Fundamental Goals and Decision Making

Project: Research project

Description

We propose a program of studies bridging theoretical ideas at the interface of social psychology and evolutionary biology with research and theory at the interface of economics and cognitive psychology. This work has potential for broad theoretical advances with critical relevance to important everyday decisions. Each day, people choose between different investment packages for retirement, health insurance policies that vary widely in price and type of protection, and the like. People also need to apportion limited time and effort to various activities and life goals, balancing stability versus rapid ascendance on the job, for example, or prioritizing achievement at work versus time with ones family. Even seemingly small decisions can have tremendous repercussions decades later. Shying away from a slightly riskier investment strategy, for example, could cost hundreds of thousands of dollars in retirement savings. Allocating immense effort to rising in the ranks could compromise relationships with friends and family. How might such critical decisions be affected by fluctuations in everyday motivations? Over the last several years, our lab has been conducting research examining how basic cognitive processes (attention, encoding, and memory) are affected by fundamental everyday motivations (such as self-protection, mating, or status). This line of empirical work, influenced by theoretical developments at the interface of evolutionary biology, cognitive science, and social psychology, has been highly productive. The proposed new research links our previous work with a line of research and theory at the interface of social cognitive psychology and economics. Integrating these approaches, we suggest that traditional psycho-economic functions governing risk-seeking/loss-aversion, discounting of future benefits, and budget allocation, vary in predictable ways as a function of which functionally-relevant goal is currently prioritized. Our conceptual analyses suggest multiple novel predictions, including the reversals of loss-aversion, conditions when marginal utility may increase rather than diminish, and contexts that may lead people to become risk-seeking in one domain, but risk-averse in another. We propose 20 conceptually related studies examining variation in decision-making as a function of shifting individuals focus towards different fitness-relevant problems. Using methods developed in our lab, each experiment manipulates different fundamental motivations (such as status seeking, self-protection, kin care, disease avoidance, or mating), and examines the effects of such motivations on decisions about economic risks or trade-offs between different desirable economic and social outcomes. Studies 1-2 examine risk in financial investing; studies 3-8 explore discounting of future versus probabilistic benefits; studies 9-12 focus on financial loss aversion; studies 13-14 examine loss aversion to different social benefits; studies 15-16 examine budget allocation between different economic and social outcomes; and studies 17-20 examine budget allocation between different outcomes in micro- versus macroeconomic decisions. The studies will be conducted at multiple geographical locations across samples that vary in age, ethnicity, nationality, and disciplinary backgrounds (e.g., economics vs. psychology). We will also assess the effects of chronic individual differences in relevant motivations and examine the influence of key demographic variables (e.g., gender, SES) on economic decisions. This research will make several intellectual contributions, (1) linking research on risky decision-making and allocation of scarce resources with ecologically inspired theories of motivation and cognition, (2) enhancing theoretical links between sub-areas of psychology and conceptual advances in biology, economics, and anthropology, (3) providing rigorous empirical tests of the ideas proposed, and (4) developin
StatusFinished
Effective start/end date7/15/096/30/13

Funding

  • NSF-ENG: Division of Biological & Critical Systems (BCS): $517,500.00

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Decision making
Economics
Loss aversion
Budget allocation
Discounting
Psychology
Risk seeking
Evolutionary biology
Cognitive psychology
Social Psychology
Self-protection
Retirement
Health insurance
Cognition
Investing
Compromise
Cognitive science
Macroeconomics
Fluctuations
Empirical test