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Two Kinds of Adaptation, Two Kinds of Relativity

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  • 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
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    File URL: https://mpra.ub.uni-muenchen.de/25169/1/MPRA_paper_25169.pdf
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    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. Ivo Vlaev & Nick Chater & Neil Stewart, 2007. "Relativistic financial decisions: Context effects on retirement saving and investment risk preferences," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 2, pages 292-311, October.
    4. Arthur J. Robson, 2001. "The Biological Basis of Economic Behavior," Journal of Economic Literature, American Economic Association, vol. 39(1), pages 11-33, March.
    5. 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.
    6. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-291, March.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Adaptation-Level Theory; Range-Frequency Theory; Prospect Theory;

    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

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