Human research

Behavioural economics

Research Project in Elengata Wuas, Kenya

To get a good idea about the reality of decision making, it is absolutely essential to look beyond research in the isolated environment of the laboratory, and apply the insights gained from well-controlled lab experiments to the richness of the real world. To this end, we collaborate with archeologist Caroline Archambault, economist Joost de Laat and neuroscientist Johannes Haushofer on a range of projects. One of them is situated in Elangata Wuas, in the Kajiado district of Maasailand in South-Western Kenya.

With the help of field workers from the local communities, we measure intertemporal choice and pro-social decision making among the Maasai. For example, we use the 'Dictator Game' to measure generosity towards peers. In the dictator game, a subject, dubbed the ‘dictator’, is endowed with a fixed amount of money (or any other commodity) and she is asked to distribute this pie between her and another player, the recipient. The distribution of shares is usually taken as a proxy of the subject’s generosity. The pictures below give a good impression of our research and how exciting science can be.

Neuroeconomics

Economics is, in a nutshell, the sum of all actions that are aimed at meeting the human demands and needs. This especially implies decisions concerning the retrieval, consumption and division of goods. In most of the cases, the economic principles at hand are based upon abstract, mathematically founded behavioural models. These models dictate normative decision making, assuming that individuals strive persistently for a maximization of their own utility or the benefit of a group of individuals they belong to.In the wake of neuropsychology and imaging techniques in particular, many of these economic principles have been examined in human and animal research setups. This interdisciplinary endeavour created another branch of research: neuroeconomics, which focuses on decision making in individuals facing economic scenarios. For the first time it was possible to explore the brain for neural correlates of the individual processes which finally lead to decision making, such as risk calculation, or the subjective valuation of behavioural alternatives.Soon this branch of research detected inconsistencies between the neurological findings on the one hand and the generally accepted vintage economical presumptions on the other. An example at hand are decisions involving intertemporal choices. With economics stating that an individual acts as a ‘homo oeconomicus‘ and is therefore capable of managing available resources in terms of present and prospective needs, neurological experiments demonstrated a strong tendency in individuals towards current consumption, the so-called ‘present bias‘. This phenomenon also applies for the evasion of punishments or aversive events. Everyone is familiar with the discomforting situation of the upcoming appointment at the dentist and the preference to shift this event into the distant future, even if a higher amount of pain is about to be involved in this decision. Another example for an inconsistency is instability of preferences. Economists propose that an individual axiomatically needs solid preferences in order to act rationally. If one prefers option A over option B and option B is again preferred over option C, the economical principle concludes that option A is automatically preferred over option C in every possible situation. However, neuroeconomical experiments proved this assumption wrong. Many of the actual mental mechanisms underlying economic choice are implicitly anchored in our human nature. However, not only humans behave that way, but many of the behavioral violations of economic principles can be found in animal behavior, too, suggesting that there are evolutionary roots to the way we make decisions. For instance, rats develop „altruistic“-like behavioural patterns, birds resemble humans in intertemporal decision-making and assessment of risks, monkeys demonstrate the same fallacies in their stability of preferences. This leads to the idea that the development of economic principles must have taken place at an early level in the course of evolution and served as functions that benefitted the survival of species. Concluding, animals which had developed these economic principles were at an evolutionary advantage which facilitated survival for their offspring and themselves. This consideration brought forth the branch of comparative psychology. Hence, comparative psychology tries to translate the findings in animal neuroeconomic studies to human behaviour. By these means we attempt to explore why we humans make decisions, be they good or bad, the way we do.