IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/25169.html
   My bibliography  Save this paper

Two Kinds of Adaptation, Two Kinds of Relativity

Author

Listed:
  • Kontek, Krzysztof

Abstract

This paper presents a review of adaptation concepts at the evolutionary, environmental, neural, sensory, mental and mathematical levels, including Helson’s and Parducci’s theories of perception and category judgments. Two kinds of adaptation can be clearly distinguished. The first, known as level adaptation, refers to the shift of the neutral perception level to the average stimulus value. It results in a single reference point and stimuli changes represented in absolute terms. This concept is employed by Prospect Theory, which assumes that gains and losses are perceived as monetary amounts. The second kind of adaptation refers to the adjustment of perception sensitivity to stimuli range. It results in two reference points (minimum and maximum stimulus) and stimuli changes perceived in relative terms. Both range adaptation and range relativity are well documented phenomena and have even been confirmed by the creators of Prospect Theory. This makes room for another decision making theory based on the range relativity approach. As shown by Kontek (2009), such a theory would not require the concept of probability weighting to describe lottery experiments or behavioral paradoxes.

Suggested Citation

  • Kontek, Krzysztof, 2010. "Two Kinds of Adaptation, Two Kinds of Relativity," MPRA Paper 25169, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:25169
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/25169/1/MPRA_paper_25169.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Arthur J. Robson, 2002. "Evolution and Human Nature," Journal of Economic Perspectives, American Economic Association, vol. 16(2), pages 89-106, Spring.
    2. Harry Markowitz, 1952. "The Utility of Wealth," Journal of Political Economy, University of Chicago Press, vol. 60, pages 151-151.
    3. Arthur J. Robson, 2001. "The Biological Basis of Economic Behavior," Journal of Economic Literature, American Economic Association, vol. 39(1), pages 11-33, March.
    4. Mochon, Daniel & Norton, Michael I. & Ariely, Dan, 2008. "Getting off the hedonic treadmill, one step at a time: The impact of regular religious practice and exercise on well-being," Journal of Economic Psychology, Elsevier, vol. 29(5), pages 632-642, November.
    5. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-291, March.
    6. repec:cup:judgdm:v:3:y:2008:i::p:174-180 is not listed on IDEAS
    7. repec:cup:judgdm:v:2:y:2007:i::p:292-311 is not listed on IDEAS
    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. Avi Waksberg & Andrew Smith & Martin Burd, 2012. "A model of decision making in an ecologically realistic environment: Relative comparison and the Independence of Irrelevant Alternatives," Journal of Bioeconomics, Springer, vol. 14(3), pages 197-215, October.
    2. Anton Suvorov & Jeroen van de Ven, 2008. "Goal Setting as a Self-Regulation Mechanism," Working Papers w0122, Center for Economic and Financial Research (CEFIR).
    3. Elisabeth Gsottbauer & Jeroen Bergh, 2011. "Environmental Policy Theory Given Bounded Rationality and Other-regarding Preferences," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 49(2), pages 263-304, June.
    4. Cavatorta, Elisa & Groom, Ben, 2014. "Preferences and Exposure to Shocks: Evidence from a Natural Experiment in Palestine," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100592, Verein für Socialpolitik / German Economic Association.
    5. Maarten Voors & Eleonora Nillesen & Philip Verwimp & Erwin Bulte & Robert Lensink & Daan van Soest, 2010. "Does Conflict affect Preferences? Results from Field Experiments in Burundi," Research Working Papers 21, MICROCON - A Micro Level Analysis of Violent Conflict.
    6. Krzysztof Kontek & Michal Lewandowski, 2018. "Range-Dependent Utility," Management Science, INFORMS, vol. 64(6), pages 2812-2832, June.
    7. José F. Tudón M., 2019. "Perception, utility, and evolution," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 7(2), pages 191-208, December.
    8. Philippe Jehiel & Jakub Steiner, 2020. "Selective Sampling with Information-Storage Constraints [On interim rationality, belief formation and learning in decision problems with bounded memory]," The Economic Journal, Royal Economic Society, vol. 130(630), pages 1753-1781.
    9. Hooi Hooi Lean & Michael McAleer & Wing-Keung Wong, 2013. "Risk-averse and Risk-seeking Investor Preferences for Oil Spot and Futures," Documentos de Trabajo del ICAE 2013-31, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico, revised Aug 2013.
    10. Chorvat, Terrence, 2006. "Taxing utility," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 35(1), pages 1-16, February.
    11. Grund, Christian & Sliwka, Dirk, 2001. "The Impact of Wage Increases on Job Satisfaction - Empirical Evidence and Theoretical Implications," IZA Discussion Papers 387, Institute of Labor Economics (IZA).
    12. Martin Kukuk & Stefan Winter, 2008. "An Alternative Explanation of the Favorite-Longshot Bias," Journal of Gambling Business and Economics, University of Buckingham Press, vol. 2(2), pages 79-96, September.
    13. Bosch-Domenech, Antoni & Silvestre, Joaquim, 1999. "Does risk aversion or attraction depend on income? An experiment," Economics Letters, Elsevier, vol. 65(3), pages 265-273, December.
    14. Karine Darjinoff & Francois Pannequin, 2000. "Demande d'assurance : Faut-il abandonner le critère de l'espérance d'utilité ?," Cahiers de la Maison des Sciences Economiques bla00004, Université Panthéon-Sorbonne (Paris 1).
    15. Barberis, Nicholas & Xiong, Wei, 2012. "Realization utility," Journal of Financial Economics, Elsevier, vol. 104(2), pages 251-271.
    16. Bowman, David & Minehart, Deborah & Rabin, Matthew, 1999. "Loss aversion in a consumption-savings model," Journal of Economic Behavior & Organization, Elsevier, vol. 38(2), pages 155-178, February.
    17. Hopfensitz, Astrid, 2009. "Previous outcomes and reference dependence: A meta study of repeated investment tasks with and without restricted feedback," MPRA Paper 16096, University Library of Munich, Germany.
    18. Nowak, Maciej, 2007. "Aspiration level approach in stochastic MCDM problems," European Journal of Operational Research, Elsevier, vol. 177(3), pages 1626-1640, March.
    19. M. Cain & D. Peel & D. Law, 2002. "Skewness as an explanation of gambling by locally risk averse agents," Applied Economics Letters, Taylor & Francis Journals, vol. 9(15), pages 1025-1028.
    20. Fershtman, Chaim, 1996. "On the value of incumbency managerial reference points and loss aversion," Journal of Economic Psychology, Elsevier, vol. 17(2), pages 245-257, April.

    More about this item

    Keywords

    Adaptation-Level Theory; Range-Frequency Theory; Prospect Theory;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D87 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Neuroeconomics

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:pra:mprapa:25169. 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: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    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.