A Bayesian analysis of human decision-making on bandit problems

The bandit problem is a dynamic decision-making task that is simply described, well-suited to controlled laboratory study, and representative of a broad class of real-world problems. In bandit problems, people must choose between a set of alternatives, each with different unknown reward rates, to maximize the total reward they receive over a fixed number of trials. A key feature of the task is that it challenges people to balance the exploration of unfamiliar choices with the exploitation of familiar ones. We use a Bayesian model of optimal decision-making on the task, in which how people balance exploration with exploitation depends on their assumptions about the distribution of reward rates. We also use Bayesian model selection measures that assess how well people adhere to an optimal decision process, compared to simpler heuristic decision strategies. Using these models, we make inferences about the decision-making of 451 participants who completed a set of bandit problems, and relate various measures of their performance to other psychological variables, including psychometric assessments of cognitive abilities and personality traits. We find clear evidence of individual differences in the way the participants made decisions on the bandit problems, and some interesting correlations with measures of general intelligence