After Herbert Simon, Reinhard Selten, and Daniel Kahneman, Richard Thaler became the fourth scholar winning the Nobel Memorial Prize in Economic Sciences whose research is concerned with bounded rationality. Theoretically, Thaler not only accepted and developed the framework of bounded rationality, but also contributed to the conception and development of the theory of mental accounting. In basic research, he discovered and showed the unique attributes of mental accounting, such as the endowment effect, lack of self-control and preference for fairness. In practice, he successfully explained some puzzling phenomena in the stock and fund markets, using relevant theories in human psychology; many results from his empirical studies are widely used in business management and public administration. Furthermore, Thaler advocates the “nudge” approach to policy making, trying to improve people’s well being through subtle but effective manipulations. Thaler's research has the rare and highly desirable “theory-research-application” triadic quality, and the Nobel prize rightfully reflects his contributions to the understanding of economics and human behaviors.
If the influence of income and trade cost were neglected, it is natural that people are willing to pay the same for something as they would require when sell it. However, Prof. Thaler discovered that it is not always the truth. It happens in daily life that individuals attach higher value to the things they own and thus their willingness to pay and willingness to sell for the very item may differ. Enlightened by the prospect theory, Thaler explained this anomaly by loss aversion and named it endowment effect. Following him, many researchers have made further exploration and argument from various angles. In this paper, we summarized previous work about endowment effect and list different explanations including loss aversion theory, psychological ownership theory, biased cognitive processing theory and evolution theory. This paper elaborated the interrelationship and disputes among the theories and finally gave the reason why endowment effect is not abnormal. Meanwhile, endowment effect plays an important role in guiding government work as well as business strategy making. Future research should enrich the theory framework, expand applications and strengthen the research in Chinese background.
In 2017, Richard H. Thaler was awarded the Nobel Prize in Economics. A key contribution towards this was his work on progressing his theory of mental accounting. Of late this theory has been used to explain some behavioral anomalies contrary to the “rational economic man” hypothesis in two major areas including consumer decision-making and financial and management decision-making. This article takes the applied research in the two fields as the external logic, and the three major process of mental accounting as the internal logic, mainly exploring ten behavioral phenomenon anomalous, including the “label effect”, “budget effect”, “price illusions”, “decoupling effect” and “utility bias” in consumer decision-making; “fly-paper effect”, the “puzzle of remuneration perception”, “puzzle of taxes and investments”, the “puzzle of accounting information disclosure” and “disposition effect” in financial and management decision making. We hope to demonstrate the latest developments in mental accounting theory. Additionally, we also discuss two possible applications for the future. Firstly, further research might also be interested in the possible internal processes and mechanisms of mental accounting and its impact on human decision-making through eye-motion tracking technology and the technology of cognitive neuroscience. Secondly, future research may be concerned with the applications of mental accounting towards nudge theory; particularly in the context of government and organizational management.
Richard Thaler was awarded the 2017 Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel for his contributions to behavioral economics. Based on bounded rationality, procrastination, loss aversion, and self-control, Thaler proposed the “Save More Tomorrow” plan that nudge employees to save more for their retirement by increasing the amount saved with every salary raised. Starting at the beginning, Thaler suggested that automatic enrollment can be used as the default option for employees to increase 401(k) participation. At the later stage, automatic escalation, which automatically allocates a fraction of the employees’ future pay increase to 401(k) contribution, is proposed to nudge the increase of contribution rates. The SMarT program, which was labeled as libertarian paternalism, can result in not only increased participation and contribution rates, but also the broad diversification of portfolios. The SMarT program profoundly affected policy in England, New Zealand, and other countries in which governments have established policies to make automatic enrollment the default option for employees to participate in retirement savings plan. Researchers have also been inspired to investigate the mechanism of retirement savings behavior. We first analyze the present status given that the three primary sources of retirement income are disproportionate in China. Then, we discuss and suggest nudge methods to incorporate behavioral economic insights, such as default option, framing effect, mental account and manipulating the “two-route loss” to “one-route loss” to promote retirement savings. Improvements to the participation and contribution rates can also be nudged by designing a plan and formulating a policy on retirement savings in China.
Behavioral social policy (BSP) is a kind of social policy that uses "nudge" as a tool, based on the characteristics of human behavior. It is the application of behavioral science in the field of social policy. According to people’s behavioral preferences, BSP pursues public welfare in a covert way without significantly changing their economic incentives. From the perspective of policy makers, the method of the voluntary and/or informational nudge can be divided into increase strategy, decrease strategy and adjustment strategy. These three strategies are used in areas such as re-hospitalization rate, children's health, community-based senior care, admission funding, employment, organ transplantation, and precision poverty alleviation to help people make better choices and improve public welfare. As an emerging method and technology, nudge is not always useful. Policy makers need to suit the remedy to the case, accurately identify, trade-off, and avoid “behavior bureaucrats”, in order to realize the modernization of national governance and maximization of social benefits.
Richard H. Thaler is a renowned behavioral finance researcher whose empirical findings and theoretical insights have linked economic and psychological analyses with individual decision-making. This article summarizes Thaler’s findings and introduces them to a larger audience. Thaler and colleagues found systematic price reversals for stocks that underwent extreme long-term gains or losses, wherein past losers went on to far outperform past winners, consistent with the behavioral hypothesis of investor overreaction. Additionally, Thaler and colleagues presented findings suggesting that discount fluctuations in closed-end funds were driven by changes in individual investor sentiment. Finally, Thaler and colleagues explained the equity premium puzzle in terms of so-called myopic loss aversion, wherein investors are assumed to be loss-averse and even long-term investors are assumed to evaluate their portfolios frequently. In conclusion, Thaler played a crucial role in the development of the behavioral finance field by incorporating new human psychology insights into economic analyses.
The present study aimed at exploring the role of power in choice deferral (a subcategory of decision avoidance) by studying the moderating role of choice difficulty (Experiment 1) and the mediating role of decision process (Experiment 2). The results showed that choice difficulty can moderate the effect of power on choice deferral, when there is not a dominating option in the choice options, preference for deferral is more pronounced for powerless individuals than for powerful individuals. Additionally, the variance in the proportion of time spent on each attribute mediated the effect of power on choice deferral. The results indicated that lower power can lead to more choice of deferral options (especially in difficult decisions), and decision processing may play an important role in the effect of power on choice deferral.
Violent video game is a new kind of medium which depicts intentional attempts by individuals to inflict harm on others. Prosociality is an important characteristic that distinguishes human beings from animals, which includes prosocial cognition, emotion and behavior that show in interpersonal communication, such as altruism, helping behavior and so on. The current research conducted a meta-analytic review of studies that examined the impact of violent video games on prosocial outcomes, and focused on the role of moderating variables in the relationship between violent video games and prosocial outcomes. Data from 24 journal articles and 63 effect sizes with 18554 participants revealed that violent video games had negative main effects on prosocial outcomes, but the effect size was small (r = -0.10); moderation analysis showed that the effects between violent video games and prosocial outcomes were moderated by gender, age of participants, measurement and types of prosocial outcomes. Future research should consider using new models such as take together for GAM and GLM model to guide the research which explore the relationship between violent video games and prosocial outcomes, optimizing the experimental paradigm which measures prosocial outcomes. What’s more, it is necessary to pay attention to the effects of individual differences and features of video games.
Studies of the mental representation of images in social psychology have encountered difficulty in accurately portraying psychological activity. Over the past decade, reverse correlation image classification has emerged as a new psychophysical method that assumes there is a relationship between an observer’s response and visual noise, and that the response is based on the observer’s social judgment criteria, and are not random. Performing a sufficient number of weight calculations on the corresponding noise patterns of the observer’s reaction allows us to visualize the intrinsic evaluation characteristics of the observer. The use of reverse correlation image classification technology has achieved some results in the areas of trait research, ethnicity, and intergroup bias. In the future, however, it is necessary to solve the problems of excessive experimental trials, separation of mixed noise, and subjects’ performance, in order to achieve more realistic mental representations.
In daily life, the use of language often occurs in a visual context. A large number of cognitive science studies have shown that visual and linguistic information processing modules do not work independently, but have complex interactions. The present paper centers on the impact of visual information on language processing, and first reviews research progress on the impact of visual information on speech comprehension, speech production and verbal communication. Secondly, the mechanism of visual information affecting language processing is discussed. Finally, computational models of visually situated language processing are reviewed, and the future research directions are prospected.
Associative memory (item 1 - item 2) has three discrete components: item 1, item 2, and the association between item 1 and item 2. The recognition of item 1 and item 2 is referred to as item recognition, whereas the recognition of the pairing relationship between item1 and item2 is called associative recognition. The dual-process theory posits that both familiarity and recollection can contribute to item recognition, though associative recognition can only be supported by recollection. Nonetheless, many recent studies found otherwise, particularly when the to-be-learned items are perceived as a single unitized representation during the study, familiarity can also contribute to associative recognition. However, very few studies have yet to examine the role of unitization on item recognition in associative memory. Currently, there are two opposing point of views. One is the ‘benefits only’ account, which claims that unitization can increase the associative recognition without affecting the item recognition; the other is the ‘costs and benefits’ account, which claims that the unitization increases the associative recognition at the cost of item recognition. Future studies are needed to investigate the impact of unitization on item recognition in associative memory and its neural mechanisms. Understanding the specific role of unitization in item and associative recognition will help to select appropriate encoding methods for specific memory tasks to improve memory performance.
Gesture is an important nonverbal medium of communication. Gesture can not only assist language communication but also has independent communication attribute. As a nonverbal medium co occurring with language media, gesture communication can help to reduce communication cognitive load. This paper mainly summarizes and reviews the theory of communicative gesture based on the expression relationship between gesture and language, the theory of communicative gesture activation, and the cognitive saving theory of communicative gesture. The future research should explore the balance between naturalness and control rigor of the experimental situation, the relationship between gesture and other nonverbal factors, and the practical significance of gesture cognition research.
Eye gaze is important social information in social interaction. However, clinical naturalistic observation found that autism spectrum disorder (ASD) individuals are impaired in gaze processing in the first year of life. In particular, individuals with ASD are unable to make eye contact with others and follow others' gaze to look at the target object. Furthermore, experimental studies found that while individuals with ASD presented impaired eye contact, there was contradictory phenomenon of a normal and abnormal coexistence in experimental contexts in gaze following of individuals with ASD. Based on the two- process theory of gaze processing, the group's subcortical pathway is born with functional abnormality, while the cortical pathway develops atypically, which is assumed as the neural mechanism of gaze processing impairment in individuals with ASD. However, the theoretical hypothesis still lacks the direct evidence supporting that the congenital functional abnormality of the subcortical pathway is the neural mechanism of eye contact impairment. Further studies are needed to investigate the effect of the congenital functional abnormality of the subcortical pathway on gaze following impairment and the neural circuit and early formation process of the compensation mechanism of the cortical pathway.
At present the biological mechanisms of cognitive behavioral therapy are not clear and need to explore. This paper will discuss the biological mechanisms of cognitive behavioral therapy from four aspects of brain function, neuroelectrophysiology, neuroendocrine system and immunity, heredity and epigenetics, involving multiple mechanisms. Combining the results of psychology, physiology and heredity, this paper proposes that the biological integration mechanism of cognitive behavioral therapy is a multi-disciplinary integration model which develops from micro, middle and macro levels. Moreover, the limitations of the present results of previous studies are also discussed and a new direction for exploring the biological mechanism of cognitive behavioral therapy are provided. We intend to establish a foundation for promoting the development of cognitive behavioral therapy.
The lens model emphasizes that the validity of cues is important in accurate personality judgment. Existing research indicates that text messages, voice communication, face images, video clips reflecting different situations, and face-to-face communication involving many kinds of verbal and nonverbal information play an important role in the process of personality judgment. On the other hand, conventional text and video information against the background of the network can also effectively reflect an individual's personality traits. Besides, the validity of some network languages—the use of facial expressions and status updates and clicking “like,” which are closely related to personality traits—is worth further exploration. Future research should consider the cues into the real-life situation and improve the ecological validity. It is also important to consider comparison between different cues to see which kind of lead is more effective. Finally, future research should be conducted from the perspective of the validity of the individual behaviors in the network situation to try to understand the cues of personality judgment more deeply.
Wisdom and well-being are universal human pursuits. The positive correlation between wisdom and eudaimonic well-being is generally recognized by researchers. However, the relationship between wisdom and hedonic well-being is still debated. Researchers have proposed the model of positive personality development and the developmental process model from the perspective of wisdom development to further explore the relationship between wisdom and well-being. Based on Chinese culture and research on wisdom and well-being, the present article proposes the developmental level model: With the growth of wisdom, the well-being of individuals varies in terms of sources, durations, and influences on physical and mental health. In the future, we should focus on solving two problems: 1) choosing and developing an appropriate tool for measuring wisdom and well-being, and 2) clarifying the causal relationship between wisdom and well-being.
It causes a significant hazard to traffic safety the car drivers have been looking in the direction where the other road users were but have not perceived the presence of the other parties, which is called ‘looked-but-failed-to-see’ (LBFTS) error. This paper first analyzes the main factors which contribute to LBFTS from the perspective of both bottom-up and top-down mechanisms. That Computational Framework is not able to fully explained circumstances because of its insufficient consideration of driver’s practical experience, expectancy and attentional set. Therefore, the extended model of Computational Framework is proposed to offer comprehensive explanations to the LBFTS using bottom-up and top-down mechanisms.