This document proposes low immersive virtual experiments (LIVE) as tools for behavioral economics and cognitive psychology research. It explores the potential of LIVE by providing examples of applications and preliminary findings from laboratory studies. One example examines differences in physiological activation when subjects watch real movie clips versus virtual simulations of the same situations. Preliminary findings suggest exposure to low immersive virtual environments may trigger cognitive mechanisms to enhance stress perception compared to real experiences.

1. LOW IMMERSIVE VIRTUAL EXPERIMENTS.
METHODS AND APPLICATIONS
ALESSANDRO INNOCENTI
University of Siena and LabSi
School of Social Sciences
University of Trento
December 2, 2014

2. To propose Low Immersive Virtual Experiments (LIVE)
as tools for behavioral economics and cognitive
psychology where the laboratory approach shows
important limitations
To explore the potentiality of LIVE by providing some
examples of applications and some preliminary findings
of specifically designed laboratory studies

3. THE CONTEXT-FREE BIAS
HIGH AND LOW IMMERSIVE VIRTUAL EXPERIMENTS
HIVE AND LIVE APPLICATIONS
THE ALBO PROJECT
LIVE EXPERIMENTS – PRELIMINARY FINDINGS
CONCLUSIONS

4. a) experimental situations are not really presented, but
only described through language
b) choices and decisions are only evoked, not really
performed
c) there is lack in the normal cascade of events as
actions and reactions
d) temporal frame is compressed
e) irrelevance of the context

5. Many experimental economists seem to view their
enterprise as akin to silicon chip production. Subjects
are removed from all familiar contextual cues. Like the
characters 'thing one' and 'thing two' in Dr. Suess' Cat
in the Hat, buyers and sellers become 'persons A and
B', and all other information that might make the
situation familiar and provide a clue about how to
behave is removed.
George Loewenstein (1999)

6. 6

7. The context-free experiment is an elusive goal
A major tenet of cognitive psychology is how all
forms of thinking and problem solving are context-
dependent
The laboratory is not a socially neutral context, but
is itself an institution with its own formal or informal,
explicit or tacit, rules
Games in the laboratory are usually played without
labels but subjects inevitably apply their own labels

8. Lecture 2 Experiments and Virtual Reality
 One of the basic tenets of laboratory methodology is that
the use of non-professional subjects and monetary
incentives allows making subjects’ innate characteristics
largely irrelevant
 In some experiments, it is as if subjects take into the lab
the preferences applied to real choices and stick to them
with high probability
 These biases or inclinations tend to override the
incentive effect
 Labels may give subjects clues to become less and not
more rational

9. Labels increase experiments’ external validity with a
minimal sacrifice of internal validity
In particular, to test learning and cognitive models, it is
necessary to remind and to evoke contexts which may
activate emotions, association, similarities in the
laboratory
Labels can make subjects more or less rational in
relation to the evoked contexts.

10. Jones and Sugden Theory and Decision (2001)
Positive confirmation bias: tendency, when testing an
existing belief, to search for evidence which could confirm
that belief, rather than disconfirming it
The original Wason’s selection task was formulated in
highly abstract terms
Correct response was facilitated by adding thematic
content to the task, i.e. a cover story which accounts for the
statement and gives some point to the task.
Especially the drinkers story facilitates Bayesian rationality

11. Drinkers . Only people over the age of eighteen are allowed to
drink alcohol in a pub in Britain. A survey is carried out of 100
people in a large public house which identifies their age and
whether they are drinking alcohol or a soft drink. Each person’s
details are put down on a report card with the person’s age on
one side and their drinking behaviour on the other. A sample of
four report cards is selected. To find out if the four people in the
sample are obeying the law, look at whichever cards you wish to
test the statement:
[Standard statement] Every person in the sample who is
drinking alcohol is also over eighteen.
[Contraposed statement] Every person in the sample who is
under eighteen is also drinking a soft drink

12. Innocenti, Pazienza and Lattarulo Transport Policy (2013)
"Car Stickiness: Heuristics and Biases in Travel Choice“
Main finding: Subjects’ inclination to prefer cars over bus and
metro tends to override the incentives’ effect
Laboratory behavior depends more on prior learning outside
the laboratory than on gains in the laboratory
In the experiment, it is as if subjects take into the lab the
preferences applied to real choices between car, bus and
metro and stick to them with high probability
Labels give subjects clues to become less and not more
rational

13. Experimental literature on travel mode choice relies
on studies on route choice
Common object: coordination games, i.e. the payoff
each traveler can achieve is conditional on her/his
ability to diverge from or to converge with other
travelers’ choices
Selten et al. (2007), Ziegelmeyer et al. (2008),
Razzolini-Dutta (2009) provide laboratory evidence
that choices between route A and route B generate
Nash equilibria

14. Metro Car treatment - the expected total costs of car and
metro were equivalent if the share of car users was not
greater than 55%;
Bus 1.0 Car treatment - the expected total costs of car
and bus were equivalent if the share of car users was
not greater than 55%;
Bus 0.8 Car treatment - the expected total cost of the
bus was 20% lower than car expected total costs if the
share of car users was not greater than 55%.

15. Table 8 Proportion of car choices by treatment (each five periods)
Period Metro Bus 1.0 Bus 0.8
1 0.70 0.60 0.59
5 0.67 0.67 0.35
10 0.60 0.47 0.35
15 0.57 0.67 0.47
20 0.57 0.53 0.53
25 0.77 0.53 0.41
30 0.67 0.73 0.71
35 0.70 0.60 0.71
40 0.60 0.53 0.53
45 0.67 0.60 0.53
50 0.73 0.53 0.53
Total 0.68 0.58 0.50

16. Travel mode choice is significantly affected by heuristics and
biases that lead to robust deviations from rational behaviour
Travelers choose modes using behavioural rules that do not
necessarily involve the minimization of total travel costs
(marked preference for cars, confirm their first choice and
are not inclined to change travel mode)
In repeated travel mode choice, available information is not
properly processed, cognitive efforts are generally low and
rational calculation play a limited role
The habit of using cars should be assumed to be relatively
resistant, to the effect of economic incentives.
16

17. “WHY PEOPLE CHOOSE CARS, EVEN WHEN MASS TRANSIT WOULD SERVE THEM BETTER”
BY ERIC JAFFE (FEB 01, 2013)
WithheldName • 2 months ago
PRIVACY, CONTROL, COMFORT, FLEXIBILITY are very rational advantages to cars over buses and trains.
This is the dumbest study and dumbest article I've read all week.
ChicagoStreetcarRenaissance WithheldName • 2 months ago
I look at all those hundreds of thousands of people stuck in traffic together out on the highway every morning
and every evening, and here are some words that never come to mind: privacy, control, comfort, and
flexibility.
WithheldName ChicagoStreetcarRenaissance • 2 months ago
When I look at city buses rolling down the street, the words that come to mind are things "passengers who
have soiled themselves since their last change of clothing", "passengers who are mumbling to
themselves", "passengers who are swatting at invisible flies", "passengers who are asking others for
spare change", "passengers who are convicted felons", etc.
neroden • 3 months ago
FWIW, this is an Italian study and therefore only describes the biases of Italians, and in fact only of Sienna and
Florence residents. There's any number of reasons why Italians might have preconceived pro-car biases,
including a history of terrible urban transit. Particularly in Sienna and Florence. Try this study in London
(hell to drive, everyone takes the train) and see if you get the same results. I guarantee you won't. People
are using their prior biases.

18. One of the basic tenets of laboratory methodology in
experimental economics is that the use of non-
professional subjects and monetary incentives
allows making subjects’ innate characteristics
largely irrelevant (representative agent)
But laboratory research should highlight subjects’
preferences when applied to real choices
In these experiments labels give subjects clues that
make them immerse in a context

19. The use of presentations with virtual reality simulations
can convey this kind of context
“A Virtual Experiment is an experiment set in a controlled
lab-like environment, using typical lab or field participants,
that generates synthetic field cues using Virtual Reality
(VR) technology.”
Fiore et al. 2009
Virtual experiments can also occurred over the web -
Virtual Worlds experiments as a subset of Virtual
Experiments

20. High Immersive Virtual Experiments (HIVE) utilize
specialized displays such as CAVE, head-mounted
displays or augmented reality, which perceptually
surround subjects. The individual perceives himself to
be enveloped by, included in, and interacting with an
environment providing a continuous stream of stimuli.
Low Immersive Virtual Experiments (LIVE) use
computer screen based applications of virtual reality,
such as “ad hoc” virtual simulations or virtual worlds
(Second Life), to provide a weaker sense of presence.

23. 23

27. How is it possible to build virtual environments such that
people respond realistically to events within them?
Mel Slater (UCL and eventLAB Barcelona)
People tend to respond with some level of realism to the
virtual simulations and some level of presence occurs.
Ex. fire: another participant covered her eyes, and stepped
back away from the fire, some reported feeling heat, and
even smelling the smoke.
One way to think about the goal of presence in research is
that to be successful it should be able to discover what
would be necessary to make people actually and
physically run away from a virtual fire.

28.  Avatar is “a perceptible digital representation
whose behaviors reflect those executed
typically in real time, by a specific human
being” (Bailenson and Blascovich 2004)
 Digital avatars are uniquely powerful in
shaping how people think and behave
 The media stereotype of virtual worlds as
escapist fantasies distracts us from
understanding these emerging
communication platforms.

29. Exp.1 Subjects having more attractive avatars exhibited
increased self-disclosure and were more willing to
approach opposite-gendered strangers
 The attractiveness of their avatars impacted how intimate
participants were willing to be with a stranger
Exp. 2 Subjects having taller avatars were more willing to
make unfair splits in negotiation tasks than those who had
shorter avatars
Subjects with shorter avatars were more willing to accept
unfair offers than those who had taller avatars
 Thus, the height of their avatars impacted how confident
participants became.
Yee & Bailenson (2007)

30. Background
Playing prosocial video games leads to greater subsequent
prosocial behavior in the real world.
Thesis
In immersive virtual reality occupying an avatar with the
superhero ability to fly increases helping behavior.
Methods
(two-by-two design) participants were either given the power of
flight and were assigned one of two tasks, either to help find
a missing diabetic child in need of insulin or to tour a virtual
city. Before and after exposure, subjects were submitted
questionnaire and trials on prosocial behavior
Findings
The results indicate that having the “superpower” of flight leads
to greater helping behavior in the real world
Rosenberg, Baughman and Bailenson Plos ONE 2013
http://www.plosone.org/article/info:doi/10.1371/journal.pone.0055003

33. Patil et al. (2014)
 Moral dilemmas are hypothetical choices regarding typically dangerous
scenarios
 The possible disjunction between abstract moral judgments and actual
behaviour cannot be studied experimentally. People can only be asked
what they would do in the circumstances.
 VR can be used to create situations in which people are exposed to
specific circumstances where they have to take action
 The brakes of your car fail suddenly and on your path are five people
who will certainly be hit and killed. You can steer, but if you do another
pedestrian will find himself on your course. Just one. What do you do:
do you take action and kill one person or do you do nothing and cause
five people to die?
http://goo.gl/tYsUH7

34. Two treatments: virtual simulation vs. text format
Subjects' level of emotional arousal is collected by
recording electrodermal activity
In the virtual reality setting arousal is greater and subjects
respond in a utilitarian manner choosing to take action to
save the greatest number of people
In a hypothetical and therefore less emotionally charged
setting, the type of response was 'deontological': the moral
aspect of the action was assessed independently from the
practical consequences of the action

35. Fiore et al. (2009)
 Virtual Experiment to elicit subjective risk perception from
wild fires and the opportunity cost of public funds allocated
to prescribed burns
 Subjects experience four dynamic visual simulations of
specific wild fires, with varying weather and fuel conditions.
Simulations are selected to represent high and low risk of
fire damage
 Participants experience a sense of presence, a
psychological state of “being there” and take decisions
closer to real behavior with cognitive constraints

37. Main objectives www.progettoalbo.it
To demonstrate that the standard tools for detecting
work-related factors of risk and job-related stress
(interviews and checklists) are inadequate to
capture workers’ real perception
To argue that low immersive simulations of work
activities can nudge a better awareness of psycho-
social risks in workplaces

38. Individuals are generally myopic in assessing risks
and stressful situations (Tversky & Kahneman 1981,
Slovic 1987, 2001)
If individuals exhibit a positive attitude to a risky
prospect, they overvalue the associated benefits
while under-assess the associated costs. Similarly,
when their attitude is negative, the related costs are
systematically overvalued (Loewenstein et al. 2001)
Reactions to risks are triggered emotionally and not
determined by rational scrutiny (Damasio 1994)
38

39. Identification of business processes
Identification of working spaces
Definition of a number of interactive scenarios, within
each working space
Virtual Reality clips of the selected interactive
scenarios, with the aim of identifying the most common
misinterpretations and misbehaviours in terms of risk
and stress perception
39

40. Embedment of the virtual simulations in the Adventure
Game, that is an interactive gaming environment in which
workers examine, interpret and assess the various virtual
reality scenarios
The Gaming environment motivates people to face the
challenges and find solutions to the tasks that are to be
performed.
A Virtual Coach accompanies the user through the
entire Adventure and facilitates the process. The Coach
motivates, gives tips, and provides feedback.
40

46. The customised Adventure Games allow
exploring the emergence and dynamics of psycho-
social risks among employees
Employees, protected in their anonymity by the
Virtual Reality representations, are able to
formulate a critical judgement and a more
objective and contextualized assessment of the
situation represented in the simulation

47. LIVE Experiment 1 (with Cipresso and Venturini)
To test differences of physiological activations in
subjects watching real movies vs. virtual movies
LIVE Experiment 2 (with Faralla)
Individual risk attitude under social exposure in the
lab is modified by the presence of a virtual coach

48. Ob.: to verify the presence of differences in the
physiological and cognitive activations while
subjects watch video clips vs. virtual movies
Hp.: Exposure to video clips is associated with
greater physiological activations than exposure to
virtual videos.
 Ts.: By inducing less emotional involvement,
exposure to low immersive virtual environments may
trigger cognitive restructuring mechanisms of stress
perception and enhance the ability of removing
heuristics and biases commonly activated in real
life.

49. Between-subject experiment
10 undergraduate students
2 Conditions: Real clip of a job stress situation + Virtual
simulation of the same situation
Detection of physiological indices during three short
extracts;
Heart rate - Electromyography (EMG), i.e. electrical
impulses of face muscles at rest and during contraction -
Skin Conductance Level - Eye-tracking
Questionnairie:
Generalized Self-Efficacy - Locus of Control - Questions
on emotional states

51. CLIP 1
CLIP 2
CLIP 3
0
5
10
15
20
1 2 3 4 5 6 7 8 9 10 11 12
HR
0
1
2
3
4
1 2 3 4 5 6 7 8 9 10 11 12
EMG
0
10
20
30
1 2 3 4 5 6 7 8 9 10 11 12 13 14
HR
0
1
2
3
1 2 3 4 5 6 7 8 9 10 11 12 13 14
EMG
0
10
20
30
1 2 3 4 5 6 7 8
HR
0
2
4
1 2 3 4 5 6 7 8
EMG

52.  Participants experienced greater physiological
arousal during the exposure to real videos than to
virtual videos
 Findings can be ascribed to the type of visual
representation and not to individual differences in
the attribution of emotional content to the videos,
not detected by the self-report questionnaires
 Participants experienced a lower level of anxiety
due to the weaker sense of presence caused by low
immersive virtual environments

53. Risk-taking with virtual coach (Faralla et al. 2013)
choice between safe and risky option
two tasks: rare-loss and equiprobable-loss
exposure vs. no-exposure condition
observer vs. source role
Main finding: Observing others’ choices increases
observer’s risk propensity

54. Between-subject
52 undergraduate students
Two subjects randomly and anonymously paired
playing as source and observer
30 repeated choices (alternate):
15 rare (equiprobable) gains
15 rare (equiprobale) losses
Comparison between source and observer condition

55. Table 1 Experimental design
Rare Gain-Loss Condition Equiprobable Gain-Loss Condition
Problem 1.
Rare
Gain
Problem 2.
Rare
Loss
Problem 3.
Equiprobable
Gain
Problem 4.
Equiprobable
Loss
Safe
option
(S)
Gain 2 tokens
(EV = 2)
Lose 2 tokens
(EV = -2)
Gain 2 tokens
(EV = 2)
Lose 2 tokens
(EV = -2)
Risky
option
(R)
Gain 30 tokens
(prob. 5%)
or
Gain 1 token
(prob. 95%)
(EV = 2.5)
Lose 30 tokens
(prob. 5%)
or
Lose 1 token
(prob. 95%)
(EV = -2.5)
Gain 4 tokens
(prob. 50%)
or
Gain 1 token
(prob. 50%)
(EV = 2.45)
Lose 4 tokens
(prob. 50%)
Or
Lose 1 token
(prob. 50%)
(EV = -2.45)

57. Table 2. Choices by roles and option types
Sources Observers Total
Safe option 48.36 27.26 42.31
Risky option 51.64 62.74 57.69
Observers are more risk-takers than sources for both gains and
losses
Both roles are risk averse for losses and risk loving for gains
No significant difference between rare/equiprobable condition
Faster reaction time for sources

58. Table 2. Choices by roles and option types
Sources Observers Total
Safe option 44.75 42.18 43.31
Risky option 55.25 57.82 56.69
No significant differences in risk attitudes between
observers and sources
Both roles are confirmed as risk averse for losses and
risk loving for gains
No difference in reaction time across roles

59. Differences between observers and sources are
removed because the virtual coach make subjects’
choices less influenced by laboratory cues
Laboratory with virtual coach is perceived as an
intermediate safe environment
The Proteus Effect / deindividuation occurs in online
environments because users may adhere to
identities inferred from their avatars
The presence of virtual coach allows structuring
therapy like a protected environment

60. Main Approach to LIVE: to test if subjects’ behaviour in
VE conforms to results of conventional experimentation
“Virtual experiments might be more convenient than lab
experiments if he sees people behave in the same way
in real-world and virtual experiments” (List 2007)
“Determining where virtual world behavior mimics real
world behavior is quite important for methodological
reasons.” (Castronova 2008)
The difference between virtual and laboratory
experiments and between virtual and real behavior is an
asset rather than a problem for experimental economics.

61. Providing more context and less simple settings
No involuntary non-verbal communication (avatars)
Wider and heterogeneous subjects pool (virtual worlds)
Tool for detecting cognitive biases and for nudging
Simulations of intertemporal choice

62. Virtual situations project a game-like atmosphere
Proteus effect / deindividuation (also an asset)
It is difficult to establish subjects’ trust in computer
software
Subjects’ identity cannot be checked (virtual worlds)

63. Induced-value theory: use of a reward medium allows
to induce pre-specified characteristics in experimental
subjects and to make subjects’ innate characteristics
largely irrelevant (Smith 1992)
The central aspect of the VX methodology is a VR
environment that makes participants experience a
sense of presence, a psychological state of ‘‘being
there.’’ This sense depends on the degree of
involvement that participants experience as a
consequence of focusing attention on the set of
stimuli and activities generated by the VR simulation.
(Fiore et al. 2009)