IDEAS home Printed from https://ideas.repec.org/a/plo/pone00/0129581.html
   My bibliography  Save this article

Budget Constraints Affect Male Rats’ Choices between Differently Priced Commodities

Author

Listed:
  • Marijn van Wingerden
  • Christine Marx
  • Tobias Kalenscher

Abstract

Demand theory can be applied to analyse how a human or animal consumer changes her selection of commodities within a certain budget in response to changes in price of those commodities. This change in consumption assessed over a range of prices is defined as demand elasticity. Previously, income-compensated and income-uncompensated price changes have been investigated using human and animal consumers, as demand theory predicts different elasticities for both conditions. However, in these studies, demand elasticity was only evaluated over the entirety of choices made from a budget. As compensating budgets changes the number of attainable commodities relative to uncompensated conditions, and thus the number of choices, it remained unclear whether budget compensation has a trivial effect on demand elasticity by simply sampling from a different total number of choices or has a direct effect on consumers’ sequential choice structure. If the budget context independently changes choices between commodities over and above price effects, this should become apparent when demand elasticity is assessed over choice sets of any reasonable size that are matched in choice opportunities between budget conditions. To gain more detailed insight in the sequential choice dynamics underlying differences in demand elasticity between budget conditions, we trained N=8 rat consumers to spend a daily budget by making a number of nosepokes to obtain two liquid commodities under different price regimes, in sessions with and without budget compensation. We confirmed that demand elasticity for both commodities differed between compensated and uncompensated budget conditions, also when the number of choices considered was matched, and showed that these elasticity differences emerge early in the sessions. These differences in demand elasticity were driven by a higher choice rate and an increased reselection bias for the preferred commodity in compensated compared to uncompensated budget conditions, suggesting a budget context effect on relative valuation.

Suggested Citation

  • Marijn van Wingerden & Christine Marx & Tobias Kalenscher, 2015. "Budget Constraints Affect Male Rats’ Choices between Differently Priced Commodities," PLOS ONE, Public Library of Science, vol. 10(6), pages 1-20, June.
    • Handle: RePEc:plo:pone00:0129581
    DOI: 10.1371/journal.pone.0129581
    as

    Download full text from publisher

    File URL: https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0129581
    Download Restriction: no
    File URL: https://journals.plos.org/plosone/article/file?id=10.1371/journal.pone.0129581&type=printable
    Download Restriction: no
    File URL: https://libkey.io/10.1371/journal.pone.0129581?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    2. Raymond Battalio & Leonard Green & John Kagel, 1995. "Economic choice theory. an experimental analysis of animal behavior," Framed Field Experiments 00166, The Field Experiments Website.
    3. Kagel, John H, et al, 1975. "Experimental Studies of Consumer Demand Behavior Using Laboratory Animals," Economic Inquiry, Western Economic Association International, vol. 13(1), pages 22-38, March.
    4. John H. Kagel & Raymond C. Battalio & Howard Rachlin & Leonard Green, 1981. "Demand Curves for Animal Consumers," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 96(1), pages 1-15.
    5. Giovanni Hernandez & Yannick-André Breton & Kent Conover & Peter Shizgal, 2010. "At What Stage of Neural Processing Does Cocaine Act to Boost Pursuit of Rewards?," PLOS ONE, Public Library of Science, vol. 5(11), pages 1-23, November.
    6. Milton Friedman & L. J. Savage, 1952. "The Expected-Utility Hypothesis and the Measurability of Utility," Journal of Political Economy, University of Chicago Press, vol. 60, pages 463-463.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. M. Keith Chen & Venkat Lakshminarayanan & Laurie Santos, 2005. "The Evolution of Our Preferences: Evidence from Capuchin-Monkey Trading Behavior," Cowles Foundation Discussion Papers 1524, Cowles Foundation for Research in Economics, Yale University.
    2. Allen, Roy & Dziewulski, Paweł & Rehbeck, John, 2022. "Making sense of monkey business: Re-examining tests of animal rationality," Journal of Economic Behavior & Organization, Elsevier, vol. 196(C), pages 220-228.
    3. Rebecca Brana Solomon & Kent Conover & Peter Shizgal, 2017. "Valuation of opportunity costs by rats working for rewarding electrical brain stimulation," PLOS ONE, Public Library of Science, vol. 12(8), pages 1-40, August.
    4. M. Keith Chen & Venkat Lakshminarayanan & Laurie R. Santos, 2006. "How Basic Are Behavioral Biases? Evidence from Capuchin Monkey Trading Behavior," Journal of Political Economy, University of Chicago Press, vol. 114(3), pages 517-537, June.
    5. Roy Allen & Pawel Dziewulski & John Rehbeck, 2019. "Revealed statistical consumer theory," Working Paper Series 1119, Department of Economics, University of Sussex Business School.
    6. Kaushik Basu, 2009. "How Sapient is Homo Economicus? The Evolutionary Origins of Trade, Ethics and Economic Rationality," Working Papers id:2240, eSocialSciences.
    7. Ivan Moscati, 2016. "Retrospectives: How Economists Came to Accept Expected Utility Theory: The Case of Samuelson and Savage," Journal of Economic Perspectives, American Economic Association, vol. 30(2), pages 219-236, Spring.
    8. Jeffrey K. Sarbaum & Solomon W. Polachek & Norman E. Spear, 1999. "The Effects of Price Changes on Alcohol Consumption in Alcohol-Experienced Rats," NBER Chapters, in: The Economic Analysis of Substance Use and Abuse: An Integration of Econometric and Behavioral Economic Research, pages 75-102, National Bureau of Economic Research, Inc.
    9. Tarnanidis, Theodore & Owusu-Frimpong, Nana & Nwankwo, Sonny & Omar, Maktoba, 2015. "Why we buy? Modeling consumer selection of referents," Journal of Retailing and Consumer Services, Elsevier, vol. 22(C), pages 24-36.
    10. Garrett, Vicki & Koontz, Tomas M., 2008. "Breaking the cycle: Producer and consumer perspectives on the non-adoption of passive solar housing in the US," Energy Policy, Elsevier, vol. 36(4), pages 1551-1566, April.
    11. Vesna Prasnikar, 1993. "Binary Lottery Payoffs: Do They Control Risk Aversion?," Discussion Papers 1059, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    12. Stefan Borsky & Paul A. Raschky, "undated". "Estimating the Option Value of Exercising Risk-taking Behavior with the Hedonic Market Approach," Working Papers 2008-14, Faculty of Economics and Statistics, Universität Innsbruck.
    13. Kemp, Simon & Lea, Stephen E. G. & Fussell, Sharon, 1995. "Experiments on rating the utility of consumer goods: Evidence supporting microeconomic theory," Journal of Economic Psychology, Elsevier, vol. 16(4), pages 543-561, December.
    14. Yi-Fen Chen & Shi-Han Chang, 2016. "The online framing effect: the moderating role of warning, brand familiarity, and product type," Electronic Commerce Research, Springer, vol. 16(3), pages 355-374, September.
    15. Haoyu Liu & Lifeng Yang & Duane T. Wegener, 2023. "Effects of labeling on risk taking in “leveling-up” decisions: ascending versus descending permutations and ending in terminal values," Marketing Letters, Springer, vol. 34(1), pages 125-138, March.
    16. Friedman, Daniel & Isaac, R. Mark & James, Duncan & Sunder, Shyam, 2014. "Risky Curves: On the Empirical Failure of Expected Utility," Santa Cruz Department of Economics, Working Paper Series qt87v8k86z, Department of Economics, UC Santa Cruz.
    17. Aldo Montesano, 2019. "On some aspects of decision theory under uncertainty: rationality, price-probabilities and the Dutch book argument," Theory and Decision, Springer, vol. 87(1), pages 57-85, July.
    18. Steven J. Humphrey & Nadia-Yasmine Kruse, 2024. "Who accepts Savage’s axiom now?," Theory and Decision, Springer, vol. 96(1), pages 1-17, February.
    19. Vriend, Nicolaas J., 1996. "Rational behavior and economic theory," Journal of Economic Behavior & Organization, Elsevier, vol. 29(2), pages 263-285, March.
    20. Colin F. Camerer & George Loewenstein & Drazen Prelec, 2004. "Neuroeconomics: Why Economics Needs Brains," Scandinavian Journal of Economics, Wiley Blackwell, vol. 106(3), pages 555-579, October.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:plo:pone00:0129581. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: plosone (email available below). General contact details of provider: https://journals.plos.org/plosone/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.