Inconsistent choice-making a normal part of how the brain evaluates options, new study finds

Inconsistent choice-making a normal part of how the brain evaluates options
Ryan Webb is an Assistant Professor at the Rotman School of Management. His research integrates the disciplines of Neuroscience, Psychology, and Economics to provide insight into consumer behaviour. His recent research includes developing tools to predict consumer choices from measurements of neural activity (fMRI and EEG), and modelling consumer behaviour from the principles of information coding in the human brain. He has received a Ph.D. in Economics from Queens University and research fellowships from New York University and the California Institute of Technology. Credit: Rotman School of Management

Economists have noticed that people can behave inconsistently when making choices. According to economic theory, people should choose the same things every time, under the same circumstances, because they are recognized as holding the same value as before. But people don't always do that. Sometimes consumers will switch their preferences, known in industry terms as "customer churn." While economists have previously called that an error in rationality, a new study says an important part of inconsistent choice-making is due to idiosyncratic activity in the brain areas that assess value.

"If the value of a Coke is higher to you than a Pepsi, then you should choose the Coke every single time," explains study co-author Ryan Webb, an assistant professor at the University of Toronto's Rotman School of Management. "But because of these 'noisy' fluctuations in neural activity, every so often, the Pepsi is better than the Coke."

Prof. Webb, Vered Kurtz-David, and Profs. Dotan Persitz, and Dino Levy from Tel Aviv University were able to observe the phenomenon by getting research volunteers to play a series of lotteries while lying inside a imaging (fMRI) scanner. The fMRI monitors by detecting changes in blood flow to different parts of the .

The volunteers had to choose between different combinations of tokens directed towards two simultaneous lotteries, each with a 50% chance of being the winner. Each volunteer played the lotteries multiple times in quick succession while inside the fMRI.

The fMRI studies showed that the areas of the brain that were most active during the most inconsistent choices were the same areas responsible for evaluating value. In other words, the that usually make rational choices sometimes make irrational ones too. This contradicts previous theories that have suggested rational and irrational decision-making are influenced by activity in separate parts of the brain, or by different thinking processes, an idea popularized in Daniel Kahneman's book, Thinking Fast and Slow.

The results suggest that occasional inconsistent choices are fundamental to how a typical brain works, regardless of efforts to ensure people stick religiously to their usual preferences.

"Sometimes people are going to choose another product," says Prof. Webb, who brings together neuroscience, psychology and economics in his research. "Every so often, they're going to switch."

The study was published last month in Nature Communications.


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Our brains reveal our choices before we're even aware of them, study finds

More information: Vered Kurtz-David et al, The neural computation of inconsistent choice behavior, Nature Communications (2019). DOI: 10.1038/s41467-019-09343-2
Journal information: Nature Communications

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May 28, 2019
"If the value of a Coke is higher to you than a Pepsi, then you should choose the Coke every single time,"

the brain areas that usually make rational choices sometimes make irrational ones too


The naive economist believes that people are omniscient about the choices they have.

In reality, you have to try different things occasionally in order to figure out which one you should prefer, and that's not irrational in the least but necessary because information has a cost: you have to buy a Pepsi to know that you (still) don't like Pepsi. If you never do things differently, you can't make rational value judgements in a reality that keeps changing.

It's surprising to the point of being irrational that the economists didn't think of that.

Furthermore, there's other evidence that suggests people don't have preferences, "hidden variables", that explain their future choices but rather they come up with the choice on the spot in a probabilistic manner.

May 28, 2019
https://www.techn...llacies/

"Quantum probability theory is a general and coherent theory based on a set of (von Neumann) axioms which relax some of the constraints underlying classic (Kolmogorov) probability theory," say the team.

What Busemeyer and co are saying is that the principles of quantum information processing, including the ideas of superposition and interference, lead to better models of the way humans make decisions.


That isn't to say the brain is a quantum computer, but it at least emulates similar functions. The main difference is that in quantum probability, not all of the random variables need to be defined at the same time, so the order of observation can change the outcome. In other words, asking "Would you like a Pepsi?" instead of "Would you like a Coke?" can alter the actual preference of the person on the spot.

May 28, 2019
So, given the above, the assumption:

According to economic theory, people should choose the same things every time, under the same circumstances, because they are recognized as holding the same value as before.


Is doubly unjustified. People do not consistently hold the same values as they did before. They don't always prefer Coke over Pepsi even in the same circumstances, and even when they do they still sometimes try the other thing because they need to obtain information.

When it happens we go, "Hm. Coke sounds boring, I think I'll have a Pepsi instead".

its
May 29, 2019
You would think that Economists would be really good at understanding human behavior, but papers like this suggests they are really bad at it.

With statements like "inconsistent choices", and making the assumption that given the same situation the same person will always do the same thing, especially when the setup is "50%". That by its nature give "no preference" to one side or the other, and as such a person might very well just "toss a coin" in their head. And of course the next time they do it, they will get a different answer. They don't have clue what they answered before because it didn't matter to them. And when it does matter, there are "unseen values" like boredom, that these people aren't taking into account.

May 29, 2019
Add a need for variety to the list of values, and the behavior will be seen as quite consistent.

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