Speaker: Prof. CHEW Soo Hong 

Time: 15:00 - 17:00 , May 9, 2023

Venue: Room 1113, Wangkezhen Building


The human brain is by nature miserly – consuming a mere 10 watts – in constantly seeking to minimize energy expenditure unconsciously. This yields a highly volatile and context-sensitive attentional process. This talk on the role of attention in decision making builds on both “soft” modeling based on revealed choice (first abstract) and “hard” modeling which seeks additionally biological accuracy (second abstract).

1. Attention Theory

Chew Soo Hong, Wang Wenqian, and Zhong Songfa

We model the role of attention in decision making under risk and uncertainty from the perspective of the decision maker as a cognitive miser, and arrive at the utility of a lottery through potentially volatile attention-dependent decision weights. The resulting Attention Theory (AT) exhibits continuity in probability weighting and heterogeneity in gain-loss attitude between loss aversion and gain seeking. When top-down attention is stable and consequentialist, AT can account for Allais behavior, fourfold pattern of risk attitude, and disjunction effect. Under volatile consequentialist attention, AT encompasses multiple attention functions and can exhibit ambiguity aversion, discontinuity in valuation from event splitting, and uncertainty effects. In binary choice, as with Salience Theory and generalized Regret Theory, AT exhibits EU-conforming behavior in the correlated Allais common-consequence problem when attention is symmetric. When stimuli through bottom-up salience is substantial, AT delivers context dependent choice, including source preference, status quo/default bias, and compromise effects, besides volatility in loss-gain attitude. Moreover, choice behavior may appear random as the attention function varies with specific stimuli or when the stimuli are themselves stochastic.

2. “Hard” Attention Theory: A Neurochemical Approach to Modelling the Role of Attention and Salience in Decision Making under Risk and Uncertainty

Chew Soo Hong and Richard Ebstein

Building on the Attention Theory (AT) model (Chew, Wang, and Zhong, 2023) for decision making under risk and uncertainty, we offer a neurochemical model of the role of attention and salience in decision making through a quartet of neurotransmitters – dopamine (DA), serotonin (5HT), acetylcholine (ACh), and norepinephrine (NE). Following Zhong et al.’s (2009) application of DA and 5HT tones to model the loss-gain differentiation in risk attitude, we propose that ACh and NE tones modulate respectively the top-down and bottom-up components of AT’s attention function. We discuss implications linking the decision maker’s eye movement, brain activation, physiological response, and genetic makeup to observable choice behavior, including variable loss aversion, fourfold pattern of risk attitude, ambiguity aversion, and source preference. Going beyond revealed choice, this extended hypothesis yields predictions which can be tested in a placebo-controlled RCT using nicotine patches (stimulate nACh receptors) and Ventolin (salbutamol, a specific β-2 adrenergic agonist administered by an inhaler) to manipulate TD attention and BU salience. Preliminary findings from two pilot studies will be discussed.

Bio: Chew Soo Hong, chair of the China Center for Behavioral Economics and Finance at Southwest University of Finance and Economics, emeritus professor at the National University of Singapore and adjunct professor at the Hong Kong University of Science and Technology. His research interests cover the fields of decision theory, biological economics and experimental economics. Chew was awarded the Leonard J. Savage Award by the International Society for Bayesian Analysis and the Best Theoretical Research Paper Award by the Decision Sciences Institute. He is member of the American Economic Association and has been fellow of the Econometric Society since 2012. He is considered one of the pioneers in axiomatic non-expected utility models. 

Host: Lusha Zhu