Two Kinds of Adaptation, Two Kinds of Relativity

20 Pages Posted: 20 Sep 2010

Date Written: September 19, 2010

Abstract

This paper presents a review of adaptation concepts at the evolutionary, environmental, neural, sensory, mental and mathematical levels, including Helson’s and Parducci’s theories of perception and category judgments. Two kinds of adaptation can be clearly distinguished. The first, known as level adaptation, refers to the shift of the neutral perception level to the average stimulus value. It results in a single reference point and stimuli changes represented in absolute terms. This concept is employed by Prospect Theory, which assumes that gains and losses are perceived as monetary amounts. The second kind of adaptation refers to the adjustment of perception sensitivity to stimuli range. It results in two reference points (minimum and maximum stimulus) and stimuli changes perceived in relative terms. Both range adaptation and range relativity are well documented phenomena and have even been confirmed by the creators of Prospect Theory. This makes room for another decision making theory based on the range relativity approach. As shown by Kontek (2009), such a theory would not require the concept of probability weighting to describe lottery experiments or behavioral paradoxes.

Keywords: Adaptation-Level Theory, Range-Frequency Theory, Prospect Theory

JEL Classification: C91, D03, D81, D87

Suggested Citation

Kontek, Krzysztof, Two Kinds of Adaptation, Two Kinds of Relativity (September 19, 2010). Available at SSRN: https://ssrn.com/abstract=1679447 or http://dx.doi.org/10.2139/ssrn.1679447

Krzysztof Kontek (Contact Author)

Warsaw School of Economics (SGH) ( email )

aleja Niepodleglosci 162
PL-Warsaw, 02-554
Poland

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