Helen Pushkarskaya

Beyond risk and ambiguity: Deciding under ignorance

In this study, we examined the neural basis of decision making under different types of uncertainty that involve missing information: ambiguity (vague probabilities) and sample space ignorance (SSI; unknown outcomes). fMRI revealed that these two different types of uncertainty recruit distinct neural substrates: Ambiguity recruits the left insula, whereas SSI recruits the anterior cingulate cortex, bilateral inferior parietal cortex, and the lateral orbitofrontal cortex. The finding of unique activations for different types of uncertainty may not necessarily be predicted within the reductive approach of modern theories of decision making under uncertainty, because these theories purport that humans reduce more complicated uncertain environments to subjectively formed less complicated ones (i.e., SSI to ambiguity). The predictions of the reductive view held only for ambiguityaverse individuals and not for ambiguity-tolerant individuals. Consequently, theories of decision making under uncertainty should include individual tolerance for missing information and how these individual differences modulate the neural systems engaged during decision making. Supplemental materials for this article may be downloaded from http://cabn.psychonomic-journals.org/content/supplemental.

Farming Exit Decision by Age Group: Analysis of Tobacco Buyout Impact in Kentucky

This article analyzes factors that affected the decision to exit tobacco production in the wake of the tobacco buyout program using the data collected through a survey of Kentucky tobacco farmers. Using the Heuristic logistic regression model, we find that the decision to exit tobacco growing was affected by efficiency considerations, availability of off-farm employment, and exit barriers. Availability of off-farm employment had the strongest effect on farmers younger than 46, while the effect of variables measuring efficiency and exit barriers seemed to be more uniform across age groups. Based on the results we suggest several policy interventions.

Lump sum versus annuity: choices of Kentucky farmers during the tobacco buyout program.

Our study uses the data collected during the implementation of the tobacco buyout program in Kentucky to evaluate how rural households, diverse in income, age, family structure, location, education level, and other characteristics, made a choice between annuities and a lump-sum payment. Subjects in our field experiment did not have to retire or change their employment, as did subjects in many field studies of the choice between annuities and lump-sum payments, which allowed us to evaluate the relationship between the option choice and a decision whether to exit the tobacco market. Our results suggest that while discounted utility theory gives acceptable predictions of the farmers’ behavior, other factors have to be taken into consideration. First, there are consistent biases that describe individual intertemporal behavior, such as availability bias or acquiescence bias. Second, there is a certain degree of heterogeneity in individual intertemporal preferences that correlates with their personal characteristics, such as education and production status. Third, our analysis revealed that the decision to exit the tobacco market positively correlated with the decision to take a lump-sum payment.

Value-based decision making under uncertainty in hoarding and obsessive- compulsive disorders

Difficulties in decision making are a core impairment in a range of disease states. For instance, both obsessive- compulsive disorder (OCD) and hoarding disorder (HD) are associated with indecisiveness, inefficient planning, and enhanced uncertainty intolerance, even in contexts unrelated to their core symptomology. We examined decision-making patterns in 19 individuals with OCD, 19 individuals with HD, 19 individuals with comorbid OCD and HD, and 57 individuals from the general population, using a well-validated choice task grounded in behavioral economic theory. Our results suggest that difficulties in decision making in individuals with OCD (with or without comorbid HD) are linked to reduced fidelity of value-based decision making (i.e. increase in inconsistent choices). In contrast, we find that performance of individuals with HD on our laboratory task is largely intact. Overall, these results support our hypothesis that decision-making impairments in OCD and HD, which can appear quite similar clinically, have importantly different underpinnings. Systematic investigation of different aspects of decision making, under varying conditions, may shed new light on commonalities between and distinctions among clinical syndromes.

What Did They Do with the Money? An Analysis of Tobacco Buyout Recipients’ Expenditure Choices

There are many expenditure options available to farmers who received a tobacco buyout check. A multinomial probit model is used to analyze how farmer, business, and household characteristics influence the choice of expenditure option. Results of the study show that farmers tend to use the tobacco buyout payments as a special income account which they spend in a focused manner, and their expenditure choices vary by gender and by age groups. Findings also reveal that farmers who plan to stay in tobacco production are more likely to invest in new or existing on-farm activities.

Personal Discount Rates: Evidence from the Tobacco Buyout Program

The tobacco buyout program affected a number of southern states, including Kentucky, providing a unique opportunity to study how individuals actually make choices involving large sums of money. This natural experiment, allowed us to measure the personal discount rates for Kentucky tobacco farmers, who are heterogeneous in terms of age, education, income, and other economic and non-economic factors. Results of our analysis suggest that personal characteristics, such as confidence, experienced interruptions in the regular family routine, defensive avoidance and attitude toward various sources of information, not an individuals demographic profile, influence the personal discount rate.

Unbending mind: Individuals with hoarding disorder do not modify decision strategy in response to feedback under risk

Cognitive-behavioral models of hoarding disorder emphasize impairments in information processing and decision making in the genesis of hoarding symptomology. We propose and test the novel hypothesis that individuals with hoarding are maladaptively biased towards a deliberative decision style. While deliberative strategies are often considered normative, they are not always adaptable to the limitations imposed by many real-world decision contexts. We examined decision-making patterns in 19 individuals with hoarding and 19 healthy controls, using a behavioral task that quantifies selection of decision strategies in a novel environment with known probabilities (risk) in response to feedback. Consistent with prior literature, we found that healthy individuals tend to explore different decision strategies in the beginning of the experiment, but later, in response to feedback, they shift towards a compound strategy that balances expected values and risks. In contrast, individuals with hoarding follow a simple, deliberative, risk-neutral, value-based strategy from the beginning to the end of the task, irrespective of the feedback. This seemingly rational approach was not ecologically rational: individuals with hoarding and healthy individuals earned about the same amount of money, but it took individuals with hoarding a lot longer to do it: additional cognitive costs did not lead to additional benefits.

Constructing a multi-dimensional measure of local entrepreneurial culture

This article proposes a scale that measures the local entrepreneurial culture of a place based on residents’ perceptions. The initial 36-item pool was developed through semi-structured interviews with entrepreneurs and non-entrepreneurs in Kentucky (USA) and then reviewed by a focus group composed of entrepreneurship coaches. These items were included in an extensive survey of rural and urban Kentuckians. Factor analysis resulted in a 17-item scale with four major components. To ascertain the predictive validity of the subscales, a series of analysis of covariance (ANCOVA) models evaluated their correlations with county-level rates of entrepreneurship obtained from an independent data set. The analysis confirmed that perceptions of the local entrepreneurial culture do correlate with entrepreneurial activity. In line with the theoretical model presented in this article, the ANCOVAs also controlled for the modulating effect of important individual-level characteristics and regional factors. The proposed scale is recommended for use by entrepreneurship support programs that provide one-on-one assistance for small businesses, yet seldom assess nor consider how they might improve the entrepreneurial culture of the place where these businesses operate. Furthermore, this measure is an important contribution to entrepreneurship research. Existing measures of entrepreneurial culture focus mostly on the regional and national levels, overlooking the role of local cultural characteristics; they also tend to focus on general cultural attributes rather than on residents’ perceptions of the entrepreneurial climate. This entrepreneurship culture scale opens the door to new directions in research.

A Self-Enforcing Cooperative Agreement for Nonpoint Source Pollution Abatement

In this paper we propose a scheme to control non-point source water pollution that employs subsidies to foster voluntary cooperation among farmers and, in that respect, is aligned with the traditional reliance in US water quality policy on voluntary programs aimed at persuading farmers to use environmentally friendly practices designed to improve water quality (Segerson and Wu, 2006). Unlike other voluntary programs, however, the approach proposed here is incentive-compatible so that compliance with cooperative agreements to abate is the optimal strategy for those who enter voluntarily into them.

Schemes to Regulate Non-Point Water Pollution: Making Sense of Experimental Results

Three theoretical non-point water pollution (NPS) control schemes were tested repeatedly in experimental studies tax-subsidy scheme (K. Segerson, 1988), collective fining (Xepapadeas, 1991) and random fining (Xepapadeas, 1991). Camacho and Requate (2004) summarized results reported by Spraggon (2002), Vossler et al (2002), Cochard et al (2002), and Alpizar et al (2004) and replicated their experiments. This paper discusses similarity and differences among all the reported results and in particular the following two. First, both collective fining and random fining induce abatement under the target, their performance deteriorates over time and is relatively consistent over the replications. Second, tax-subsidy scheme induced abatement over the target, its performance is consistent over periods, but not over the replications.