Monkeys choose as if maximizing utility compatible with basic principles of revealed preference theory

Abstract

Revealed preference theory provides axiomatic tools for assessing whether individuals make observable choices "as if" they are maximizing an underlying utility function. The theory evokes a tradeoff between goods whereby individuals improve themselves by trading one good for another good to obtain the best combination. Preferences revealed in these choices are modeled as curves of equal choice (indifference curves) and reflect an underlying process of optimization. These notions have far-reaching applications in consumer choice theory and impact the welfare of human and animal populations. However, they lack the empirical implementation in animals that would be required to establish a common biological basis. In a design using basic features of revealed preference theory, we measured in rhesus monkeys the frequency of repeated choices between bundles of two liquids. For various liquids, the animals' choices were compatible with the notion of giving up a quantity of one good to gain one unit of another good while maintaining choice indifference, thereby implementing the concept of marginal rate of substitution. The indifference maps consisted of nonoverlapping, linear, convex, and occasionally concave curves with typically negative, but also sometimes positive, slopes depending on bundle composition. Out-of-sample predictions using homothetic polynomials validated the indifference curves. The animals' preferences were internally consistent in satisfying transitivity. Change of option set size demonstrated choice optimality and satisfied the Weak Axiom of Revealed Preference (WARP). These data are consistent with a version of revealed preference theory in which preferences are stochastic; the monkeys behaved "as if" they had well-structured preferences and maximized utility.marginal rate of substitution | optimal choice | reward | transitivity | axiom T o function properly, the body acquires particular substances contained in objects that are conceptualized as rewards in biology and goods in economics. Even the simplest drinks and foods contain multiple constituents such as amino acids, fats, and carbohydrates and attributes such as taste, color, and temperature. Water has taste and temperature. Beer has famously hundreds of components produced by fermentation. Sandwiches are composed of such constituents as bread, meat, and cheese. Components that can be varied individually may become tradable goods. For a balanced diet, the ancient farmer goes to the market and trades 5 lb of potatoes, of which he has plenty, against 1 lb of meat, of which he has little. Thus, considering biological rewards as multicomponent objects marks the transition to tradable economic goods. Revealed preference theory achieves exactly that: Each reward constitutes a bundle of tradable goods and is formally a vector.In trading, one gives up some quantity of one good to obtain one unit of the other good. As the farmer gives up the minimal amount of potatoes for that 1 lb of meat, he expresses his preference for the two goods. In trying to ob...

Experimentally revealed stochastic preferences for multi-component choice options

“…The higher the error around an IP the less weight was given to this point when the IC was calculated. This model resulted in good fits in earlier work (Pastor-Bernier, Plott, & Schultz, 2017). In this way, the IPs of 5 equally revealed preferred but differently composed bundles aligned as a single fitted IC.…”

“…All participants had a known appetite for milkshakes and provided written informed consent based on a detailed information sheet. We used similar design, data analysis and validation procedures as in our parallel study on rhesus monkeys, where they are described and discussed in more detail (Pastor-Bernier, Plott, & Schultz, 2017). The Local Research Ethics Committee of the Cambridgeshire Health Authority approved the study.…”

“…Psychophysical assessment. We used the same standard psychophysical staircase procedure (Green & Swets, 1966) as in our parallel study on rhesus monkeys (Pastor-Bernier, Plott, & Schultz, 2017) to estimate IPs at which each of two bundles were chosen with equal probability (P = 0.5 each option), revealing equal preference for each option. We tested seven bundles for obtaining each IP and, to avoid hysteresis, alternated their sequence randomly.…”

“…We used the following notions of Revealed Preference Theory and stochastic choice theories (Luce 1959;McFadden & Richter, 1990;McFadden, 2004;Stott, 2006) for humans (for the design of our parallel study on monkeys, see Method; Pastor-Bernier, Plott, & Schultz, 2017):…”

“…The perspective of serving as template for future human and animal studies determined the experimental design and imposed constraints concerning event timing, trial repetition and immediately consumable payouts comparable to tangible liquid and food rewards for animals (Kagel et al, 1975). We followed the notions above and used the same design and data analysis as in rhesus monkeys (Pastor-Bernier, Plott, & Schultz, 2017). Participants repeatedly chose between two composite visual stimuli presented on a computer monitor.…”