Why we should use animals to study economic decision making - a perspective

Abstract

Despite the rich tradition in psychology and biology, animals as research subjects have never gained a similar acceptance in microeconomics research. With this article, we counter this trend of negligence and try to convey the message that animal models are an indispensible complement to the literature on human economic decision making. This perspective review departs from a description of the similarities in economic and evolutionary theories of human and animal decision making, with particular emphasis on the optimality aspect that both classes of theories have in common. In a second part, we outline that actual, empirically observed decisions often do not conform to the normative ideals of economic and ecological models, and that many of the behavioral violations found in humans can also be found in animals. In a third part, we make a case that the sense or nonsense of the behavioral violations of optimality principles in humans can best be understood from an evolutionary perspective, thus requiring animal research. Finally, we conclude with a critical discussion of the parallels and inherent differences in human and animal research.

Keywords: animals; behavioral ecology; decision making; ethology; neuroeconomics; optimal foraging; rational; reward.

Figure 1

Utility functions can explain risk attitude according to expected utility theory and risk sensitivity theory. (A) Utility (for humans) or Darwinian fitness (for animals) as a function of the magnitude of a commodity. The utility/fitness curve is concave and is a decelerating function of the current level of stimulus magnitude (wealth/amount) because the marginal utility/fitness increment decreases with increasing level of stimulus magnitude. A concave utility/fitness function predicts risk aversion when choosing between a medium-sized, certain reward (R_M) and a risky option offering large or small rewards (R_S and R_L) with equal probabilities. (B) A convex function predicts risk proneness.

Figure 2

Constant vs. hyperbolic discounting of future events. The figure describes a choice between a small, short-term outcome or a large, long-term outcome (proximal), and another situation in which both outcomes are deferred into the future by the same time interval (distant). (A) Constant (here: exponential) utility function of a large, delayed (gray line) and small, short-term commodity (black line). With exponential discounting, preference stationarity holds when the rewards are deferred by the same time interval into the future. (B) People seem to place a premium on short-term availability of rewards, deflecting the discount into an upward direction for temporally close rewards. The resulting hyperbolic discount function can explain preference reversals over time. Due to the steeper utility decay for short delays, the utility of the small, short-term commodity is higher than the large, delayed reward for temporally proximal outcomes, but the utility order reverses when both outcomes are deferred into the future.