Transcript Slide 1

VIRTUAL EXPERIMENTS IN ECONOMICS
A METHODOLOGICAL ASSESSMENT
Alessandro Innocenti
(University of Siena)
To propose Low immersive virtual experiments (LIVE) as
tools for experimental economics where the laboratory
approach has important limitations.
To explore the potentiality of LIVE by providing the
preliminary findings of two specifically designed
experimental studies investigating risk propension under
social exposure and risk perception in workplaces.
Failures of Lab Experiments
The Context-Free Bias
Virtual Experiments
The ALBO Project
Results
Conclusions
a) situations are not really presented, but only
described through language
b) choices and decisions are only to be evoked, not to
be really performed
c) there is a lack in the normal cascade of events as
actions and reactions
d) temporal frame is generally compressed
e) irrelevance of the context
Many experimental economists seem to view their
enterprise as akin to silicon chip production. Subjects
are removed from all familiar contextual cues. Like the
characters 'thing one' and 'thing two' in Dr. Suess' Cat
in the Hat, buyers and sellers become 'persons A and
B', and all other information that might make the
situation familiar and provide a clue about how to
behave is removed.
George Loewenstein (1999)
The context-free experiment is an elusive goal
A major tenet of cognitive psychology is how all
forms of thinking and problem solving are contextdependent
The laboratory is not a socially neutral context, but
is itself an institution with its own formal or informal,
explicit or tacit, rules
Games in the laboratory are usually played without
labels but subjects inevitably apply their own labels
Labels can increase experiment’s external validity
with a minimal sacrifice of internal validity
In particular, to test learning and cognitive models, it
is necessary to remind and to evoke contexts which
may activate emotions, association, similarities in
the laboratory
Labels can make subjects more or less rational in
relation to the evoked context
Jones-Sugden Theory and Decision (2001)
Positive confirmation bias: tendency, when testing an
existing belief, to search for evidence which could
confirm that belief, rather than disconfirming it
The original selection Wason’s task was formulated in
highly abstract terms
Correct response was facilitated by adding thematic
content to the task, i.e. a cover story which accounts
for the statement and gives some point to the task
Innocenti-Pazienza-Lattarulo Transport Policy (2013)
Main finding: Subjects’ inclination to prefer cars over
bus and metro tends to override the incentives’ effect
Laboratory behavior depends more on prior learning
outside the laboratory than on gains in the laboratory
In the experiment, it is as if subjects take into the lab
the preferences applied to real choices between car,
bus and metro and stick to them with high probability
Labels give subjects clues to become less and not
more rational
The use of presentations with virtual reality (VR)
simulations can convey objectively this kind of context
“A Virtual Experiment is an experiment set in a
controlled lab-like environment, using typical lab or
field participants, that generates synthetic field cues
using Virtual Reality (VR) technology.” Fiore,
Harrison, Hughes and Rutström (2009) FHHR (p. 66)
Virtual experiments are not defined as just those
occurring over the web (Virtual Worlds experiments
as a subset of Virtual Experiments)
Virtual Experiment combines insights from virtual
reality (VR) simulations in computer science, decision
making and ecological rationality from psychology,
and experiments from economics
The methodological objective of Virtual Experiments
is to combine the strengths of the artificial controls of
lab experiments with the naturalistic domain of field
experiments
High Immersive Virtual Experiments (HIVE) utilize
specialized displays such as CAVE, head-mounted
displays or augmented reality, which perceptually
surround subjects. The individual perceives himself to
be enveloped by, included in, and interacting with an
environment providing a continuous stream of stimuli
Desktop or Low Immersive Virtual Experiments
(LIVE) use computer screen based applications of
virtual reality, such as “ad hoc” virtual simulations or
virtual worlds (Second Life) to provide a weaker sense
of presence.
Bateman et al. 2009
In the majority of choice experiments on gain-loss
asymmetry (WTA>WTP) the attributes of non-market
goods are conveyed to respondents as a table of
numeric and/or categorical data.
Compared to the standard presentation, preferences
elicited in the Virtual Experiment are less variable and
exhibit a significant reduction in asymmetry between
willingness to pay for gains and willingness to accept for
corresponding losses.
Fiore et al. (2009)
Virtual Experiment to elicit risk perception from wild fires
and the opportunity cost of public funds allocated to
prescribed burns
Subjects experience four dynamic visual simulations of
specific wild fires, with varying weather and fuel
conditions. Simulations are selected to represent high
and low risk of fire damage
Participants experience a sense of presence, a
psychological state of “being there and take decisions
closer to real behavior” (with cognitive constraints )
Main objectives
To demonstrate that the standard tools for detecting
work-related factors of risk and stress
(questionnaires and interviews) are inadequate to
capture workers’ real perception
To prove that virtual and low immersive simulations
of work environments provide a better awareness of
psycho-social risks in workplaces
Experiment 1
Individual risk attitude under social exposure in the
lab is modified by the presence of a virtual coach
Experiment 2
Workers’ awareness of biases in risk perception is
enhanced by virtual simulations of their work
activities
Yechiam et al. “Observing others’ behavior and risk
taking in decisions from experience”, JDM 2008
choice between safe and risky option
two tasks: rare-loss and equiprobable-loss
exposure vs. no-exposure condition
observer vs. source role
Main finding: Observing others’ choices increases
observer’s risk propensity
Between-subject
52 undergraduate students (avg 22 y.)
Two subjects randomly and anonymously paired
playing as source and observer
30 repeated choices (alternate):
15 rare (equiprobable) gains
15 rare (equiprobale) losses
Comparison between source and observer condition
Table 1 Experimental design
Rare Gain-Loss Condition
Problem 1.
Rare
Gain
Problem 2.
Rare
Loss
Safe
option
(S)
Gain 2 tokens
(EV = 2)
Lose 2 tokens
(EV = -2)
Risky
option
(R)
Gain 30 tokens
(prob. 5%)
or
Gain 1 token
(prob. 95%)
(EV = 2.5)
Lose 30 tokens
(prob. 5%)
or
Lose 1 token
(prob. 95%)
(EV = -2.5)
Equiprobable Gain-Loss Condition
Problem 3.
Equiprobable
Gain
Problem 4.
Equiprobable
Loss
Gain 2 tokens
(EV = 2)
Lose 2 tokens
(EV = -2)
Gain 4 tokens
(prob. 50%)
or
Gain 1 token
(prob. 50%)
(EV = 2.45)
Lose 4 tokens
(prob. 50%)
Or
Lose 1 token
(prob. 50%)
(EV = -2.45)
Observers are more risk-lovers than sources also
for gains (as for losses in Yechiam et al. 2008)
Both roles are risk averse for losses and risk loving
for gains
No significant difference between rare/equiprobable
condition (differently from Yechiam)
Faster reaction time for sources
Personality traits (Big Five Questionnaire) matters
VS..
No significant differences in risk attitudes between
observers and sources
Both roles are confirmed as risk averse for losses
and risk loving for gains
No difference in reaction time across roles
Virtual environments are perceived as an intermediate
safe environment and allow structuring therapy like a
special and protected environment (Botella et al. 2008)
The Proteus Effect: deindividuation occurs in online
environments because users may adhere to identities
inferred from their avatars (McKenna & Bargh 2000,
Yee-Bailenson 2007)
Deindividuation can also lead to both prosocial and
antisocial behavior (Zimbardo 1969, Gergen et al. 1973).
Differences between observers and sources are
removed because the virtual coach make subjects’
choices less influenced by laboratory cues
The potentially worrisome desire to please the
experimenter is attenuated because no embodiment
of the experimental team appears in the lab
Virtual environment enables experimenter to focus
subjects on experimental tasks
By allowing participants to take on natural roles in
economic settings, virtual worlds can help subjects
to focus on the laboratory task
Virtual Movies vs. Real Movies in the Assessment of
Work Related Stress
Obj.: to verify the presence of differences in the
physiological and cognitive activations while
subjects watch real movies vs. virtual movies
Hp.: Vision of virtual movies is associated with a
lower physiological activation, a more detailed
narrative and a greater detection of ‘errors’, thanks
to a more objective perspective.
Between-subject
20 postgraduate students + 16 professional workers
2 Conditions: Real clip of a job stress situation +
Virtual simulation of the same clips
Detection of three physiological indices:
Heart rate
Electromyography (EMG), measures the
electrical impulses of face muscles at rest and
during contraction
Skin Conductance Level
Questionnaire Generalized Self-Efficacy and Locus
of Control (beliefs about control of events)
HR
25.00
20.00
15.00
10.00
5.00
0.00
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FC Avatar
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FC Reale
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EMG
14.00
12.00
10.00
8.00
6.00
4.00
2.00
0.00
1.00
2.00
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5.00
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EMG Avatar
7.00
8.00
EMG Reale
9.00
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Physiological activations (HR and EMG) are
significantly lower under virtual simulations
Limitations: Small sample and the use of pilot
movies
Research Implications: Results obtained through
the use of virtual reality tools allow to design stress
assessment interventions and online training
courses with virtual coaches
To test if subjects’ behaviour in VE conforms to
results generated in conventional experimentation
“Virtual experiments might be more convenient than
lab experiments if he sees people behave in he
same way in real-world and virtual experiments”
(List 2007)
“Determining where virtual world behavior mimics
real world behavior is quite important for
methodological reasons. If virtual world behavior
can be treated as a model of human behavior in
general, this would allow a fresh approach to
empirical social science” (Castronova 2008)
More naturalistic and less simple settings than
laboratory
Cheaper to maintain virtual laboratory facilities
Easier to control decision tasks and enviroments
No involuntary non-verbal communication
Wider and unbiased population
Virtual situations project a game-like atmosphere
Proteus effect / deindividuation (may be an asset)
it is difficult to establish subject trust in computer
software
(virtual worlds experiments) subjects’ identity is not
checked because physical presence is lacking
The difference between virtual and laboratory
experiments and between virtual and real behavior
is an asset rather than a problem for experimental
economics.
It can very helpful in solving some failures of lab
experiments
Ir/relevance of the context
Intertemporal choice – longtime experiments
Heterogeneous subject pools
Cross-cultural and professional comparisons
Induced-value theory: use of a reward medium allows
to induce pre-specified characteristics in experimental
subjects and to make subjects’ innate characteristics
largely irrelevant
(Smith 1992)
The central aspect of the VX methodology is a VR
environment that makes participants experience a
sense of presence, a psychological state of ‘‘being
there.’’ This sense depends on the degree of
involvement that participants experience as a
consequence of focusing attention on the set of
stimuli and activities generated by the VR simulation.
(Fiore et al. 2009)