Showing posts with label discounting. Show all posts
Showing posts with label discounting. Show all posts

Friday, February 24, 2012

Well, that wasn’t worth it: Effort discounting in the brain


Most of us have a complicated relationship with the effort required to get things done.  On the one hand, we generally prefer to do things in the easiest possible way.  On the other hand, there are times when the effort we put in to accomplish a goal becomes part of the reward itself.

From a biological standpoint, though, for most situations we are probably best off finding the least effortful way to achieve a goal.  That is, an animal that routinely puts in a lot of effort to get some reward (say, food) will be at a disadvantage relative to some other animal that puts in less effort to get the same reward.  So, we might expect that humans would have mechanisms that allow the amount of effort we expend to achieve a reward to affect the value we give to that reward.  

This question was examined in a 2009 paper in Cognitive, Affective, and Behavioral Neuroscience by Matthew Botvinick, Stacy Huffstetler, and Joseph McGuire.  They explored a phenomenon called effort discounting, which is just a fancy way of saying that the more effort that you put into something, the less valuable the reward associated with the effort. 

They had people do two simple tasks in an fMRI scanner.  On each trial, they saw a numeral (0 and 5 were never shown).  If the numeral was yellow, they judged whether the numeral was odd or even.  If it was blue, they judged whether it was greater or less than 5.  Sometimes, the study required low effort.  In low effort blocks, people did a series of trials on only one of the tasks.  Sometimes, the study required high effort.  In high effort blocks, the two trials were randomly mixed together.  It is hard for people to switch back and forth between judgments, and so these blocks were much more difficult than the blocks that all involved the same judgment. 

After each block of trials, people were told whether they received a one dollar reward.  They were told that the computer would decide randomly whether they got the reward and that the reward was not based on their speed or accuracy in doing the task.  They were also told that the level of difficulty of the task would not affect whether they got the reward. 

The authors measured blood flow in the brain (which is related to brain activity).  They were particularly interested in a brain structure called the Nucleus Accumbens.  This structure is deep in the brain in an area called the basal ganglia.  This brain area is known to be involved when people are evaluating rewards.

The authors found that this area responded much less to a cash reward when people just did a high effort set of trials than when they did a low effort set of trials.  Another brain area, the Anterior Cingulate Cortex was related to the amount of effort people put in.  And the more this area was active (signaling that people perceived higher effort), the less that the reward was valued.

There are a few important things to say about this finding.

First, the Nucleus Accumbens is a deep and evolutionarily old portion of the brain.  This means that the tendency to see rewards as less valuable when they required more effort is a central part of our psychological makeup.

Second, in general it really is a good idea for us to accomplish our goals in the simplest way.  If we always found elaborate ways to satisfy goals that could be satisfied more simply, we would spend a lot of time wasting effort and energy.

Third, in those situations where we value the effort, the journey is often more rewarding than the destination.  For example, if you remodel your own home, then you probably put in a lot more effort than you would have put in if you hired someone else to do it.  In this case, though, the process of doing the remodeling is also rewarding.  In addition, whenever you look at the final product, you will remember that effort.  Those memories can also lead to feelings of pride in your accomplishment. 

So don’t shy away from putting in effort, but remember that effort is best spent when it will lead to a great reward or when the effort itself is part of what is rewarding in the first place.

Thursday, September 29, 2011

Your perception of your future self affects how you value future outcomes


Many choices in life reflect a tradeoff between the value of things in the present and in the future.  For example, if I buy a new computer today, I get to use that new computer now, but undoubtedly a better one will come out a year from now that will be nicer than the one I just bought.  Similarly, if I invest money in the stock market, I am trading the value of that money to me now for the hope that it will be worth a larger amount in the future. 

Clearly, some option in the future has to be more valuable than the option available in the present in order for us to wait for it.  But how much better does the future have to be in order for us to wait?

You can think of your willingness to wait until some time in the future to get something (an object or money) that is similar to what you could get now as your degree of patience.  An interesting paper in the February, 2010 issue of the Journal of Experimental Psychology: General by Dan Bartels and Lance Rips suggests that the people are more patient when they view their future self as being similar to their current self.

Let me break this down.  Being patient means that you are willing to wait to get something that you could get more without requiring a huge increase in value to pay for the wait.  For example, imagine you had the chance to get $100 right now.  I might give you the chance to wait a year to get more money.  How much more would you need to get to wait the year?  If you said that you needed $110, that would be more patient than if you said $150. 

The authors looked at this question a few different ways.  First, they just used correlations.  They had people rate how similar the person they are right now would be to the person they think they will become at various points in the future.  Then, they had people do exercises in which they had to say how much money they would want to wait a particular amount of time predict the amount of money that would be required for them to wait to get some amount of money (as in the example in the previous paragraph).  They found that for each individual, time periods with large decreases in self-similarity people also became less patient.

In other studies, they had participants read about other people and their life changes.  Some of those life changes were fairly small (Jill discovered she likes rice dishes), while others were more significant (Bill had a health scare in which doctors thought he had a rare blood disease, but in the end he was found to be perfectly healthy).  The participants in the study rated the similarity of the people in the story before and after the events.  Later, they also did patience tasks like the one described earlier.  In some of these studies, the valuable things were things like vacation days from work rather than money. 

In these experimental studies, participants judged that the people would be more patient in periods in which they had undergone only small life changes than when they had undergone big life changes.  People also felt that the big life changes would make the person more different from their former self than the small life changes.

What does this all mean? 

When we plan for our own future, we are most focused on sharing the things we have with our future self.  The more similar we are to that future self, the more willing we are to share. 

 Often, though, we must make plans to put things off to the distant future when we feel that we will be quite different from what we are now.  For example, many people have difficulty saving enough money for their retirement.  You must begin saving for retirement when you are in your 20s or 30s, even though you may not  retire until you are in your 60s or 70s.  That means that you must agree to share your current money with someone who feels very little like you now.  Because this future self feels so different, people often put away too little money toward their retirement.  That is one reason why government pension funds like Social Security end up being so important to people.

In the end, when trying to plan for the future, it is probably best to use a little more math and a little less intuition.  For example, in the case of retirement savings, work with someone to make an assessment of how much money you will need when you retire.  Then, create a specific savings plan that will lead you to that amount of money in the future. Otherwise, you will be most likely to share that current money with a self that is more like who you are right now.