DR@W
DR@W
Decision Research at Warwick (DR@W) is an interdisciplinary initiative which focuses on behavioural and experimental research of decision making.
Formed in January 2010, DR@W brings together researchers and students from Economics, Psychology, Statistics, Warwick Mathematics Institute, Warwick Manufacturing Group and Warwick Business School that are interested in current developments in the area of experimental and behavioural research.
The Department of Economics have created and manage a large computer laboratory for use with experiments.
Visit the Decision Research at Warwick website for further details.
DR@W Forum: Lionel Page (Queensland)
We consider utility as a hedonic reward system shaped by evolution to motivate us to make the best decisions possible. This system gives higher subjective rewards to higher levels of success. We investigate how an optimal reward system would adapt when individuals receive new information about their potential, i.e. the level of success they may be able to reach. We are able to explain key features about subjective utility. First, the utility function over outcomes is S-shaped around an individual's expectations about his potential which acts as a reference point. Second, this utility function is steeper below the reference point, leading to the emergence of loss aversion. Third, individuals experience anticipatory utility associated with forming higher expectations about their potential.