Identifying General Socioeconomic and Environmental Factors Affecting Human Decision-Making and Behavior

Understanding how people make decisions in real-world circumstances provides the foundation for the social sciences and for the design of public policy and planning. The apparent failures –especially for disadvantaged populations– to make choices that conform to classical choice theory are often interpreted as deviations from “rationality”. By contrast, new findings in psychology and environmental neuroscience point to an alternative explanation. This is that real-world decisions are relational to the state of the environment and are path-dependent. Moreover, these influences operate via specific channels tied to psychological distance (in space, time, social relations), environmental uncertainty, and socioeconomic status, which modulates possible choices and outcomes. The hypothesis that follows is that there can still be a theory of optimal decision making, once choices are made conditional on these factors. This predicts, for example, situation where temporal discounting may be strong or weak, depending on circumstances and outlook.

This working group will bring together a multidisciplinary group of researchers from around the world to create and test a synthesis of these recent findings. We will investigate the role of key variables identified in the literature - resources, predictability of the environment, control over opportunities – to create an improved understanding of agent-environment interactions and their consequences for human decisions and life course development. A central goal of the working group is to critically assess stereotypes of “irrationality” associated with socioeconomic disadvantage. These considerations will help inspire new approaches to policy for poverty mitigation emphasizing both incentives directed at individuals and environmental interventions capable of re-framing decision-making. Another is to seek new theoretical syntheses, towards testable and predictive theories of human decision making under specific environmental circumstances. This meeting was supported under SFI's Emergent Political Economies grant provided by the Omidyar Network, with additional support from the Robert Wood Johnson Foundation Grant #81366.