Psychological Norm,Attention And Emotion

The rational choice theory utilized by the neoclassical micro-economic theory defines rationality by the consistency among choice behaviors across contexts,where contexts are defined as the choice problem or budget constraint the deci-sion maker is involved in.For a long time,behavioral economists find that the observed real but anomalous choice behaviors are obviously context-dependent.On one hand,choice behaviors in different choice behaviors are often violating the weak axiom of revealed preference,or equivalently,the transitivity axiom,which falsifies the rationality assumption directly.On the other hand,the key parameters economists used to describe choice behaviors all take different value in different contexts,such like risk preference,time preference and marginal propen-sity of consumption in the traditional models and other-regarding preference in behavioral models.While the latter can be explained in a traditional manner by making the utility function more complicated,the former must not be studied by the traditional framework.To provide a unified framework to expain context-dependence,this paper se-lects three core concepts from psychology,including psychological norm,atten-tion and emotion,to develop a general theory.The theory is founded upon the following assumptions:First,when the decision maker is evaluating an option,the weight assigned to the attributes are determined by their ability to attract attention,and a better ability to attract attention will lead to a higher weight.Second,the ability an attribute attracts attention is determined by the maximum distance between options and the psychological norm,and relatively speaking,the attention weight is positivily propotional to the maximum distance.Third the way emotion affects value judgment is through the "zero-valence point" defined by the emotional feeling,and the distance between an outcome and the psychological norm will be additionally large when they locate on different sides of the zero-valence point.Thus,the key prediction of the theory is that the relative position between the psychological norm and the zero-valence point in the dual-reference point system of evaluation.When the psychological norm is lower than the zero-valence point,the decision maker will aggressively "do something" to change the status quo,while when the psychological norm is higher than the zero-valence point,the decision maker will behave conservatively and have a strong willing to avoid bad outcomes.Based on this theoretical framework,this paper studies two types of decision problems,risk decisions and information decisions.In risk decisions,this paper defines the psychological norm as the option that maximizes its worst,potential,and then if the psychological norm and zero-valence point coincide,the focus-ing model is sufficed to explain the observed regularity that people over-react to extreme outcomes with small probabilities;that is,people pursue good out-comes with small probabilities and avoid bad outcomes with small probabilities disproportionately.If the two reference points are detached,the classical fourfold pattern of risk attitude can be predicted with only three free parameters and no curves,which is impossible in the traditional approach.In the information deci-sion,this paper shows that "prior-dependent information attitude",that people prefer to know the information when the content of it is expected to be good and prefer not to know the information when the content of it is expected to be bad,can be understood as context-dependence.This preference pattern cannot be pre-dicted by the traditional framework,and this paper interprets this phenomenon by decomposing the whole choice over an information structure as a choice of the prior belief and a subsequent choice of the temporal arrangement of informa-tion.In this dynamic choice setting,the first choice of prior belief determines the context that the second choice of temporal arrangement of information depends on.By connecting such contexts dependence,this paper gives a psychological interpretation of prior-dependence.Due to the limitation of human coginition and memory,in the historical pro-cess that psychological norm changes,different psychological norms in different contexts must be evolved to have some relationships.However,if the micro-agency of the traditional model is not shifted,these relationships cannot be fully understood.This paper introduces the hypothesis of "daptive analogy maker"in which the decision maker stores only a set of "propotype contexts" and their corresponding psychological norms in her memory,and making new psychologi-cal norms by analogy and propotype matching when the decision maker is in a non-propotype context.Therefore,the results of context-dependent choice be-haviors constitutes the feedback of the learning process,and generates a new psychological norm via a specified adjustment process.However,the speed of this shift is limited by the psychological phenomenon of cognitive dissonance:In the framework of Bayesian decision making,the motivation to rationalize the for-mer choice will make the speed psychological norms shift under expectation,and the behavioral consequence of it is also studied.