reject unequal pay

Last friday my group had a presentation on a paper by S.F.Brosnan and B.M. de Waal called Monkeys reject unequal pay. We divided the paper into 5 parts so each of us have a part in writing up a power point slides and also we all took turns when presenting in front of the class.

In evolution of cooperation it seems critical that individuals are comparing their own efforts and payoffs with those of others. When individual`s expectations are violated negative reactions may occur. This aversion to inequity is not unique only to human.In the paper authors look at the behaviour of capuchin monkeys.

The study in the paper concerns only five female monkeys which were subjected to 4 contitions. First, equality in which two monkeys exchanged tokens with human experimenter to receive cucumber. Second, inequality in which one monkey exchanged for cucumber and its partner for grape (more favoured food).Third, effort controls in which a grape was simply given to the partner by the experimenter followed by the subject herself exchanging for cucumber. Fourth, food controls in which in the absence of a partner the subject witnessed a grape being placed in the location where the partner normaly sat after which subject exchanged for cucumber.

Despite the small number of subjects ,what they found was that the strongest increase in refusal to exchange occured when a partner received better rewards without any effort.

Also authors wanted to test if behaviour would change over the course of test. Each subject received two tests of each condition, each with 25 trials.One prediction said that failed exchanges might increase over trials if subject did not recognize that they were getting lesser reward but learned it over time. The other prediction said that failed exchanges might decrease if subject settled for the lesser reward seeing that higher rewards wasn`t coming. To test those two predictions they compared subject`s responses with first 15 trials versus last 10 trials.
For equality, inequality and effort controls conditions non exchanges increased over the course of tests. For food controls condition non exchanges decreased. Maybe it was because in an absence of a partner the adjustment to low value reward might be made easier.

Capuchin monkeys seem to measure reward in similar way as people judge fairness. They compared their own rewards with those available and their own efforts with those of others.
Although the data gathered here cannot explain those responses , there is a possibility that monkeys similarly to humans are guided by social emotions.

I found this article very interesting and I am looking forward to reading more articles about aversion to inequity in animals for our end of semester work.

Revision lectute

Last week we had a revision lecture, about all the topics we have covered up to now. It was very interesting that majority of people in the class found the topic about judges decision making, most fascinating. Although, endowment effect and framing effect are interesting as well.

As friday, also was a deadline for our midsemester work we made sure with other 4 girls in my group that our essay is on the site and everyone can access it. We devided the topic into 5 parts, because we all wanted to have equal share in writting up the essay. We kept in contact through mails and met couple of times as well. We did not want to include any graphs because of copyright issues David was talking about at the lecture. We thought the work looked more boring without the pictures and graphs but is better to be safe than sorry!
This friday we are meeting up with girls and going to disscuss which paper we are going to read and prepare for our presentation. I will write more about the paper in my next blog.

Endowment Effect: A Query Theory

I will just continue from my last blog were i started to write about endowment effect .

My group, we read a paper called Aspects of endowment: A Query theory of value construction.

I found this paper very interesting because authors showed in 3 experiments how they can create or eliminate endowment effect by simply reversing the order of two questions about the possible exchange. I will briefly describe those experiments later, let me first mention the theory they proposed as an explanation of endowment effect.
The theory is called A Query theory of the endowment effect. It says that process which account for endowment effect is based on the idea that valuations depend on memory retrieval processes.
A Query Theory four premises ( that explain endowment effect) are: First, decision maker decompose valuation questions ( e.g. What would be my selling price?). Second, is that these queries are executed serially, one after the other. Third, because of output interference , query order matters ( first query is more represented than the second) and Fourth premise suggests different response modes produce different query order ( Choosers first consider why they might not enter the transaction and after why they might do it, sellers do it in reverse order).

In experiments participants were randomly assigned to be either sellers ( endowed) they were given a mug that was theirs to keep and they could later sell it to experimenter for some amount of money and choosers ( not endowed) they could later choose between receiving the mug or some amount of money.

In First experiment they wanted to know if endowment can change the considered aspects.
Before indicating valuation of the mug participants we asked to list the aspects (reasons) why would they personally want the mug or have the money. As suggested by query account sellers produced more value-increasing aspects ( positive thoughts about the mug and negative thoughts about the money) and choosers produced more value-decreasing aspects ( positive thoughts about the money and negative thoughts about the mug).

In Second experiment they wanted to see if they can eliminate endowment effect.
They used two aspect-listings conditions. First, all aspects participants considered in making decisions. Second, it was reversed. Sellers were asked to first produce value-decreasing and after value-increasing aspects and choosers were first asked to produce value-increasing and after value-decreasing aspects. Second scenario showed that by simply altering the order in which participants reported the aspects they were considering was successful in completely eliminating the endowment effect.

In third experiment they wanted to see if they could create endowment effect.
Participants were informed that they were going to choose between any amount of money and the mug and nobody was endowed with the mug, after they completed two aspect-listing tasks the order of which was manipulated. Even though, participants were not endowed with the mug and answered same set of aspects questions, by manipulating the order of sets of aspects resulted in endowment effect.

In those three experiments the authors demonstrated that : 1) endowment influences the aspects that individuals consider 2) endowment changes the order in which aspects are recalled 3) these aspects are related to decision maker`s valuation of objects 4) by changing the order of aspect queries we can eliminate the endowment effect as well as we can produce endowment effect in absence of ownership.

Decision framing

Last week my group read and presented in the class paper called Choices, Values and Frames written by D. Kahneman and A. Tversky.



First part of the paper focuses on an approach to risky choice especially on hypothesis based on prospect theory. Because we already talked about prospect theory in previous lectures I am going to focus on a second part of the paper were authors discuss framing effect and framing of outcomes.



Risky prospects are characterized by their possible outcomes and by the probabilities of these outcomes. The same option can be framed or described in different ways. Look at following example :


•Problem1

•Imagine that the U.S. is preparing for the outbreak of an unusual Asian disease, which is expected to kill 600 people. Two alternative programs to combat the disease have been proposed.
•If Program A is adopted, 200 people will be saved. (72%)
•If Program B is adopted, there is one-third probability that 600 people will be saved and a two-thirds probability that no people will be saved (28%)


•Problem 2

•If Program C is adopted, 400 people will die (22%)
•If Program D is adopted, there is a one-third probability that nobody will die and two-thirds probability that 600 people will die (78%)

In the first problem as expected preferences are risk averse ( people prefer saving 200 lives for sure then gamble). In the second problem people showed risk seeking preference for gamble. As we can see those two problems are the same.
One of the processes that control the framing of outcomes and events is framing effect. This public health problem above illustrates a framing effect in which change of wording from "lives saved" to "lives lost" induced a shift of preference from risk aversion to risk seeking. Framing effect can occur without anyone being aware of the impact of the frame on the decision. It can be exploited deliberately to manipulate the attractiveness of options.

After, authors moved on to analyse mental accounting that specifies the advantages and the disadvantages associated with the multiattribute option.
They suggested, that people will spontaneously frame decisions in terms of topical accounts. A topical account relates the conseqences of possible choices to a reference level that is determined by the context within which the decision arises. The following problem illustrates example of mental accounting in which the posting of a cost to an account is controlled by topical organization:


•Imagine that you have decided to see a play and paid the admission price of $10 per ticket. As you enter the theatre you discover that you have lost the ticket. The seat was not marked and the ticket cannot be recovered.
•Would you pay for another ticket?
•Yes (46%) No (54%)

•Imagine that you have decided to see a play where admission is 10$. As you enter the theatre you discover that you have lost a $10 bill
•Would you still pay $10 for a ticket for the play?
•Yes (88%) No (12%)

Why are people unwilling to spend $10 after having lost a ticket if they would spend that sum after loosing $10 cash? According to topical org anization, going to the theatre is normally viewed as a transaction in which the cost of the ticket is exchanged for the experience of seeing the play. Buying a second ticket increases the cost of seeing the play to a level that is unacceptable for many people. In contrast the loss of cash is not posted to the account of the play and it doesn`t affect the purchase of the ticket.

Losses and costs are described at the end of the article.Many decision problems take the form of a choice between status quo and accepting an alternative ( which is advantageous or in some aspects disadvantageous). Advantages of alternative options will be evaluated as gains and disadvantages as losses. Thaler used the term endowment effect to describe the reluctance of people to part from assets that belong to their endowment. It is more painful to give up an asset than it is pleasurable to obtain it, buying prices will be significantly lower than selling prices.

I will finish here because my group is going to read a paper about endowment effect for friday`s lecture. I will write some more about it next week.

Measuring Utility

The first graph is for Certainty equivalence, and the second one is for Probability equivalence.
Horizontal axes represents monetary values and the vertical values represents utility values.
The task for this exercise was to state the amount of money that would make me indifferent between that amount and gamble.
As you can see those two graphs are similar because i am not a much of a gambler. In the first graph i would settle for half of the amount rather than risking to loose whole amount offered.

And in a second graph i would go for a certain amount and only if the probability of me winning more money is high (95%) then it would make me to gamble .

Horizontal axes represents monetary values and the vertical ones utility values. The task was to state the amount of money that would make us indifferent between that amount and a gamble.