R. J. Herrnstein is Professor of Psychology at Harvard University. He has been studying choice within the framework of reinforcement theory for over three decades.
Utility maximization and melioration: Internalities in individual choice
Article first published online: 24 AUG 2006
Copyright © 1993 John Wiley & Sons, Ltd.
Journal of Behavioral Decision Making
Volume 6, Issue 3, pages 149–185, September 1993
How to Cite
Herrnstein, R. J., Loewenstein, G. F., Prelec, D. and Vaughan, W. (1993), Utility maximization and melioration: Internalities in individual choice. J. Behav. Decis. Making, 6: 149–185. doi: 10.1002/bdm.3960060302
- Issue published online: 24 AUG 2006
- Article first published online: 24 AUG 2006
- Manuscript Revised: 14 MAR 1993
- Manuscript Received: 19 JUN 1991
- Utility maximization;
- Individual behavior;
- Rational choice theory
How do people go about choosing between alternatives in relatively simple settings? This study explores some of the variables that past work suggests may be relevant. Volunteer subjects worked for money in six procedures in which the probability of a payment from either of two alternatives was 1.0, but the rate of pay (i.e. the speed with which a payment was delivered or the size of the payment) interacted with the subjects recent allocation of choices, which we define as the ‘internalities’. Because of the internalities, choosing the currently more profitable alternative did not maximize total earnings. Subjects were more likely to fail to maximize when the interaction between present pay and past choices was spread over longer sequences of choices, or when the reward variable was the speed, rather than the value, of each payment. Subjects often disregarded the internalities and were instead guided by the current yields of the two alternatives, which is a frequently observed tendency, called ‘melioration’, in experiments on choices by animals. The tendency toward melioration was only partially counteracted by explicit instructions on how to maximize earnings. We discuss a theoretical framework for melioration that postulates both motivational and cognitive sources.