Briony D. Pulford

Overconfidence: Feedback and item difficulty effects

Abstract Overconfident subjects were given immediate feedback of results in a general knowledge test in an attempt to de-bias them. In a 2 × 3 × 4 mixed factorial design (Feedback × Question Difficulty × Trial Blocks), the accuracy, confidence, and overconfidence of judgements of 150 subjects (48 male and 102 female) were measured. Hard questions produced significantly higher levels of overconfidence than medium-difficulty and easy questions, which in turn resulted in underconfidence. Combining all levels of difficulty, females were significantly less overconfident than males. No significant effect of external feedback was found, although better calibration in latter trial blocks for hard-level questions suggests that intrinsic feedback through self-monitoring occurred, but was effective in reducing the bias only for hard questions.

Is Luck on My Side? Optimism, Pessimism, and Ambiguity Aversion

The influences of optimism and pessimism on ambiguity aversion were investigated in two tasks that manipulated the presence or absence of a potentially competitive experimenter. A total of 112 participants chose which option—ambiguous or known-risk—they preferred in the two slightly differing Ellsberg urns tasks. Optimism was measured using the Extended Life Orientation Test (ELOT). Highly optimistic people showed significantly less ambiguity aversion than less optimistic people when information was given that the number of balls was randomly determined. This pattern was present but less pronounced in the condition when the composition of the ambiguous urn could be interpreted as being influenced (rigged) by the experimenter. Pessimism was uninfluential. Perceptions of the situation, especially the degree of trust in the experimenter, were significantly influenced by the participants’ optimism. People who do not have highly optimistic personalities tend to shy away from choosing ambiguous options. When ambiguity is clear, and trust issues are removed, peoples optimistic outlook influences their degree of ambiguity aversion and thus their decisions.

Size Doesn't Really Matter: Ambiguity Aversion in Ellsberg Urns with Few Balls.

When attempting to draw a ball of a specified color either from an urn containing 50 red balls and 50 black balls or from an urn containing an unknown ratio of 100 red and black balls, a majority of decision makers prefer the known-risk urn, and this ambiguity aversion effect violates expected utility theory. In an experimental investigation of the effect of urn size on ambiguity aversion, 149 participants showed similar levels of aversion when choosing from urns containing 2, 10, or 100 balls. The occurrence of a substantial and significant ambiguity aversion effect even in the smallest urn suggests that influential theoretical interpretations of ambiguity aversion may need to be reconsidered.

Ambiguous games: evidence for strategic ambiguity aversion.

The problem of ambiguity in games is discussed, and a class of ambiguous games is identified. A total of 195 participants played strategic-form games of various sizes with unidentified co-players. In each case, they first chose between a known-risk game involving a co-player indifferent between strategies and an equivalent ambiguous game involving one of several co-player types, each with a different dominant strategy, and then they chose a strategy for the preferred game. Half the players knew that the ambiguous co-player types were equally likely, and half did not. Half expected the outcomes to be known immediately, and half expected a weeks delay. Known-risk games were generally preferred, confirming a significant strategic ambiguity aversion effect. In the delay conditions, players who knew that the ambiguous co-player types were equally likely were significantly less ambiguity averse than those who did not. Decision confidence was significantly higher in 2 × 2 than in larger games.

Market Entry Decisions

In a market entry game, the number of entrants usually approaches game-theoretic equilibrium quickly, but in real-world markets business start-ups typically exceed market capacity, resulting in chronically high failure rates and suboptimal industry profits. Excessive entry has been attributed to overconfidence arising when expected payoffs depend partly on skill. In an experimental test of this hypothesis, 96 participants played 24 rounds of a market entry game, with expected payoffs dependent partly on skill on half the rounds, after their confidence was manipulated and measured. The results provide direct support for the hypothesis that high levels of confidence are largely responsible for excessive entry, and they suggest that absolute confidence, independent of interpersonal comparison, rather than confidence about ones abilities relative to others, drives excessive entry decisions when skill is involved.

Spontaneous similarity discrimination in the evolution of cooperation.

The similarity discrimination effect occurs when a single gene or gene cluster causes its carriers to display both a variable phenotypic trait and a behavioural predisposition to cooperate preferentially with recognisably similar carriers. We distinguish this from the greenbeard effect, in which cooperation evolves through fixed phenotypic tags and genetically linked cooperative behaviour with others displaying the same tag. Our agent-based simulations show that the evolution of cooperation through similarity discrimination, in contrast to the greenbeard effect, does not depend on population viscosity or other restrictive conditions. Similarity discrimination evolves spontaneously in well mixed populations, not only in the Prisoners Dilemma game but also across a range of different binary-choice strategic interactions, provided that agents can distinguish reliably between similar and dissimilar co-players.

Verbal Expressions of Confidence and Doubt

The development of a taxonomy of expressions expressing the degree of confidence or certainty felt in the correctness of ones judgments, knowledge, or beliefs is reported. 30 phrases expressing confidence and doubt were rated by 96 British participants on a 7-point scale to indicate how much confidence or doubt they felt each phrase expressed. The expressions were rank ordered, based on their mean ratings, to produce a continuum of cues expressing confidence, ranging from high to low. 9 of the 30 expressions were rated as expressing lower confidence when phrased in the past tense than in the present tense. The expressions reported in this study form a useful tool for researchers who are investigating the communication of confidence and degrees of belief, especially in relation to giving advice, influence, and persuasion.

YOUR MONEY OR YOUR LIFE: COMPARING JUDGEMENTS IN TROLLEY PROBLEMS INVOLVING ECONOMIC AND EMOTIONAL HARMS, INJURY AND DEATH

There is a long-standing debate in philosophy about whether it is morally permissible to harm one person in order to prevent a greater harm to others and, if not, what is the moral principle underlying the prohibition. Hypothetical moral dilemmas are used in order to probe moral intuitions. Philosophers use them to achieve a reflective equilibrium between intuitions and principles, psychologists to investigate moral decision-making processes. In the dilemmas, the harms that are traded off are almost always deaths. However, the moral principles and psychological processes are supposed to be broader than this, encompassing harms other than death. Further, if the standard pattern of intuitions is preserved in the domain of economic harm, then that would open up the possibility of studying behaviour in trolley problems using the tools of experimental economics. We report the results of two studies designed to test whether the standard patterns of intuitions are preserved when the domain and severity of harm are varied. Our findings show that the difference in moral intuitions between bystander and footbridge scenarios is replicated across different domains and levels of physical and non-physical harm, including economic harms.

Social Value Induction and Cooperation in the Centipede Game

The Centipede game provides a dynamic model of cooperation and competition in repeated dyadic interactions. Two experiments investigated psychological factors driving cooperation in 20 rounds of a Centipede game with significant monetary incentives and anonymous and random re-pairing of players after every round. The main purpose of the research was to determine whether the pattern of strategic choices observed when no specific social value orientation is experimentally induced—the standard condition in all previous investigations of behavior in the Centipede and most other experimental games—is essentially individualistic, the orthodox game-theoretic assumption being that players are individualistically motivated in the absence of any specific motivational induction. Participants in whom no specific state social value orientation was induced exhibited moderately non-cooperative play that differed significantly from the pattern found when an individualistic orientation was induced. In both experiments, the neutral treatment condition, in which no orientation was induced, elicited competitive behavior resembling behavior in the condition in which a competitive orientation was explicitly induced. Trait social value orientation, measured with a questionnaire, influenced cooperation differently depending on the experimentally induced state social value orientation. Cooperative trait social value orientation was a significant predictor of cooperation and, to a lesser degree, experimentally induced competitive orientation was a significant predictor of non-cooperation. The experimental results imply that the standard assumption of individualistic motivation in experimental games may not be valid, and that the results of such investigations need to take into account the possibility that players are competitively motivated.

Competitive centipede games: Zero-end payoffs and payoff inequality deter reciprocal cooperation

Reciprocal cooperation can be studied in the Centipede game, in which two players alternate in choosing between a cooperative GO move and a non-cooperative STOP move. GO sustains the interaction and increases the player pair’s total payoff while incurring a small personal cost; STOP terminates the interaction with a favorable payoff to the defector. We investigated cooperation in four Centipede games differing in their payoffs at the game’s end (positive versus zero) and payoff difference between players (moderate versus high difference). The games shared the same game-theoretic solution, therefore they should have elicited identical decision patterns, according to orthodox game theory. Nevertheless, both zero-end payoffs and high payoff inequality were found to reduce cooperation significantly. Contrary to previous predictions, combining these two factors in one game resulted in a slight weakening of their independent deterrent effects. These findings show that small changes in the payoff function have large and significant effects on cooperation, and that the effects do not combine synergistically.