Speaker: Tobias Kalenscher, Professor

Time: 2018-04-17 10:00 - 12:00

Venue: #1113, Wangkezhen Building

Abstract: The assumption that humans are rational, sophisticated and selfish decision-makers with stable preferences is still frequently made in modern economic choice theory. Yet, despite the fact that consumers indeed often behave consistent with these assumptions, decades of research in the behavioural sciences suggest that individuals are occasionally much less rational and egoistic as originally expected. Yet, it is still elusive what causes these systematic deviations from the rational choice ideal. Interestingly, not only human decision-makers, but also non-human animals often meet the standards and requirements of economic choice theory, yet equally often act inconsistent with their revealed preferences, e.g., when foraging for food. Animals and humans even seem to make identical “decision errors”. These intriguing parallels in human and animal choice patterns support the premise that they may share evolutionary roots. In my talk, I will argue in favour of the idea that the reality of decision-making with all its facets, including action consistent with, as well against one’s own preferences, has to be understood in light of the nature, constraint and evolution of the neural apparatus supporting its function. I propose that the neural architecture of choice has evolved to its current state because it provided decision-makers with an adaptive advantage. This means that, even though there might exist a many-to-one mapping of neural implementations to choice processes, careful comparisons across species can complement human microeconomics research by supplying possible answers to the question why we make decisions as we do. I will provide two examples to illustrate the parallel between human and animal decision making: demand theory and intertemporal choice. To conclude, “a theory that works well across species has a greater likelihood of being valid than one that works will with only one, or a limited set of, species.” (Kagel et al., 1995, p. 4).