Dear Christian,

I suggest you to see links in topic.

-Comparing Public and Private Sector Decision Making - CiteSeerX

citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.455...

-4 Factors Influencing Cooperation in Commons Dilemmas: A Review ...

https://www.nap.edu/read/10287/chapter/6

-Are Economists Selfish and Rational? - Universität Bielefeld

www.uni-bielefeld.de/soz/ag/hedtke/.../hellmich_state-of-the-art.pd...

-Environmental Valuation, Cost-Benefit Analysis and Policy Making - SSB

https://www.ssb.no/a/histstat/doc/doc_199612.pdf

Best regards

Thank you very much Mohamed-Mourad!

"The Drama of the Commons" had some interesting aspects for me to consider; pool size uncertainty and value appropriation.

When I allow for external effects of economic goods, things become a little blurred but intuitively, it strikes me that properties like the ones mentioned above are much more pronounced for public goods. I could also imagine "System 2" to be more active due to the greater perceived complexity of public issues--or "System 1" as a cost-saving heuristic if expensive "System 2" is lazy again. Obstacle to be overcome: I cannot find research that confirms this.

I know T. C. Brown and D.C. Kingsley (2010; 2013) worked on this but their results were less pronounced than expected and further reduced after preference learning effects.

Upon your suggestions I also honed the description of my question--that's very helpful, too!

Thank you again!

Hello Christian,

One possible approach to the question you posed might have to do with the fact that a decision maker has to carry out additional value computation for others' welfare in the PG context (either in the classical public good game paradigm, or in more general experimental contexts where one has to choose between reward for self vs. others). This adds at least two distinct elements to decision making process involving self alone : 1) forming the representation of other-benefiting values, 2) comparing subjective utility of self vs. other-regarding behaviors. The second component can also involve consideration of potential risk or reputational consequence. Accordingly, decisions involving PG may recruit some extra cognitive processes such as ToM (e.g. modeling how much other regarding behaviors could bring actual benefit to others), risk processing (e.g. calculating potential risk/ambiguity associated with public investment) , self-control (e.g. normative suppress of egoistic motives that intuitively favor self-serving behaviors), and impression management (e.g. modeling reputational consequences of other-regarding behaviors) as well as some uniquely social emotional experience such as inequity aversion or guilt (e.g., for not investing to public account). Some of these processes are particularly important when private vs. public good are in conflict. Yet, I think that we can infer some general element specific to judgments involving private vs. public good.

Recent findings in cognitive/decision neuroscience show that judgments involving others vs. self tend to be more "objective," "abstract" and in a way "cognitive" although the language might not exactly match the terms that have been used in psychology or behavioral economics. Here are some of the studies that might serve as useful reference.

1) Ruff, C. C., & Fehr, E. (2014). The neurobiology of rewards and values in social decision making. Nature Reviews Neuroscience, 15(8), 549.

-> This is one of the most recent, and best reviews that provides a conceptual framework for value-based decision making paradigm in cognitive neuroscience. It has a section showing how decisions involving others would recruit either common or distinct neural circuitries (see page 5) in the brain. This may point to some of the key differences between the two modes of decisions you are interested in.

3) Knoch, D., Schneider, F., Schunk, D., Hohmann, M., & Fehr, E. (2009). Disrupting the prefrontal cortex diminishes the human ability to build a good reputation. Proceedings of the National Academy of Sciences, pnas-0911619106.

-> This study used TMS showing that other-regarding behaviors could involve extra-cognitive control housed in the dlpfc: this could reflect keeping track of one's reputational gain, or/and also suppressing egoistic motives to pursue self-serving outcomes.

4) Strang, S., Gross, J., Schuhmann, T., Riedl, A., Weber, B., & Sack, A. T. (2014). Be nice if you have to—the neurobiological roots of strategic fairness. Social cognitive and affective neuroscience, 10(6), 790-796.

-> This is more recent finding that is in line with Knoch, but used fMRI data to reveal more a detailed picture of neural circuitries.

5) Yu, H., Shen, B., Yin, Y., Blue, P. R., & Chang, L. J. (2015). Dissociating guilt-and inequity-aversion in cooperation and norm compliance. Journal of Neuroscience, 35(24), 8973-8975.

-> This paper provides evidence for dissociable consequence of "guilt" and "inequity aversion" which in my opinion are emotional/motivational states of social origin that could otherwise be missing in a private-decision making context.

6) Telzer, E. H., Masten, C. L., Berkman, E. T., Lieberman, M. D., & Fuligni, A. J. (2011). Neural regions associated with self control and mentalizing are recruited during prosocial behaviors towards the family. Neuroimage, 58(1), 242-249.

-> This works shows a potential involvement of self-control and mentalizing-realted activities in the brain when one engages in prosocial behaviors towards one's own family- which represent one of the most basic form of "public" goods.

7> Emonds, G., Declerck, C. H., Boone, C., Vandervliet, E. J., & Parizel, P. M. (2012). The cognitive demands on cooperation in social dilemmas: an fMRI study. Social Neuroscience, 7(5), 494-509.

-> Similar to Telzer et al (2011), this study used two different economic decision making games (e.g. the Prisoner's Dilemma game and the stag-hunt game) in fMRI sensing to investigate how decisions involving others could impose cognitive burdens to human brain.

8) Jung, D., Sul, S., & Kim, H. (2013). Dissociable neural processes underlying risky decisions for self versus other. Frontiers in neuroscience, 7, 15.

This study shows that people tend to use slightly different risk-related decision probability functions when making a series of decisions for self vs. others, each of which recruits dissociable neural activities in the brain.

9) Vives, M. L., & FeldmanHall, O. (2018). Tolerance to ambiguous uncertainty predicts prosocial behavior. Nature communications, 9(1), 2156.

-> This recent article shows that people who are more ambiguity tolerant are more likely to conduct prosocial behaviors at least in some experimental contexts. This results suggest that public good processing could also bring about consideration of risk and ambiguity associated with the (potentially negative) outcome of behaviors.

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While recognizing several, possibly unique properties of decisions involving public vs. private good, I'd also like to emphasize that the nature of public good can be vastly different depending on 1) decision maker's own (pro)social orientation, 2) how "public" is defined in relation to self, and 3) how social institution shapes individuals' primary mode of decisions (this could either be individual- or population level.) These also mean that specific cognitive or affective mechanisms subserving public vs. private decision making may differ across individuals, study samples or different cultural groups. Here are several studies that might help you tap into these issues:

1) Sul, S., Tobler, P. N., Hein, G., Leiberg, S., Jung, D., Fehr, E., & Kim, H. (2015). Spatial gradient in value representation along the medial prefrontal cortex reflects individual differences in prosociality. Proceedings of the National Academy of Sciences, 201423895.

-> This paper shows that a neural representation of other-regarding behaviors are different among participants with prosocial vs. pro-self orientation. Note that pro-self individuals tend to be more "cognitive" when they chose prosocial actions, while pro-self individuals remain relatively more "intuitive" when making the same other-regarding choices.

2) Kuss, K., Falk, A., Trautner, P., Elger, C. E., Weber, B., & Fliessbach, K. (2011). A reward prediction error for charitable donations reveals outcome orientation of donators. Social cognitive and affective neuroscience, 8(2), 216-223.

-> This paper also reveals how individual difference in prosocial orientation could modulate neural responses to choices that benefit self vs. public.

3) Strombach, T., Weber, B., Hangebrauk, Z., Kenning, P., Karipidis, I. I., Tobler, P. N., & Kalenscher, T. (2015). Social discounting involves modulation of neural value signals by temporoparietal junction. Proceedings of the National Academy of Sciences, 112(5), 1619-1624.

-> This is an interesting study showing that the relationship distance between self and other critically modulates value computation, which, in turn, leads to differential degree of generous/prosocial behaviors in a simple economic decision game.

4) Rand, D. G., Greene, J. D., & Nowak, M. A. (2012). Spontaneous giving and calculated greed. Nature, 489(7416), 427.

This is a very important study suggesting that people tend to engage in prosocial behaviors (in the public good game) rather intuitively. This may seem to run counter to the argument that other-regarding judgments involve some extra-cognitive processes which would typically delay response time in cognitive experiments. But, in fact, the author suggests that specific facet of decision mechanisms involving consideration of private good vs. public good could be largely contingent on individuals' value orientations (e.g. how they value public good over private good or vice versa) and social institutions that shape individuals' dominant modes of decision (e.g. how people are accustomed to making decisions benefiting self vs. others). Under this framework, some characteristics of decisions (e.g. RT) involving public and private good are solely determined not by their intrinsic properties (e.g. public vs. private), but rather by what type of social inputs (a group of) individuals have been exposed to during development.

If you are interested in this line of works, look for "Social heuristics hypothesis" by David Rand (For example, Rand, D. G. (2016). Cooperation, fast and slow: Meta-analytic evidence for a theory of social heuristics and self-interested deliberation. Psychological Science, 27(9), 1192-1206.).

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The answer has become somewhat wordy. But in short, I think that decisions involving public good may typically involve additional cognitive mechanisms required for: estimating how much other's welfare is valuable to self, comparing values of reward to others vs. self, accurately estimating other's preference (towards outcomes that you are about to deliver), overcoming risk and ambiguity, estimating how decisions promoting/undermining public good could impact one's own reputation, and other- and self-directed emotional processes associated with self vs. other-regarding choices. These some of these processes would make decisions involving public good vs. private good more abstract and cognitively taxing. However, the specific patterns of differences between representations of public good and private good may differ according to individuals' orientation towards pro-self vs. prosocial decisions, and to dominant decision modes widely promoted in a given socio-cultural context (which will determine individuals degree of familiarity and "decision habits.").

My answers are mostly grounded in decision neuroscience and might not use the exactly same terms you are looking for. However, I believe that lots of these works reveal how decision mechanisms involving private good vs. public good are different in various value/affective/cognitive domains. I hope this helps you.

Please feel free to let me know if you have any questions or other need other resources. I'd also be happy to discuss here.

Best,

Minwoo

Hi Minwoo Lee,

Many thanks for your comprehensive answer! Sorry for the delayed reply, I didn't see the notification.

Here's my wordy comment to your wordy (grateful for that) answer:

Of particular interest to me are decisions where you have, let's say, both economic and social objects of decision, e.g. buying fair trade products at a premium. So, Ruff and Fehr (2014) is a great source for that!

You wrote that public goods involve additional cognitive mechanism--is there evidence for this in one of the papers or is it currently a hypothesis of yours (sorry, haven't read them all yet)? In a simple scenario it's conceivable that if you have a good from which a certain utility/value accrues to a decision-maker and another good with the same utility accruing to her but additional other-regarding value, this would warrant the hypothesis but I haven't seen any evidence in terms of, for example, firing rates. And if you took this to the extremes of cognitive resources, which value computation would suffer, if any?

Because, given constraint cognitive resources and sufficiently complex decisions, there may not be enough "computation power" in our brain for this additionality - or it would simply become "too costly" in terms of energy required for a thorough assessment (neurobiological constraint & rational inattention; see e.g. Webb, Glimcher, & Louie, 2016). If one's capacity was exceeded, would this lead to greater decision variance (e.g. rational imprecision (Steverson & Brandenburger, 2016)) in total or would one decision object suffer more than the other, i.e. no change in cognitive resources spent on economic goals but proportionally less on social goals?

To my knowledge we cannot yet answer this due to the complexity of cortical networks, outstanding prove of causal relations (think: lesion studies etc.) and the sheer variety of decision objects but that would be an incredibly exciting research project. Very grateful for input in this regard!

To facilitate understanding: I'm concerned with the neural substrate of utility, i.e. subjective value (Levy & Glimcher, 2012 --> common neural currency hypothesis; Glimcher & Tymula, 2017). To my understanding, Expected Subjective Value Theory relates to the final decision value and less to the sources of input. There are some brilliant decision models built on this (e.g. Webb, Glimcher, & Louie, 2016), however, mostly with a lot of input from economic decisions. I wonder if this captures public goods or if one had to adjust the models for this purpose.

Adding to your insightful list of differences between economic and social decisions, I found warm glow effects (Harbaugh, 2007), and insenitivity to scope, which I deem related to the embedding effect (e.g. Diamond & Hausman, 1994), quite useful. Here's what Diamond and Hausman write about the embedding effect: "The embedding effect is usually thought to arise from the nonexistence of individual preferences for the public good in question and from the failure of survey respondents, in the hypothetical circumstances of the survey, to consider the effect of their budget constraints" (p. 46). I'm not sure if insensitivity to scale also features in private good decisions but it doesn't seem to me as compatible with monotonically increasing utility functions--or, in layman's term--the concept of "more is better".

Diamond and Hausman also mention protest bids. In this context, Sawe (2017 [Using neuroeconomics to understand environmental valuation]) states: "Moral outrage can also spur emotional protest responses, in the form of a decision not to respond (e.g., “you can't put a price on that, it's invaluable”) or WTP “protest bids” which are treated as zero (Lo and Jim, 2015; Spash and Hanley, 1995). While modern stated choice experiments avoid the protest bid problem which still plagues CV studies – acknowledging that in its place the status quo bias creates a new source of information loss (Hanley et al., 2006) – the emotional element of protest bids provides a useful framework for discussing neural systems critically involved in valuation" (p. 4).

I hope this narrowed the question down a little. The question of this thread was phrased too widely--my fault.

Basically, if you combine Expected Subjective Value Theory with Khaw, Grab, Livermore, Vossler & Glimcher (2015), Sawe and Knutson (2015), and Ruff and Fehr (2014), you get an idea of where I'm going with this. Obviously, there's lots of work to be done but for now, I needed some good reasons why public good decisions might differ from private good decisions. With your and Mohamed's input, my case has been considerably strengthened, I would argue. Thank you very much!