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Daniel A Braun - One of the best experts on this subject based on the ideXlab platform.
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Risk-Sensitivity in Bayesian Sensorimotor Integration
PLOS Computational Biology, 2012Co-Authors: Jordi Grau-moya, Pedro A. Ortega, Daniel A BraunAbstract:Information processing in the nervous system during sensorimotor tasks with inherent uncertainty has been shown to be consistent with Bayesian integration. Bayes optimal decision-makers are, however, Risk-neutral in the sense that they weigh all possibilities based on prior expectation and sensory evidence when they choose the action with highest expected value. In contrast, Risk-sensitive decision-makers are sensitive to model uncertainty and bias their decision-making processes when they do inference over unobserved variables. In particular, they allow deviations from their probabilistic model in cases where this model makes imprecise predictions. Here we test for Risk-Sensitivity in a sensorimotor integration task where subjects exhibit Bayesian information integration when they infer the position of a target from noisy sensory feedback. When introducing a cost associated with subjects' response, we found that subjects exhibited a characteristic bias towards low cost responses when their uncertainty was high. This result is in accordance with Risk-sensitive decision-making processes that allow for deviations from Bayes optimal decision-making in the face of uncertainty. Our results suggest that both Bayesian integration and Risk-Sensitivity are important factors to understand sensorimotor integration in a quantitative fashion.
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Risk Sensitivity in a motor task with speed-accuracy trade-off
Journal of Neurophysiology, 2011Co-Authors: Arne J Nagengast, Daniel A Braun, Daniel M WolpertAbstract:When a racing driver steers a car around a sharp bend, there is a trade-off between speed and accuracy, in that high speed can lead to a skid whereas a low speed increases lap time, both of which can adversely affect the driver's payoff function. While speed-accuracy trade-offs have been studied extensively, their susceptibility to Risk Sensitivity is much less understood, since most theories of motor control are Risk neutral with respect to payoff, i.e., they only consider mean payoffs and ignore payoff variability. Here we investigate how individual Risk attitudes impact a motor task that involves such a speed-accuracy trade-off. We designed an experiment where a target had to be hit and the reward (given in points) increased as a function of both subjects' endpoint accuracy and endpoint velocity. As faster movements lead to poorer endpoint accuracy, the variance of the reward increased for higher velocities. We tested subjects on two reward conditions that had the same mean reward but differed in the variance of the reward. A Risk-neutral account predicts that subjects should only maximize the mean reward and hence perform identically in the two conditions. In contrast, we found that some (Risk-averse) subjects chose to move with lower velocities and other (Risk-seeking) subjects with higher velocities in the condition with higher reward variance (Risk). This behavior is suboptimal with regard to maximizing the mean number of points but is in accordance with a Risk-sensitive account of movement selection. Our study suggests that individual Risk Sensitivity is an important factor in motor tasks with speed-accuracy trade-offs.
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Risk Sensitivity in sensorimotor control
Frontiers in Human Neuroscience, 2011Co-Authors: Daniel A Braun, Arne J Nagengast, Daniel M WolpertAbstract:Recent advances in theoretical neuroscience suggest that motor control can be considered as a continuous decision-making process in which uncertainty plays a key role. Decision-makers can be Risk-sensitive with respect to this uncertainty in that they may not only consider the average payoff of an outcome, but also consider the variability of the payoffs. Although such Risk-Sensitivity is a well-established phenomenon in psychology and economics, it has been much less studied in motor control. In fact, leading theories of motor control, such as optimal feedback control, assume that motor behaviors can be explained as the optimization of a given expected payoff or cost. Here we review evidence that humans exhibit Risk-Sensitivity in their motor behaviors, thereby demonstrating Sensitivity to the variability of ‘motor costs’. Furthermore, we discuss how Risk-Sensitivity can be incorporated into optimal feedback control models of motor control. We conclude that Risk-Sensitivity is an important concept in understanding individual motor behavior under uncertainty.
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Risk-Sensitivity and the mean-variance trade-off: decision making in sensorimotor control
Proceedings of The Royal Society B: Biological Sciences, 2011Co-Authors: Arne J Nagengast, Daniel A Braun, Daniel M WolpertAbstract:Numerous psychophysical studies suggest that the sensorimotor system chooses actions that optimize the average cost associated with a movement. Recently, however, violations of this hypothesis have been reported in line with economic theories of decision-making that not only consider the mean payoff, but are also sensitive to Risk, that is the variability of the payoff. Here, we examine the hypothesis that Risk-Sensitivity in sensorimotor control arises as a mean-variance trade-off in movement costs. We designed a motor task in which participants could choose between a sure motor action that resulted in a fixed amount of effort and a Risky motor action that resulted in a variable amount of effort that could be either lower or higher than the fixed effort. By changing the mean effort of the Risky action while experimentally fixing its variance, we determined indifference points at which participants chose equiprobably between the sure, fixed amount of effort option and the Risky, variable effort option. Depending on whether participants accepted a variable effort with a mean that was higher, lower or equal to the fixed effort, they could be classified as Risk-seeking, Risk-averse or Risk-neutral. Most subjects were Risk-sensitive in our task consistent with a mean-variance trade-off in effort, thereby, underlining the importance of Risk-Sensitivity in computational models of sensorimotor control.
Daniel M Wolpert - One of the best experts on this subject based on the ideXlab platform.
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Risk Sensitivity in a motor task with speed-accuracy trade-off
Journal of Neurophysiology, 2011Co-Authors: Arne J Nagengast, Daniel A Braun, Daniel M WolpertAbstract:When a racing driver steers a car around a sharp bend, there is a trade-off between speed and accuracy, in that high speed can lead to a skid whereas a low speed increases lap time, both of which can adversely affect the driver's payoff function. While speed-accuracy trade-offs have been studied extensively, their susceptibility to Risk Sensitivity is much less understood, since most theories of motor control are Risk neutral with respect to payoff, i.e., they only consider mean payoffs and ignore payoff variability. Here we investigate how individual Risk attitudes impact a motor task that involves such a speed-accuracy trade-off. We designed an experiment where a target had to be hit and the reward (given in points) increased as a function of both subjects' endpoint accuracy and endpoint velocity. As faster movements lead to poorer endpoint accuracy, the variance of the reward increased for higher velocities. We tested subjects on two reward conditions that had the same mean reward but differed in the variance of the reward. A Risk-neutral account predicts that subjects should only maximize the mean reward and hence perform identically in the two conditions. In contrast, we found that some (Risk-averse) subjects chose to move with lower velocities and other (Risk-seeking) subjects with higher velocities in the condition with higher reward variance (Risk). This behavior is suboptimal with regard to maximizing the mean number of points but is in accordance with a Risk-sensitive account of movement selection. Our study suggests that individual Risk Sensitivity is an important factor in motor tasks with speed-accuracy trade-offs.
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Risk Sensitivity in sensorimotor control
Frontiers in Human Neuroscience, 2011Co-Authors: Daniel A Braun, Arne J Nagengast, Daniel M WolpertAbstract:Recent advances in theoretical neuroscience suggest that motor control can be considered as a continuous decision-making process in which uncertainty plays a key role. Decision-makers can be Risk-sensitive with respect to this uncertainty in that they may not only consider the average payoff of an outcome, but also consider the variability of the payoffs. Although such Risk-Sensitivity is a well-established phenomenon in psychology and economics, it has been much less studied in motor control. In fact, leading theories of motor control, such as optimal feedback control, assume that motor behaviors can be explained as the optimization of a given expected payoff or cost. Here we review evidence that humans exhibit Risk-Sensitivity in their motor behaviors, thereby demonstrating Sensitivity to the variability of ‘motor costs’. Furthermore, we discuss how Risk-Sensitivity can be incorporated into optimal feedback control models of motor control. We conclude that Risk-Sensitivity is an important concept in understanding individual motor behavior under uncertainty.
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Risk-Sensitivity and the mean-variance trade-off: decision making in sensorimotor control
Proceedings of The Royal Society B: Biological Sciences, 2011Co-Authors: Arne J Nagengast, Daniel A Braun, Daniel M WolpertAbstract:Numerous psychophysical studies suggest that the sensorimotor system chooses actions that optimize the average cost associated with a movement. Recently, however, violations of this hypothesis have been reported in line with economic theories of decision-making that not only consider the mean payoff, but are also sensitive to Risk, that is the variability of the payoff. Here, we examine the hypothesis that Risk-Sensitivity in sensorimotor control arises as a mean-variance trade-off in movement costs. We designed a motor task in which participants could choose between a sure motor action that resulted in a fixed amount of effort and a Risky motor action that resulted in a variable amount of effort that could be either lower or higher than the fixed effort. By changing the mean effort of the Risky action while experimentally fixing its variance, we determined indifference points at which participants chose equiprobably between the sure, fixed amount of effort option and the Risky, variable effort option. Depending on whether participants accepted a variable effort with a mean that was higher, lower or equal to the fixed effort, they could be classified as Risk-seeking, Risk-averse or Risk-neutral. Most subjects were Risk-sensitive in our task consistent with a mean-variance trade-off in effort, thereby, underlining the importance of Risk-Sensitivity in computational models of sensorimotor control.
Grzegorz Michalski - One of the best experts on this subject based on the ideXlab platform.
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Value Maximizing Corporate Current Assets and Cash Management in Relation to Risk Sensitivity: Polish Firms Case
SSRN Electronic Journal, 2014Co-Authors: Grzegorz MichalskiAbstract:The paper reports the way of working Financial Liquidity Investment Efficiency Model (FLIEM). It’s an author proposed approach to predicts the most accurate from firm maximization point of view cash management and current assets management policy. The novelty of the proposed approach is linked with including the idea of Risk Sensitivity into model. Current assets and cash in enterprise are maintained for Risk reduction purposes. The basic financial purpose of an enterprise is maximization of its value. Cash and current assets management should also contribute to realization of this fundamental aim. The enterprise value maximization strategy is executed with a focus on Risk and uncertainty. This paper discuss the consequences that can result from operating Risk that is related to cash and current assets management policy. An increase in the level of current assets in a firm increases both net working capital requirements and the costs of holding and managing working capital. Both of these decrease the value of the firm. But not always it works in the same way, it depends on Risk Sensitivity. Collected data shows how the Polish firms liquidity management model works in emerging markets reality. In the paper the relation between liquid levels and Risk Sensitivity is illustrated by empirical data from Polish firms.
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Financial Crisis Influence on Risk Sensitivity and Answer of Businesses by Increasing Cash Levels: Slovak and Polish Manufacturing Firms Data
SSRN Electronic Journal, 2013Co-Authors: Grzegorz Michalski, Manuela RaisováAbstract:According to FLIEM model predictions, before the crisis, during the crisis and just after the crisis phases should be connected with higher levels of cash investments. Investments in financial liquidity of the businesses are done as hedging method against higher Risk Sensitivity. That is done by investing money in current assets. The goal of the paper is to check the statistical significance of changes in current assets levels during three crisis connected phases. We have found that FLIEM model works and that cash to total assets indicator should be treated as forecasting indicator about future Risk Sensitivity of the firms. That could be used also as warning signal about future standing of whole economy as well.
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Accounts Receivable Levels in Relation to Risk Sensitivity in Manufacturing Firms in V4 Countries: 2003-2012 Data Testimony
2013Co-Authors: Grzegorz MichalskiAbstract:Accounts receivables to total assets in manufacturing entities is relationship that could serves as forecasting bad news indicator about general economic condition of economy. Individually each entity try to suit its trade credit policy to its business environment. Individual Risk Sensitivity is an result of entity answer on changes in its internal economic health but also is response on general economic changes. Here we present accounts receivables to total assets indicator in Czech, Hungarian, Polish and Slovak manufacturing firms. That results are presented in three business environment conditions: 2003-2006 period, judged by us as "before the crisis," 2007-2009 "during the crisis," and 2010-2012 "after the crisis." Empirical data confirms our projections derived from theory based on FLIEM model.
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Risk Sensitivity Indicator as Correction Factor for Cost of Capital Rate
2012Co-Authors: Grzegorz MichalskiAbstract:Cost of capital rate is a result of Risk included in cost of debt rates and cost of equity rates. Generally to estimate cost of capital rates with use of CAPM conception, is used information about general Risk indicator, known as beta coefficient and relations between debt and equity rates. Such approach in unmodified version, falsely gives the similar results for enterprises from the same sector and with similar levels of debt to equity relations. In paper is presented Risk Sensitivity indicator conception which allows to differentiate cost of capital rate between more Risk sensitive businesses and less sensitive businesses.
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Air Transport Industry Enterprises Risk Sensitivity and Financial Liquidity Decisions: The Case of PLL Lot S.A.
2012Co-Authors: Grzegorz MichalskiAbstract:Enterprise financial liquidity management can reduce Risk influence on enterprise results. Air transport industry from one side have not a comfort of stable demand on its services and it is linked with volatility of realized incomes. Market situation influence enterprise ability to generate value for its owners depending on kind of business and individual enterprise flexibility and Risk Sensitivity. The paper presents the consequences that can result from operating Risk that is related to liquidity policy in the context of air transport industry firms. An increase in the level of liquid assets in an enterprise increases both net working capital requirements and the costs of holding and managing financial liquidity. Both of these decrease the value of the firm. But not always it works in the same way, it depends on Risk Sensitivity of the business which differ between branches and individual representatives from each branch. Case study data presents and is an material for discussion about general model presented in first part of the paper. The relation between liquid levels and Risk Sensitivity is also illustrated by empirical data from air transport industry empirical data.
Arne J Nagengast - One of the best experts on this subject based on the ideXlab platform.
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Risk Sensitivity in a motor task with speed-accuracy trade-off
Journal of Neurophysiology, 2011Co-Authors: Arne J Nagengast, Daniel A Braun, Daniel M WolpertAbstract:When a racing driver steers a car around a sharp bend, there is a trade-off between speed and accuracy, in that high speed can lead to a skid whereas a low speed increases lap time, both of which can adversely affect the driver's payoff function. While speed-accuracy trade-offs have been studied extensively, their susceptibility to Risk Sensitivity is much less understood, since most theories of motor control are Risk neutral with respect to payoff, i.e., they only consider mean payoffs and ignore payoff variability. Here we investigate how individual Risk attitudes impact a motor task that involves such a speed-accuracy trade-off. We designed an experiment where a target had to be hit and the reward (given in points) increased as a function of both subjects' endpoint accuracy and endpoint velocity. As faster movements lead to poorer endpoint accuracy, the variance of the reward increased for higher velocities. We tested subjects on two reward conditions that had the same mean reward but differed in the variance of the reward. A Risk-neutral account predicts that subjects should only maximize the mean reward and hence perform identically in the two conditions. In contrast, we found that some (Risk-averse) subjects chose to move with lower velocities and other (Risk-seeking) subjects with higher velocities in the condition with higher reward variance (Risk). This behavior is suboptimal with regard to maximizing the mean number of points but is in accordance with a Risk-sensitive account of movement selection. Our study suggests that individual Risk Sensitivity is an important factor in motor tasks with speed-accuracy trade-offs.
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Risk Sensitivity in sensorimotor control
Frontiers in Human Neuroscience, 2011Co-Authors: Daniel A Braun, Arne J Nagengast, Daniel M WolpertAbstract:Recent advances in theoretical neuroscience suggest that motor control can be considered as a continuous decision-making process in which uncertainty plays a key role. Decision-makers can be Risk-sensitive with respect to this uncertainty in that they may not only consider the average payoff of an outcome, but also consider the variability of the payoffs. Although such Risk-Sensitivity is a well-established phenomenon in psychology and economics, it has been much less studied in motor control. In fact, leading theories of motor control, such as optimal feedback control, assume that motor behaviors can be explained as the optimization of a given expected payoff or cost. Here we review evidence that humans exhibit Risk-Sensitivity in their motor behaviors, thereby demonstrating Sensitivity to the variability of ‘motor costs’. Furthermore, we discuss how Risk-Sensitivity can be incorporated into optimal feedback control models of motor control. We conclude that Risk-Sensitivity is an important concept in understanding individual motor behavior under uncertainty.
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Risk-Sensitivity and the mean-variance trade-off: decision making in sensorimotor control
Proceedings of The Royal Society B: Biological Sciences, 2011Co-Authors: Arne J Nagengast, Daniel A Braun, Daniel M WolpertAbstract:Numerous psychophysical studies suggest that the sensorimotor system chooses actions that optimize the average cost associated with a movement. Recently, however, violations of this hypothesis have been reported in line with economic theories of decision-making that not only consider the mean payoff, but are also sensitive to Risk, that is the variability of the payoff. Here, we examine the hypothesis that Risk-Sensitivity in sensorimotor control arises as a mean-variance trade-off in movement costs. We designed a motor task in which participants could choose between a sure motor action that resulted in a fixed amount of effort and a Risky motor action that resulted in a variable amount of effort that could be either lower or higher than the fixed effort. By changing the mean effort of the Risky action while experimentally fixing its variance, we determined indifference points at which participants chose equiprobably between the sure, fixed amount of effort option and the Risky, variable effort option. Depending on whether participants accepted a variable effort with a mean that was higher, lower or equal to the fixed effort, they could be classified as Risk-seeking, Risk-averse or Risk-neutral. Most subjects were Risk-sensitive in our task consistent with a mean-variance trade-off in effort, thereby, underlining the importance of Risk-Sensitivity in computational models of sensorimotor control.
Ann Renée Blais - One of the best experts on this subject based on the ideXlab platform.
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predicting Risk Sensitivity in humans and lower animals Risk as variance or coefficient of variation
Psychological Review, 2004Co-Authors: Elke U Weber, Sharoni Shafir, Ann Renée BlaisAbstract:This article examines the statistical determinants of Risk preference. In a meta-analysis of animal Risk preference (foraging birds and insects), the coefficient of variation (CV), a measure of Risk per unit of return, predicts choices far better than outcome variance, the Risk measure of normative models. In a meta-analysis of human Risk preference, the superiority of the CV over variance in predicting Risk taking is not as strong. Two experiments show that people’s Risk Sensitivity becomes strongly proportional to the CV when they learn about choice alternatives like other animals, by experiential sampling over time. Experience-based choices differ from choices when outcomes and probabilities are numerically described. Zipf’s law as an ecological regularity and Weber’s law as a psychological regularity may give rise to the CV as a measure of Risk. Decision making under Risk and uncertainty is a topic of research in disciplines as diverse as psychology, economics, zoology, and entomology. Both the animal and the human Risky choice literatures have proposed models that either predict choices in a deterministic fashion or predict Risk Sensitivity (i.e., the probability of choosing a Riskier or less Risky option) in a stochastic fashion. Theories of human Risky choice include the prescriptive expected utility model (von Neumann & Morgenstern, 1947) or the Risk– return models used to price Risky options in finance (Markowitz, 1959). A prominent descriptive model is prospect theory (Kahneman & Tversky, 1979). In the animal literature, theories about Risky foraging gave rise to the energy budget rule (Caraco, 1980; Stephens, 1981), a special case of a general class of normative models called Risk Sensitivity theories that construe Risk Sensitivity as the response of organisms whose goal is the maximization of Darwinian fitness in stochastic environments. Similar to prospect theory for human Risky choice, the energy budget rule predicts Risk aversion when animals are not in danger of starvation (domain of gains) but Risk seeking when there is such a Risk (domain of losses). Although different in many respects, these models all assume that the likelihood of choosing a Risky option is affected by the variability of the option’s possible outcomes. The measure of variability used in these models is usually the variance of outcomes around the option’s expected value. The capital-assetpricing model in finance, for example, equates Risk with variance and predicts that people’s willingness to pay for Risky options with equal expected value is a decreasing function of the options’ outcome variance (Sharpe, 1964). The energy budget rule, as another example, predicts that—among options with equal expected energy intake—animals will prefer foraging options with smaller variance when the expected energy intake exceeds the caloric needs of the animal but will prefer options with greater variance when the expected energy intake is less than that required for survival because increases in outcome variance (holding expected value constant) are associated with a greater chance of obtaining the caloric intake required for survival.
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Predicting Risk Sensitivity in Humans and Lower Animals: Risk as Variance or Coefficient of Variation
Psychological Review, 2004Co-Authors: Elke U Weber, Sharoni Shafir, Ann Renée BlaisAbstract:This article examines the statistical determinants of Risk preference. In a meta-analysis of animal Risk preference (foraging birds and insects), the coefficient of variation (CV), a measure of Risk per unit of return, predicts choices far better than outcome variance, the Risk measure of normative models. In a meta-analysis of human Risk preference, the superiority of the CV over variance in predicting Risk taking is not as strong. Two experiments show that people's Risk Sensitivity becomes strongly proportional to the CV when they learn about choice alternatives like other animals, by experiential sampling over time. Experience-based choices differ from choices when outcomes and probabilities are numerically described. Zipf's law as an ecological regularity and Weber's law as a psychological regularity may give rise to the CV as a measure of Risk.
