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Paper: PS-2B.14
Session: Poster Session 2B
Location: H Fl├Ąche 1.OG
Session Time: Sunday, September 15, 17:15 - 20:15
Presentation Time:Sunday, September 15, 17:15 - 20:15
Presentation: Poster
Publication: 2019 Conference on Cognitive Computational Neuroscience, 13-16 September 2019, Berlin, Germany
Paper Title: Ergodicity-Breaking Reveals Time Optimal Economic Behavior in Humans
Manuscript:  Click here to view manuscript
License: Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 Unported License.
DOI: https://doi.org/10.32470/CCN.2019.1089-0
Authors: David Meder, Copenhagen University Hospital Hvidovre, Denmark; Finn-Lennart Rabe, ETH Zurich, Switzerland; Tobias Morville, Kristoffer H. Madsen, Copenhagen University Hospital Hvidovre, Denmark; Magnus T. Koudahl, Eindhoven University of Technology, Netherlands; Ray J. Dolan, University College London, United Kingdom; Hartwig R. Siebner, Oliver J. Hulme, Copenhagen University Hospital Hvidovre, Denmark
Abstract: Ergodicity describes an equivalence between the expectation value and the time average of observables. Applied to human behaviour, ergodic theory reveals how individuals should tolerate risk in different environments. To optimise wealth over time, agents should adapt their utility function according to the dynamical setting they face. Linear utility is optimal for additive dynamics, whereas logarithmic utility is optimal for multiplicative dynamics. Whether humans approximate time optimal behavior across different dynamics is unknown. Here we compare the effects of additive versus multiplicative gamble dynamics on risky choice. We show that utility functions are modulated by gamble dynamics in ways not explained by prevailing economic theory. Instead, as predicted by time optimality, risk aversion increases under multiplicative dynamics, distributing close to the values that maximise the time average growth of wealth. We suggest that our findings motivate a need for explicitly grounding theories of decision-making on ergodic considerations.