title: Economic irrationality is optimal during noisy decision making.
abstract: According to normative theories, reward-maximizing agents should have consistent preferences. Thus, when faced with alternatives A, B, and C, an individual preferring A to B and B to C should prefer A to C. However, it has been widely argued that humans can incur losses by violating this axiom of transitivity, despite strong evolutionary pressure for reward-maximizing choices. Here, adopting a biologically plausible computational framework, we show that intransitive (and thus economically irrational) choices paradoxically improve accuracy (and subsequent economic rewards) when decision formation is corrupted by internal neural noise. Over three experiments, we show that humans accumulate evidence over time using a "selective integration" policy that discards information about alternatives with momentarily lower value. This policy predicts violations of the axiom of transitivity when three equally valued alternatives differ circularly in their number of winning samples. We confirm this prediction in a fourth experiment reporting significant violations of weak stochastic transitivity in human observers. Crucially, we show that relying on selective integration protects choices against "late" noise that otherwise corrupts decision formation beyond the sensory stage. Indeed, we report that individuals with higher late noise relied more strongly on selective integration. These findings suggest that violations of rational choice theory reflect adaptive computations that have evolved in response to irreducible noise during neural information processing.
authors.affiliation: Department of Experimental Psychology, University of Oxford, Oxford OX1 3UD, United Kingdom; Department of Psychological Sciences, Birkbeck, University of London, London WC1E 7HX, United Kingdom; k.tsetsos62@gmail.com.
authors.forename: Konstantinos
authors.identifier: http://orcid.org/0000-0003-2709-7634
authors.initials: K
authors.lastname: Tsetsos
authors.affiliation: School of Psychology, University of Tel Aviv, Tel Aviv 69978, Israel; Sagol School of Neuroscience, University of Tel Aviv, Tel Aviv 69978, Israel;
authors.forename: Rani
authors.identifier: http://orcid.org/0000-0002-7641-2402
authors.initials: R
authors.lastname: Moran
authors.affiliation: Department of Psychology, University of Washington, Seattle, WA 98195;
authors.forename: James
authors.initials: J
authors.lastname: Moreland
authors.affiliation: Behavioural Science Group, Warwick Business School, University of Warwick, Coventry CV4 7AL, United Kingdom.
authors.forename: Nick
authors.initials: N
authors.lastname: Chater
authors.affiliation: School of Psychology, University of Tel Aviv, Tel Aviv 69978, Israel; Sagol School of Neuroscience, University of Tel Aviv, Tel Aviv 69978, Israel;
authors.forename: Marius
authors.initials: M
authors.lastname: Usher
authors.affiliation: Department of Experimental Psychology, University of Oxford, Oxford OX1 3UD, United Kingdom;
authors.forename: Christopher
authors.initials: C
authors.lastname: Summerfield
mesh_terms: D000293:Adolescent; D000328:Adult; D002755:Choice Behavior / Q000502:physiology*; D003662:Decision Theory; D030141:Feedback, Psychological; D005260:Female; D005556:Form Perception; D005717:Games, Experimental; D006801:Humans; D007600:Judgment / Q000502:physiology; D008297:Male; D008875:Middle Aged; D018803:Models, Economic; D008960:Models, Psychological; D010775:Photic Stimulation; D011601:Psychophysics; D012201:Reward; D018910:Video Games; D055815:Young Adult
keywords: choice optimality; decision making; evidence accumulation; irrationality; selective integration