Florian Artinger

In Others' Shoes: Do Individual Differences in Empathy and Theory of Mind Shape Social Preferences?

Abundant evidence across the behavioral and social sciences suggests that there are substantial individual differences in pro-social behavior. However, little is known about the psychological mechanisms that underlie social preferences. This paper investigates whether empathy and Theory of Mind shape individual differences in pro-social behavior as conventionally observed in neutrally framed social science experiments. Our results show that individual differences in the capacity for empathy do not shape social preferences. The results qualify the role of Theory of Mind in strategic interaction. We do not only show that fair individuals exhibit more accurate beliefs about the behavior of others but that Theory of Mind can be effectively used to pursue both self-interest and pro-social goals depending on the principle objectives of a person.

Environmental Behavior and Fast and Frugal Heuristics

An important prerequisite to encourage pro-environmental behavior is to understand how people make decisions. Specifically, humans are often confronted with an environment that exhibits considerable uncertainty due to limited time, information, and computational capacity. In such a context, Homo oeconomicus is not necessarily the benchmark by which to judge human actions. Instead, research on pro-environmental behavior should be based on a theory of bounded rationality that takes seriously and provides details on how people process different kinds of information. We review the work previously done on a number of simple, psychologically plausible decision strategies, or fast and frugal heuristics, that have been shown to perform well in an uncertain environment. We put special emphasis on showing under what conditions this holds and speculate on the bearing that fast and frugal heuristics might have on understanding and improving pro-environmental behavior.

Heuristic Pricing in an Uncertain Market: Ecological and Constructivist Rationality

How do firms set prices when faced with an uncertain market? Analyzing the pricing strategies of used car dealers using online data and interviews, we find that dealers employ an aspiration level heuristic similar to a Dutch auction. At the same time, the aggregate market is well described by a model of equilibrium price dispersion. Unlike the equilibrium model, the heuristic correctly predicts systematic pricing characteristics such as high initial price, price stickiness, and the “cheap twin paradox.” We also find first evidence that heuristic pricing can generate higher profits given uncertainty than the equilibrium strategy.

“Big data” needs an analysis of decision processes

We demonstrate by means of a simulation that the conceptual map presented by Bentley et al. is incomplete without taking into account peoples decision processes. Within the same environment, two decision processes can generate strikingly different collective behavior; in two environments that fundamentally differ in transparency, a single process gives rise to virtually identical behavior.