Daniel Gottlieb

Acquisition with partial and continuous reinforcement in pigeon autoshaping

Contemporary time accumulation models make the unique prediction that acquisition of a conditioned response will be equally rapid with partial and continuous reinforcement, if the time between conditioned stimuli is held constant. To investigate this, acquisition of conditioned responding was examined in pigeon autoshaping under conditions of 100% and 25% reinforcement, holding intertrial interval constant. Contrary to what was predicted, evidence for slowed acquisition in partially reinforced animals was observed with several response measures. However, asymptotic performance was superior with 25% reinforcement. A switching of reinforcement contingencies after initial acquisition did not immediately affect responding. After further sessions, partial reinforcement augmented responding, whereas continuous reinforcement did not, irrespective of an animal’s reinforcement history. Subsequent training with a novel stimulus maintained the response patterns. These acquisition results generally support associative, rather than time accumulation, accounts of conditioning.

Perfect Competition in Markets with Adverse Selection

This paper proposes a perfectly competitive model of a market with adverse selection. Prices are determined by zero‐profit conditions, and the set of traded contracts is determined by free entry. Crucially for applications, contract characteristics are endogenously determined, consumers may have multiple dimensions of private information, and an equilibrium always exists. Equilibrium corresponds to the limit of a differentiated products Bertrand game. We apply the model to establish theoretical results on the equilibrium effects of mandates. Mandates can increase efficiency but have unintended consequences. With adverse selection, an insurance mandate reduces the price of low‐coverage policies, which necessarily has indirect effects such as increasing adverse selection on the intensive margin and causing some consumers to purchase less coverage.

Imperfect Memory and Choice Under Risk

This paper presents a model of choice based on imperfect memory and self-deception. I assume that people have preferences over their own attributes (e.g., skill, knowledge, or competence) and can manipulate their memories. The model provides a prior-dependent theory of regret aversion and allows for prior-dependent information attitudes. It implies that behavior will converge to the one predicted by expected utility theory after a choice has been faced a sufficiently large number of times.

Acquisition with partial and continuous reinforcement in rat magazine approach

Partial reinforcement, compared with continuous reinforcement, is widely considered detrimental to Pavlovian conditioned responding. However, time-accumulation models predict an invariance in acquisition when learning is assessed as a function of number of reinforcements, not trials, and intertrial interval is held constant. Three experiments examined this prediction in a rat magazine-approach procedure. All experiments showed superior responding with continuous reinforcement. Experiments 1 and 3 used common tests in between- and within-subject designs, respectively. Experiment 2 showed the same pattern in a discrimination. Earlier results are reanalyzed informally and in a meta-analysis. Contrary to previous summaries of the literature, evidence points to superior conditioned responding with continuous reinforcement in a number of procedures. Results are generally consistent with traditional associative models of learning.

The Informativeness Principle Under Limited Liability

This paper shows that the informativeness principle does not automatically extend to settings with limited liability. Even if a signal is informative about effort, it may have no value for contracting. An agent with limited liability is paid zero for certain output realizations. Thus, even if these output realizations are accompanied by an unfavorable signal, the payment cannot fall further and so the principal cannot make use of the signal. Similarly, a principal with limited liability may be unable to increase payments after a favorable signal. We derive necessary and sufficient conditions for signals to have positive value. Under bilateral limited liability and a monotone likelihood ratio, the value of information is non-monotonic in output, and the principal is willing to pay more for information at intermediate output levels.This paper studies the value of additional performance signals under limited liability. We show that -- contrary to the informativeness principle -- informative signals may have no value, because the payment cannot be adjusted to reflect the signal realization. We derive new conditions for a signal to have value under limited liability, and study how valuable signals should be incorporated into the contract. In a compensation setting, we show precisely how the signal realization should change the number of vesting options and the option strike price, providing guidance for performance-based vesting. Surprisingly, it may be optimal for more options to vest upon a negative signal of effort. In a financing setting, our results also have implications for whether the debt repayment should be performance sensitive.

Experimentation and project selection: Screening and learning

Firms must strike a delicate balance between the exploitation of well-known business models and the exploration of risky, untested approaches. In this paper, we study financial contracting between an investor and a firm with private information about its returns from exploration and exploitation. The investor-optimal mechanism offers contracts with different tolerance for failures to screen returns from exploitation, and with different exposure to the projects revenues to screen returns from exploration. We derive necessary and sufficient conditions for private information about returns from exploration to have zero value to the firm. When these conditions fail, private information about exploration may even decrease the firms payoff.

Risk-neutral firms can extract unbounded profits from consumers with prospect theory preferences

This paper considers the problem of a risk-neutral firm offering a gamble to consumers with preferences given by prospect theory. Under conditions satisfied by virtually all functional forms used in the literature, firms can extract arbitrarily high expected values from consumers. Moreover, for any given lottery, there exists another lottery that makes both the firm and the consumer better off. As a consequence, equilibria and Pareto optimal allocations do not exist in standard monopolistic or competitive models.

Does Improved Information Improve Incentives

This paper studies the value of more precise signals on agent performance in an optimal contracting model with endogenous effort. With limited liability, the agent’s wage is increasing in output only if output exceeds a threshold, else it is zero regardless of output. If the threshold is sufficiently high, the agent only beats it, and is rewarded for increasing output through greater effort, if there is a high noise realization. Thus, a fall in output volatility reduces effort incentives—information and effort are substitutes—offsetting the standard effect that improved information lowers the cost of compensation. We derive conditions relating the incentive effect to the underlying parameters of the agency problem.

Narrow Framing and Long-Term Care Insurance

We propose a model of narrow framing in insurance and test it using data from a new module we designed and fielded in the Health and Retirement Study. We show that respondents subject to narrow framing are substantially less likely to buy long-term care insurance than average. This effect is much larger than the effects of risk aversion or adverse selection, and it offers a new explanation for why people underinsure their later-life care needs.

Effects of partial reinforcement and time between reinforced trials on terminal response rate in pigeon autoshaping.

Partial reinforcement often leads to asymptotically higher rates of responding and number of trials with a response than does continuous reinforcement in pigeon autoshaping. However, comparisons typically involve a partial reinforcement schedule that differs from the continuous reinforcement schedule in both time between reinforced trials and probability of reinforcement. Two experiments examined the relative contributions of these two manipulations to asymptotic response rate. Results suggest that the greater responding previously seen with partial reinforcement is primarily due to differential probability of reinforcement and not differential time between reinforced trials. Further, once established, differences in responding are resistant to a change in stimulus and contingency. Secondary response theories of autoshaped responding (theories that posit additional response-augmenting or response-attenuating mechanisms specific to partial or continuous reinforcement) cannot fully accommodate the current body of data. It is suggested that researchers who study pigeon autoshaping train animals on a common task prior to training them under different conditions.