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

1. Moving Viewpoint:what 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. reversed × 4 × 4 Allais’ Paradox TWD400 (20 per cent) > TWD300 (25 per cent) TWD400 (80 per cent) < TWD300 (100 per cent) 100% is special, while difference between 99% and 98% is a matter of degree.

4. Hyperbolic Discounting 22 Feb. 2010 23 Feb. 2010 TWD100000 < TWD100100 1 day 96 70 80 97 98 99 60 50 6 1 day 30 3 40 2 5 4 7 8 9 10 20 0 day 100 21 31 81 11 2 10 97 9 61 8 51 7 41 6 99 5 71 4 98 3 (in 100 days) < (in 101 days) - 99 - 98 - 60 - 97 - 96 - 1 - 2 - 3 - 4 - 5 - 30 - 7 - 8 - 9 - 20 - 6 - 40 - 50 - 70 - 80 - 10 - 100 days 0 day reversed - 96 - 99 - 80 - 8 - 6 - 5 - 4 - 98 - 7 - 2 - 3 - 70 - 60 - 50 - 40 - 30 - 20 - 10 - 9 - 97 - 1 - 100 days 0 day TWD100000 (today) > TWD100100 (tomorrow) Nov. 2009 Feb. 2010 14 15 16 17 ・ ・ ・ ・ ・ 21 22

5. TWD100000 (in 100 d.) < TWD100100 (in 101 d.) but TWD100000 (today) > TWD100100 (tomorrow) cannot be rational (maintained) TWD4000 (20 %) > TWD3000 (25 %) but TWD4000 (80 %) < TWD3000 (100 %) can be rational Similarity and Difference between Allais’ Paradox and Hyperbolic Discounting

6. Kyoto Experimental Economics Laboratory (KEEL) fMRI at Brain Activity Imaging Centre

7. Combination of alternatives

8. choice presentation choice presentation A today 4000 yen 80 % B 2 weeks 5000 yen 100 % B today 8000 yen 40 % A today 4000 yen 100 % 1-5 seconds 1-5 seconds 12 seconds + + + decision making decision making time

9. Results (Green-Blue) • BA39 is involved in calculation (?) BA39 OFC

10. Results (Blue-Green) Self-projection parahippocampal gyrus precuneus neural activity in these regions tracks the revealed subjective value of delayed rewards. Kable & Glimcher (Nature Neuroscience 2007) striatum PCC PFC

11. OFC parahippocampal gyrus • 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.

12. Self-Projection (Bucker and Carroll, TRENDS in Cognitive Science 2006) Remembering Prospection Theory of Mind Navigation

13. Self Projection as Moving viewpoint Narrator navigation Past Self Future Self Present Self remembering prospection Another Person theory of mind

14. Self-projection PFC precuneus parahippocampal gyrus • 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.

15. annual discounting factors No convergence is observed. Why? テキスト Frederick, Loewenstein and O'Donghue (JEL2002)

16. Questions; (Environmant) Intertemporal choice Risky choice Brain fMRI Self-projection Calculation (?) more complicated Observation lab field Answers; (Behaviors) Instable Stable

17. stimulus condition insider fMRI conscious thinking outsider unconscious process behaviour

18. 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)

19. She (A) knows that my hat or her hat or both hats are white; she does not know whether her hat is white or not; she knows whether my hat is white or not. My hat is white. Girl B’s inference I (B) know: inference I (B) know:

20. She (B) has a white hat on her head; at least one of us wears a white hat. where My hat is white or not. Girl A’s inference I (A) know: inference I (A) does not know:

21. She (B) has a white hat on her head; at least one of us wears a white hat. My hat is white My hat is not white I (A) know: I (A) know: I (A) know: I (A) do not know whether my hat is white or not. (Yasugi and Oda 2002, 2003)

22. Preference: what they prefer Information: what they know Options: what they can do Human behaviour Jumping out of the system (Hofstader 1979) Action: what they do inference emotion, instinct, experience, etc.: what they feel consciously or unconsciously

23. Jumping out controllable Jumping out uncontrollable

24. Nash Equilibrium Player A’s Reaction Curve Player B’s Reaction Curve Bertrand Duopoly with product differentiation • Participants:Class:140 • LAB:58 • All pairs are reshuffled randomly • All players’ decisions are posted simultaneously

25. Participants/experiments: Max 28 Perticipants/experiments:120-142

26. Percentage of students who chosePrice=3: Nash Equilibrium strategy %

27. Percentage of students who chosePrice = 7: Pareto optimal strategy %

28. Percentage of students who chosePrice = 2: What strategy? %

29. Choosing 2 is the unique Dominant strategy foreach player if they maximises not their profit but the difference between their profits and their opponents’. Player A’s profit >Player B’s profit Player A’s profit <Player B’s profit Player A’s profit =Player B’s profit

30. Without Monetary rewards students played not P=3 to maximize their profits but P=2 to beat their opponents, which are also confirmed in the debriefing questionnaires.

31. (8,8) 1st mover profit =2624 2nd mover profit =2624 1st mover’s Reaction Cuarve Maximum 1st mover’s profit on the 2nd mover’s reaction Curve: SPNE 2nd mover’s Reaction Curve: 2nd mover’s SPNE strategy 1st mover’s SPNE strategy Cournot-Stackelberg Duopoly • All pairs are fixed. • First 1st movers’ decisions are shown and then 2nd movers make decisions

32. Percentage of pairs who realised Nash Equilibrium: (13,5) • Without Money are students more “rational”?

33. 2nd player’s strategy (3, 10) 1st mover Profit 1362 2nd mover Profit 4540 Nash Equilibrium most advantageous for the 2nd mover 1st player’s strategy 1st mover’s profit increases 2nd mover’s profit increases (13,5) 1st mover Profit 3172 2nd mover Profit 1220 Nash Equilibria

34. 2nd mover’s 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 mover’s Reaction Curve

35. Dynamics of 1st mover’s choice Classroom Period 1 Lab Period 1 3 8 13 3 6 8 13 Classroom Period 10 Lab Period 11 3 6 8 13 3 8 13

36. 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 couldn’t, 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.

37. Differences between the classroom and the laboratory … …

38. 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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44. 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