the implication of social cognition for experimental economics From the issue entitled "Special issue on Experimental economics and the social embedding of economic behavior and cognition"

Can human social cognitive processes and social motives be grasped by the methods of experimental economics? Experimental studies of strategic cognition and social preferences contribute to our understanding of the social aspects of economic decisions making. Yet, papers in this issue argue that the social aspects of decision-making introduce several difficulties for interpreting the results of economic experiments. In particular, the laboratory is itself a social context, and in many respects a rather distinctive one, which raises questions of external validity.

The cost of choice: how corporate real estate managers evaluate business space options

Firms are faced with a wider set of choices when they identify a need for new office space. They can build or purchase accommodation, lease space for long or short periods with or without the inclusion of services, or they can use “instant office” solutions provided by serviced office operators. But how do they evaluate these alternatives and are they able to make rational choices? The research found that the shortening of business horizons lead to the desire for more office space on short-term contracts often with the inclusion of at least some facilities management and business support services. The need for greater flexibility, particularly in financial terms, was highlighted as an important criteria when selecting new office accommodation. The current office portfolios held were perceived not to meet these requirements. However, there was often a lack of good quality data available within occupiers which could be used to help them analyse the range of choices in the market. Additionally, there were other organisational constraints to making decisions about inclusive real estate products. These included fragmentation of decisions-making, internal politics and the lack of assessment of business risk alongside real estate risk. Overall therefore, corporate occupiers themselves act as an interial force to the development of new and innovative real estate products.

Right ventromedial and dorsolateral prefrontal cortices mediate adaptive decisions under ambiguity by integrating choice utility and outcome evaluation.

The Iowa gambling task (IGT) is one of the most influential behavioral paradigms in reward-related decision making and has been, most notably, associated with ventromedial prefrontal cortex function. However, performance in the IGT relies on a complex set of cognitive subprocesses, in particular integrating information about the outcome of choices into a continuously updated decision strategy under ambiguous conditions. The complexity of the task has made it difficult for neuroimaging studies to disentangle the underlying neurocognitive processes. In this study, we used functional magnetic resonance imaging in combination with a novel adaptation of the task, which allowed us to examine separately activation associated with the moment of decision or the evaluation of decision outcomes. Importantly, using whole-brain regression analyses with individual performance, in combination with the choice/outcome history of individual subjects, we aimed to identify the neural overlap between areas that are involved in the evaluation of outcomes and in the progressive discrimination of the relative value of available choice options, thus mapping the two fundamental cognitive processes that lead to adaptive decision making. We show that activation in right ventromedial and dorsolateral prefrontal cortex was predictive of adaptive performance, in both discriminating disadvantageous from advantageous decisions and confirming negative decision outcomes. We propose that these two prefrontal areas mediate shifting away from disadvantageous choices through their sensitivity to accumulating negative outcomes. These findings provide functional evidence of the underlying processes by which these prefrontal subregions drive adaptive choice in the task, namely through contingency-sensitive outcome evaluation.

Mathematical modelling of decision making processes in construction projects

Many different individuals, who have their own expertise and criteria for decision making, are involved in making decisions on construction projects. Decision-making processes are thus significantly affected by communication, in which a dynamic performance of human intentions leads to unpredictable outcomes. In order to theorise the decision making processes including communication, it is argued here that the decision making processes resemble evolutionary dynamics in terms of both selection and mutation, which can be expressed by the replicator-mutator equation. To support this argument, a mathematical model of decision making has been made from an analogy with evolutionary dynamics, in which there are three variables: initial support rate, business hierarchy, and power of persuasion. On the other hand, a survey of patterns in decision making in construction projects has also been performed through self-administered mail questionnaire to construction practitioners. Consequently, comparison between the numerical analysis of mathematical model and the statistical analysis of empirical data has shown a significant potential of the replicator-mutator equation as a tool to study dynamic properties of intentions in communication.

Assessing the impact of the 'Decoupling' reform of the common agricultural policy on Irish farmers' off-farm labour market participation decisions

This paper assesses the impact of the 'decoupling' reform of the Common Agricultural Policy on the labour allocation decisions of Irish farmers. The agricultural household decision-making model provides the conceptual and theoretical framework to examine the interaction between government subsidies and farmers' time allocation decisions. The relationship postulated is that 'decoupling' of agricultural support from production would probably result in a decline in the return to farm labour but it would also lead to an increase in household wealth. The effect of these factors on how farmers allocate their time is tested empirically using labour participation and labour supply models. The models developed are sufficiently general for application elsewhere. The main findings for the Irish situation are that the decoupling of direct payments is likely to increase the probability of farmers participating in the off-farm employment market and that the amount of time allocated to off-farm work will increase.

Deconstruction plan assessment using multi-criteria decision-making methods

The purpose of this paper is to present two multi-criteria decision-making models, including an Analytic Hierarchy Process (AHP) model and an Analytic Network Process (ANP) model for the assessment of deconstruction plans and to make a comparison between the two models with an experimental case study. Deconstruction planning is under pressure to reduce operation costs, adverse environmental impacts and duration, in the meanwhile to improve productivity and safety in accordance with structure characteristics, site conditions and past experiences. To achieve these targets in deconstruction projects, there is an impending need to develop a formal procedure for contractors to select a most appropriate deconstruction plan. Because numbers of factors influence the selection of deconstruction techniques, engineers definitely need effective tools to conduct the selection process. In this regard, multi-criteria decision-making methods such as AHP have been adopted to effectively support deconstruction technique selection in previous researches. in which it has been proved that AHP method can help decision-makers to make informed decisions on deconstruction technique selection based on a sound technical framework. In this paper, the authors present the application and comparison of two decision-making models including the AHP model and the ANP model for deconstruction plan assessment. The paper concludes that both AHP and ANP are viable and capable tools for deconstruction plan assessment under the same set of evaluation criteria. However, although the ANP can measure relationship among selection criteria and their sub-criteria, which is normally ignored in the AHP, the authors also indicate that whether the ANP model can provide a more accurate result should be examined in further research.

Saccadic eye movements as an index of perceptual decision-making

One of the most common decisions we make is the one about where to move our eyes next. Here we examine the impact that processing the evidence supporting competing options has on saccade programming. Participants were asked to saccade to one of two possible visual targets indicated by a cloud of moving dots. We varied the evidence which supported saccade target choice by manipulating the proportion of dots moving towards one target or the other. The task was found to become easier as the evidence supporting target choice increased. This was reflected in an increase in percent correct and a decrease in saccade latency. The trajectory and landing position of saccades were found to deviate away from the non-selected target reflecting the choice of the target and the inhibition of the non-target. The extent of the deviation was found to increase with amount of sensory evidence supporting target choice. This shows that decision-making processes involved in saccade target choice have an impact on the spatial control of a saccade. This would seem to extend the notion of the processes involved in the control of saccade metrics beyond a competition between visual stimuli to one also reflecting a competition between options.

The temporal impulse response underlying saccadic decisions

Models of perceptual decision making often assume that sensory evidence is accumulated over time in favor of the various possible decisions, until the evidence in favor of one of them outweighs the evidence for the others. Saccadic eye movements are among the most frequent perceptual decisions that the human brain performs. We used stochastic visual stimuli to identify the temporal impulse response underlying saccadic eye movement decisions. Observers performed a contrast search task, with temporal variability in the visual signals. In experiment 1, we derived the temporal filter observers used to integrate the visual information. The integration window was restricted to the first similar to 100 ms after display onset. In experiment 2, we showed that observers cannot perform the task if there is no useful information to distinguish the target from the distractor within this time epoch. We conclude that (1) observers did not integrate sensory evidence up to a criterion level, (2) observers did not integrate visual information up to the start of the saccadic dead time, and (3) variability in saccade latency does not correspond to variability in the visual integration period. Instead, our results support a temporal filter model of saccadic decision making. The temporal impulse response identified by our methods corresponds well with estimates of integration times of V1 output neurons.

Entropy application to improve construction finance decisions

In financial decision-making processes, the adopted weights of the objective functions have significant impacts on the final decision outcome. However, conventional rating and weighting methods exhibit difficulty in deriving appropriate weights for complex decision-making problems with imprecise information. Entropy is a quantitative measure of uncertainty and has been useful in exploring weights of attributes in decision making. A fuzzy and entropy-based mathematical approach is employed to solve the weighting problem of the objective functions in an overall cash-flow model. The multiproject being undertaken by a medium-size construction firm in Hong Kong was used as a real case study to demonstrate the application of entropy. Its application in multiproject cash flow situations is demonstrated. The results indicate that the overall before-tax profit was HK$ 0.11 millions lower after the introduction of appropriate weights. In addition, the best time to invest in new projects arising from positive cash flow was identified to be two working months earlier than the nonweight system.

Judgments, forecasts and decisions: an analysis of fund managers over time

Decision theory is the study of models of judgement involved in, and leading to, deliberate and (usually) rational choice. In real estate investment there are normative models for the allocation of assets. These asset allocation models suggest an optimum allocation between the respective asset classes based on the investors’ judgements of performance and risk. Real estate is selected, as other assets, on the basis of some criteria, e.g. commonly its marginal contribution to the production of a mean variance efficient multi asset portfolio, subject to the investor’s objectives and capital rationing constraints. However, decisions are made relative to current expectations and current business constraints. Whilst a decision maker may believe in the required optimum exposure levels as dictated by an asset allocation model, the final decision may/will be influenced by factors outside the parameters of the mathematical model. This paper discusses investors' perceptions and attitudes toward real estate and highlights the important difference between theoretical exposure levels and pragmatic business considerations. It develops a model to identify “soft” parameters in decision making which will influence the optimal allocation for that asset class. This “soft” information may relate to behavioural issues such as the tendency to mirror competitors; a desire to meet weight of money objectives; a desire to retain the status quo and many other non-financial considerations. The paper aims to establish the place of property in multi asset portfolios in the UK and examine the asset allocation process in practice, with a view to understanding the decision making process and to look at investors’ perceptions based on an historic analysis of market expectation; a comparison with historic data and an analysis of actual performance.

The repatriation of 1973 and the re-making of modern south Asia

In the aftermath of the 1971 war, nearly 250,000 people found themselves stranded in various parts of the subcontinent. These 'trapped minorities' became hostages in a complex negotiation process that highlighted how questions of citizenship and belonging remained unresolved in post-Partition South Asia. By studying three groups - the non-Bengalis, the Bengalis and the prisoners of war in a comparative perspective, this paper re-visits the question of who was welcome within certain borders and on what terms. It argues that these decisions depended not just on the state's policies towards 'outsiders' but also upon its own relationship with its minority communities.

Successful strategy making in Bupa not-for-profit provident: a case study and interview with Mr Ray King, chief executive of Bupa

Purpose – The focus of extant strategy literature is on for-profit organisations and within these group public organisations. There are other forms of organisations and following the deep recession of 2008 there is greater interest in other forms of organisation. In this case study and interview the aim is to examine strategy, strategic decisions and strategic management of a not-for-profit provident. Design/methodology/approach – The paper draws on documentary evidence and a semi-structured interview with Ray King, chief executive of Bupa. The perspective of CEO is key in strategy and such perspectives are relatively rarer. Findings – Bupa invests its surplus to provide better healthcare. Free from the pressures of quarterly reporting and shareholders it can pursue long-term value creation for members rather than short-term surpluses. Research limitations/implications – The case study and interview offers a unique insight into strategy-making within a successful mutual provident that has grown organically and externally becoming an international leader in health insurance. Originality/value – This case study sheds light on strategy-making within a not-for-profit provident that has diversified and grown significantly over the past six decades. Furthermore, very few case studies offer insight into the thinking of a chief executive who has successfully managed a business in a turbulent environment.

Financial viability appraisals for site-specific planning decisions in England

In England, appraisals of the financial viability of development schemes have become an integral part of planning policy-making, initially in determining the amount of planning obligations that might be obtained via legal agreements (known as Section 106 agreements) and latterly as a basis for establishing charging schedules for the Community Infrastructure Levy (CIL). Local planning authorities set these policies on an area-wide basis but ultimately development proposals require consent on a site-by-site basis. It is at this site-specific level that issues of viability are hotly contested. This paper examines case documents, proofs of evidence and decisions from a sample of planning disputes in order to address major issues within development viability, the application of the models and the distribution of the development gain between the developer, landowner and community. The results have specific application to viability assessment in England and should impact on future policy and practice guidance in this field. They also have relevance to other countries that incorporate assessments of economic viability in their planning systems.