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CCN Modeling Meeting

Friday, February 16, 2018,
  • Location: Wilson Hall • 111 21St Ave S • Nashville, TN 37240
  • Room: 519

Mel Win Khaw, PhD

Department of Economics

Columbia University

 

Sensory Encoding Implications for Economic Valuation The presentation covers two computational links between sensory encoding mechanisms and economic behavior. The first part of the presentation will discuss a model of payoff estimation when individuals are offered uncertain payoffs. The proposed cognitive process is analogous to numerosity estimation guided by number-sensitive neurons. Under this view, individuals choose optimally based on imprecise mental representations of payoff magnitudes. This framework predicts an aversion toward risky offers, as well as a critical sensitivity toward payoff ratios when offers are compared. The model is shown to account for observed preferences and choice stochasticity without invoking further assumptions about utility and choice functions. Second, a neural computation known as divisive normalization is proposed to explain shifts in consumer valuation. Observed in a variety of sensory and decision circuits, divisive normalization is suggested to be a canonical neural computation. Consistent with normalization, auction bids on consumer products are shown to deviate systematically depending on recent valuation history. Taken together, these studies highlight how judgments across domains may be driven by common principles of neural encoding.