Abdelaziz Alsharawy, Xiaomeng Zhang, Sheryl Ball, Alec Smith
{"title":"Incentives Modulate Arousal and Attention in Risky Choice","authors":"Abdelaziz Alsharawy, Xiaomeng Zhang, Sheryl Ball, Alec Smith","doi":"10.2139/ssrn.3943681","DOIUrl":"https://doi.org/10.2139/ssrn.3943681","url":null,"abstract":"We investigated the effect of large changes in financial incentives on the process of decision-making by measuring autonomic arousal and visual attention during an incentivized lottery-choice task. High real stakes were accompanied by increased risk aversion and physiological arousal, and by shifts in attention toward safer alternatives. These effects were manifested both within and between individuals. We find no evidence that heightened risk aversion is a mistake. To capture the interactions of arousal and attention with subjective value during evidence accumulation, we developed and fit a new arousal-modulated Attentional Drift Diffusion model (aADDM). Our computational model demonstrates that arousal amplifies discounting of high-valued outcomes when participants attended to low-valued outcomes. Arousal and attention, and their interaction, are integral to the process of decision-making under risk.","PeriodicalId":340311,"journal":{"name":"DecisionSciRN: Other Neuroeconomics (Sub-Topic)","volume":"10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-10-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114148890","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Outlier Blindness: A Neurobiological Foundation for Neglect of Financial Risk","authors":"Elise Payzan-LeNestour, M. Woodford","doi":"10.2139/ssrn.3701471","DOIUrl":"https://doi.org/10.2139/ssrn.3701471","url":null,"abstract":"How do people record information about the outcomes they observe in their environment? Building on a well-established neuroscientific framework, we propose a model in which people are hampered in their perception of outcomes that they expect to seldom encounter. We provide experimental evidence for such ‘outlier blindness’ and discuss how it provides a microfoundation for neglected tail risk by investors in financial markets.","PeriodicalId":340311,"journal":{"name":"DecisionSciRN: Other Neuroeconomics (Sub-Topic)","volume":"52 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-10-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129395546","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}