1. The ecology of competition: A theory of risk–reward environments in adaptive decision making
- Author
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Ralph Hertwig, Larissa Conradt, Timothy J. Pleskac, and Christina Leuker
- Subjects
Competitive Behavior ,Ideal free distribution ,Computer science ,Ecology ,Ecology (disciplines) ,Association (object-oriented programming) ,Decision Making ,05 social sciences ,Risk Assessment ,050105 experimental psychology ,bepress|Social and Behavioral Sciences|Psychology|Cognitive Psychology ,PsyArXiv|Social and Behavioral Sciences ,Resource (project management) ,Empirical research ,Reward ,PsyArXiv|Social and Behavioral Sciences|Cognitive Psychology|Judgment and Decision Making ,bepress|Social and Behavioral Sciences ,PsyArXiv|Social and Behavioral Sciences|Cognitive Psychology ,Humans ,0501 psychology and cognitive sciences ,Set (psychology) ,Heuristics ,General Psychology ,Ecological rationality ,Probability - Abstract
In many choice environments, it seems that risks and rewards or probabilities and payoffs are tightly coupled such that high payoffs only occur with low probabilities. This structure may, in the face of uncertainty, afford an adaptive mind an opportunity to exploit it---for instance, by using the size of potential rewards to infer otherwise unknown probabilities of obtaining them. However, a mind can only adapt to and exploit an environmental structure if it is frequent and recurrent. We show that the ecology of competition makes the association of high rewards with low probabilities ubiquitous. It is a consequence of an ecological principle known as the ideal free distribution. This principle posits that the number of competitors in a resource patch is proportional to the gross total amount of resources in it. This principle implies a predictable inverse relationship between probabilities and payoffs, the risk\--reward structure. Harnessing this principle, we develop an ecological theory that identifies important boundary conditions for the structure. For instance, heterogeneity of resources in a given patch, computational limits among competitors, and scarcity of resources, systematically distort the risk-reward structure. Finally, we show that peoples mental representations of the risk--reward structure often conform to the distortions that are associated with these different ecological conditions. Grounding peoples inferences in the theory of the competitive risk-reward ecology makes it possible to predict when an adaptive decision maker should use the risk-reward structure. In sum, our framework demonstrates that the predictability of specific behaviors of a boundedly rational mind will only be possible if theories of the mind and the environment are coupled.
- Published
- 2021
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