 Choice-theoretic foundations of the divisive normalization modelKai Steverson, Adam Brandenburger and Paul Glimcher Journal of Economic Behavior & Organization, 2019, vol. 164, issue C, 148-165 Abstract: Recent advances in neuroscience suggest that a utility-like calculation is involved in how the brain makes choices, and that this calculation may use a computation known as divisive normalization. While this tells us how the brain makes choices, it is not immediately evident why the brain uses this computation or exactly what behavior is consistent with it. In this paper, we address both of these questions by proving a three-way equivalence theorem between the normalization model, an information-processing model, and an axiomatic characterization. The information-processing model views behavior as optimally balancing the expected value of the chosen object against the entropic cost of reducing stochasticity in choice. This provides an optimality rationale for why the brain may have evolved to use normalization-type models. The axiomatic characterization gives a set of testable behavioral statements equivalent to the normalization model. This answers what behavior arises from normalization. Our equivalence result unifies these three models into a single theory that answers the “how”, “why”, and “what” of choice behavior. JEL-codes: D81 D87 (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:164:y:2019:i:c:p:148-165 DOI: 10.1016/j.jebo.2019.05.026 Access Statistics for this article Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D. More articles in Journal of Economic Behavior & Organization from Elsevier |
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