risk and rationality: decision making in the brain

Risk and Rationality: Decision-Making in the Brain

SupervisorSupervisor: Prof. Giuseppe Sartori: Prof. Giuseppe Sartori

Ph.D. studentPh.D. student: David Polezzi: David Polezzi

Decisions

Economic Decisions:Economic Decisions: Mortgage with fixed or Mortgage with fixed or

floating rate?floating rate? Investing savings in Investing savings in

stocks or treasury bills?stocks or treasury bills?

Classical Economic Model

The normative Expected Value model posits that outcomes The normative Expected Value model posits that outcomes must be considered in the light of their probabilitiesmust be considered in the light of their probabilities

The EV associated to an option is the sum of each The EV associated to an option is the sum of each probability-weighted value. probability-weighted value.

The option with the greater EV should be chosen for a The option with the greater EV should be chosen for a rational decision.rational decision.

Homo Economicus: rational maximizer, unemotional and Homo Economicus: rational maximizer, unemotional and insensitive to the surrounding context. insensitive to the surrounding context.

(von Neumann J, Morgenstern von Neumann J, Morgenstern , 1944)

Prospect Theory

Objective outcome

Subjective Value

+ 5€

- 5€

Risk-prone

Objective outcome

Subjective Value

Risk-averse

+ 5€

- 5€

(Kahneman & Tversky, 1979)

Risk-Taking in animal models

Bumblebees were foraging in an artificial Bumblebees were foraging in an artificial field with:field with:

Certain flowers: Certain flowers: 3 3 μμl of nectar for sure. l of nectar for sure. Risky flowers: 6 Risky flowers: 6 μμl (50%) or nothing l (50%) or nothing

(50%).(50%).Bumblebees preferred certain flowers.Bumblebees preferred certain flowers.

Monkeys were required to choose Monkeys were required to choose between two options:between two options:

Certain circle: Certain circle: 30 ml of juice for sure. 30 ml of juice for sure. Risky circle: 50 Risky circle: 50 mml (50%) or 10 ml (50%).l (50%) or 10 ml (50%).Monkeys preferred risky options.Monkeys preferred risky options.

(Real, 1995; McCoy & Platt, 2005)

Feedback Related Negativity

It reflects an early assessment of decisions outcomes.

It peaks around 250 ms after stimulus onset (Hajcak et al., 2005).

It is larger after a negative feedback, such as a loss (Gehring et al., 2002).

Many studies reported a binary distinction in gains and losses

Also correlation with risk-taking has been reported (Gehring & Willoughby, 2002; Yeung & Sanfey, 2004).

FRN is generated by the dopaminergic activity of anterior cingulate cortex. (Gehring et al., 2002).

P300

The P300 has been reported to reflect decision making (Yeung & Sanfey, 2004; Ma et al., 2008)

The P300 amplitude varies with variables such as:

event probability (Nieuwenius et al., 2005).

motivational significance of stimuli (Dunchan-

Johnson & Donchin, 1977; Johnston et al., 1986; Keil et al., 2002). magnitude of feedback outcome (Yeung & Sanfey,

2004). The P300 is linked to the noradrenergic

system and locus coeruleus activity (Nieuwenius et al., 2005).

N500

A third component linked to risky decision making is the N500 (Yang et al., 2007).

N500 is generally larger for unpleasant stimuli (Carretié et al., 2001; Mack et al., 2005; Carretié et al., 2006)

It is It is thought to be generated by posterior cingulate cortex and visual association cortex (Carretié et al.,

2006).

Focusing on decisions under risk, the present Focusing on decisions under risk, the present study aims: study aims:

to clarify whether the binary evaluation of to clarify whether the binary evaluation of outcomes in terms of gains and losses is the outcomes in terms of gains and losses is the most distinctive feature when outcomes most distinctive feature when outcomes differ in predictability.differ in predictability.

to identify the corresponding neural to identify the corresponding neural correlates of outcome evaluation. correlates of outcome evaluation.

Predictability and Risk-Taking

Task

20 participants performed the gambling task, while ERPs were recorded.20 participants performed the gambling task, while ERPs were recorded. The task consisted in 120 trials.The task consisted in 120 trials.

Until subject responds

1000 ms

1500 ms

+30

Certain: 10€ (100%)Certain: 10€ (100%)Risky: -10€ (50%); 30€(50%)Risky: -10€ (50%); 30€(50%)

Results

Results

P200 larger for unpredictable outcomes (P200 larger for unpredictable outcomes (FF(2,38)=7.947, (2,38)=7.947, pp<.01; <.01; ηη22

partialpartial=.295). =.295).

We also found a significant association between P200 amplitude We also found a significant association between P200 amplitude and individual behaviour. and individual behaviour.

The higher the amplitude, the lower the number of risky The higher the amplitude, the lower the number of risky choices.choices.

––10€: 21.4%; 30€: 23.9%.10€: 21.4%; 30€: 23.9%. FRN showed larger amplitude for losses than for gains FRN showed larger amplitude for losses than for gains

((FF(2,38)=7.221, (2,38)=7.221, pp<.01; <.01; ηη22partialpartial=.275).=.275).

N500 amplitude was larger for unpredictable outcomes compared to N500 amplitude was larger for unpredictable outcomes compared to the predictable one (the predictable one (FF(2,38)=28.108, (2,38)=28.108, pp<.001; <.001; ηη22

partialpartial=.597).=.597).

Previous studies focused on choices between Previous studies focused on choices between options with options with zero EV zero EV (Gehring & Willoughby, 2002; Hajcak et al., 2006)(Gehring & Willoughby, 2002; Hajcak et al., 2006), or positive EV , or positive EV (Polezzi et al., (Polezzi et al.,

2008) 2008) or different EV or different EV (McCoy & Platt, 2005; Yeung & Sanfey, 2004).(McCoy & Platt, 2005; Yeung & Sanfey, 2004).

BBut there are no EEG studies which directly compare ut there are no EEG studies which directly compare decision-making across the different EV contexts.decision-making across the different EV contexts.

The first aim of the current study was to assess changes in The first aim of the current study was to assess changes in risk-taking across different EV contexts and its neuronal risk-taking across different EV contexts and its neuronal correlates. correlates.

and investigate and investigate individual differences in risk-taking (i.e. individual differences in risk-taking (i.e. risk prone vs. risk averse).risk prone vs. risk averse).

Context and Risk-Taking

Task


FRN

FRN amplitude was modulated by Valence (F(1,22)=7.51, p<.05 η2

partial=.26), with large FRN for losses than for gains.

Significant interaction of Group x Utility x Magnitude interaction (F(1,22)=8.55 p<.01 η2

partial=.28)

P300

Significant Group x Utility interaction (F(1,22)=14.09, p<.01 η2

partial=.39), with larger P300 associated with risk-prone condition.

P300 amplitudes reflect high motivation: It is higher for target stimuli (i.e. P300 amplitudes reflect high motivation: It is higher for target stimuli (i.e. gains),gains),(Dunchan-Johnson & Donchin, 1977).(Dunchan-Johnson & Donchin, 1977).It is higher for larger compared to It is higher for larger compared to smaller outcomes, smaller outcomes, (Yeung and Sanfey, 2004)(Yeung and Sanfey, 2004) and for emotionally significant and for emotionally significant stimuli stimuli (Johnston et al., 1986; Keil et al., 2002).(Johnston et al., 1986; Keil et al., 2002).

Source Analyses

Zero > PositiveLosses > Gains Source analyses yielded an involvement of posterior cingulate cortex, Source analyses yielded an involvement of posterior cingulate cortex,

as reported in in monkeys as reported in in monkeys (McCoy and Platt, 2005) (McCoy and Platt, 2005) or human with fMRI or human with fMRI (Li et al., (Li et al., 2008).2008).

The nature of decision-making fundamentally changes The nature of decision-making fundamentally changes within social contexts.within social contexts.

A paradigm that adequately represents rationality violation A paradigm that adequately represents rationality violation is ultimatum game.is ultimatum game.

A perfectly rational responder should accept any offer.A perfectly rational responder should accept any offer. In reality, players systematically do not conform to these In reality, players systematically do not conform to these

predictionspredictions..

Decisions in Social Context

Insula is involved in representing Insula is involved in representing negative emotional state negative emotional state (Mayberg et al., 1999(Mayberg et al., 1999)) and and pain pain (S(Schreckenberger et al., 2005chreckenberger et al., 2005).).

In UG is more activated in In UG is more activated in correspondence of unfair offers correspondence of unfair offers (Sanfey et al., (Sanfey et al., 2003).2003).

Knoch et al. (2006) suggested that the Knoch et al. (2006) suggested that the DLPFC inhibits selfish behaviour in DLPFC inhibits selfish behaviour in favour of social communication.favour of social communication.

Decisions in social contexts

In UG, ACC activity has been interpreted as In UG, ACC activity has been interpreted as reflecting the conflict associated with the reflecting the conflict associated with the rejection of unfair offersrejection of unfair offers (Sanfey et al., 2003(Sanfey et al., 2003). ).

Moretti et al., (2009) has showed that Moretti et al., (2009) has showed that behaviour of patients is due to impairment in behaviour of patients is due to impairment in representing abstract reward. representing abstract reward.

Decisions in social contexts

Task


YOU

ARE

3€

OFFERED

800 ms

800 ms

800 ms

Until the subject responds

Possible Offers: 1€, 3€, 5€Possible Offers: 1€, 3€, 5€

Results

RTs differed significantly between Type of Offer (RTs differed significantly between Type of Offer (FF(2,24)=7,679, (2,24)=7,679, pp<.01 <.01 ηη22partialpartial=.39)=.39)..

Acceptance rate (see Fig. 2) was significantly affected by Type of Offer (Acceptance rate (see Fig. 2) was significantly affected by Type of Offer (FF(2,24)=47.42, (2,24)=47.42, pp<.001 <.001 ηη22

partialpartial=.80).=.80).

Results

FRN amplitudes differed FRN amplitudes differed between the different Types of between the different Types of Offers (Offers (FF(2,24)=4.87, (2,24)=4.87, pp<.05 <.05 ηη22

partialpartial=.29). =.29). Higher FRN amplitudes was Higher FRN amplitudes was

associated with lower acceptance associated with lower acceptance rates (40.7%). rates (40.7%).

N350 amplitudes were N350 amplitudes were significantly different for the significantly different for the different Types of Offers different Types of Offers ((FF(2,24)=8.285, (2,24)=8.285, pp<.01 <.01 ηη22

partialpartial=.41). =.41). Higher N350 amplitudes was Higher N350 amplitudes was

associated with lower acceptance associated with lower acceptance rates (54.0%). rates (54.0%).

Results

Mid-value vs. fair contrast revealed activation of left superior temporal gyrus (Brodmann Area Mid-value vs. fair contrast revealed activation of left superior temporal gyrus (Brodmann Area 22) (22) (tt(24)=5.84, (24)=5.84, ppuncorrecteduncorrected<.001) and the left inferior parietal lobule (<.001) and the left inferior parietal lobule (tt(24)=5.16, (24)=5.16, ppuncorrecteduncorrected<.001).<.001).

Both showing higher activation for the mid-value compared to the fair offers.Both showing higher activation for the mid-value compared to the fair offers.

FRN amplitude reflects a distinction between fair offers on one side, FRN amplitude reflects a distinction between fair offers on one side, and mid-value and unfair offers on the other side, with smaller and mid-value and unfair offers on the other side, with smaller amplitudes for fair offers. amplitudes for fair offers.

Sanfey and colleagues (2003) who reported enhanced ACC activity Sanfey and colleagues (2003) who reported enhanced ACC activity for offers in the range of 10 % to 30 % of the total sum. for offers in the range of 10 % to 30 % of the total sum.

N350 is presumably generated by superior temporal gyrus, with N350 is presumably generated by superior temporal gyrus, with enhanced activity in the associated with the mid-value offers. enhanced activity in the associated with the mid-value offers.

The left inferior parietal lobule was also found to be more active for The left inferior parietal lobule was also found to be more active for mid-value compared to fair offers. mid-value compared to fair offers.

It is linked to perception of social cues, such as facial expression It is linked to perception of social cues, such as facial expression directed toward someone else directed toward someone else (Schilbach et al., 2005)(Schilbach et al., 2005) or taking a third-person or taking a third-person perspective perspective (Ruby & Decety, 2001).(Ruby & Decety, 2001).

Discussion

Knoch and colleagues (2006) see rejections as a social Knoch and colleagues (2006) see rejections as a social communication. communication.

In the model of Fehr et al. (2002), rejections of unfair offers are In the model of Fehr et al. (2002), rejections of unfair offers are considered an altruistic punishment, because human society cannot considered an altruistic punishment, because human society cannot tolerate not-cooperative behaviours.tolerate not-cooperative behaviours.

We asked to a group of people to perform Ultimatum Game as responders, playing with a fair partner or with an hyper-fair partner which sometimes offered more than he kept (for example, 70%).

If these offers are perceived as possible gains, they will activate brain areas traditionally connected with reward (such as orbitofrontal cortex). By contrast, if they are perceived as communication signals, they will presumably induce also activation of the areas linked to theory of mind.

Offers as Communication

Task

15 participants performed UG, while brain activity was recorded with fMRI.15 participants performed UG, while brain activity was recorded with fMRI.

+

This is Boris Boris gets 7€

You get 3€

Accept or Reject?

Boris gets 0€

You get 0€

6 sec

12 sec

6 sec

6 sec

Possible Offers: 1€, 3€, 5€, 7€Possible Offers: 1€, 3€, 5€, 7€

Results

Human Partner- UnFair > Fair

T p x,y,z {mm}

--------------------------------------------------------------------------------

3.89 0.000 34 -30 16 Insula

Human Partner- Fair>UnFair

T p x,y,z {mm}

--------------------------------------------------------------------------------

5.02 0.000 -16 32 26 Anterior Cingulate Cortex

4.79 0.000 38 36 20 Middle Frontal Gyrus

4.48 0.000 -40 -36 -18 ParaHippocampal Gyrus

4.06 0.000 62 -18 -10 Middle Temporal Gyrus

3.69 0.000 -10 -24 52 Medial Frontal Gyrus

Results

Human Partner- HyperFair >FairHuman Partner- HyperFair >Fair

TT pp x,y,z {mm}x,y,z {mm}

----------------------------------------------------------------------------------------------------------------------------------------------------------------

4.234.23 0.0000.000 -20 14 8-20 14 8 PutamenPutamen

3.993.99 0.0000.000 -52 12 -4-52 12 -4 Superior Temporal Superior Temporal GyrusGyrus

3.893.89 0.0000.000 -52 -62 28-52 -62 28 Superior Temporal Superior Temporal GyrusGyrus

3.543.54 0.0000.000 20 38 3220 38 32 Medial Frontal Medial Frontal GyrusGyrus

No voxels survived level of significance in Computer Partner- HyperFair >Fair.

Hyper-Fair offers can selectively activates superior temporal gyrus, Hyper-Fair offers can selectively activates superior temporal gyrus, which is known to be involved in theory of mind or mentalizing which is known to be involved in theory of mind or mentalizing (Brunet et al., 2000; Fletcher et al., 1995).(Brunet et al., 2000; Fletcher et al., 1995).

The enhanced superior temporal gyrus activity associated with hyper-The enhanced superior temporal gyrus activity associated with hyper-fair offers might mirror attempts of the responder to understand the fair offers might mirror attempts of the responder to understand the proposer’s strategy (Paulus et al., 2005).proposer’s strategy (Paulus et al., 2005).

In addition, a fMRI study (Rilling et al., 2004) reported higher activations in the superior temporal gyrus when subjects thought they played against a human partner compared to a condition when they thought they played against a computer.

Hyper-fair offers not only activates area traditionally involved with reward, but also those connected with theory of mind, providing converging evidences that offers are perceived as signals from the other player.

Discussion

Homo Economicus: rational maximizer, Homo Economicus: rational maximizer, unemotional and insensitive to the unemotional and insensitive to the surrounding context. surrounding context.

People are not always rational and sensitive People are not always rational and sensitive to contexts in which they decide.to contexts in which they decide.

Neuroscience method can provide Neuroscience method can provide information about cognitive processes information about cognitive processes underlying economic decision-making.underlying economic decision-making.

General Conclusions

Polezzi D., Civai C., Diabolico Perseverare: Risposta all'articolo-bersaglio "NeuroMania", Giornale Italiano di Psicologia.

Polezzi D., Rigoni D., Lotto L., Rumiati R., Sartori G., Inhibition and Pleasure: Economical Risk-Taking in the Brain, (submitted).

Polezzi D., Rumiati R., Sartori G., Daum I., Brain correlates of Risky Decision Making, (submitted)

Polezzi D., Daum I., Rubaltelli E., Lotto L., Civai C., Sartori G., Rumiati R., 2008, Mentalizing in economic decision making, Behavioural Brain Research, 190, 218-223.

Polezzi D., Lotto L., Daum I., Sartori G., Rumiati R., 2008, Predicting outcomes of decisions in the brain, Behavioural Brain Research, 187, 116-122.

Priori A., Mameli F., Cogiamanian F., Marceglia S., Tiriticco M., Mrakic-Sposta S., Ferrucci R., Zago S., Polezzi D., Sartori G., 2008, Lie-Specific Involvement of Dorsolateral Prefrontal Cortex in Deception, Cerebral Cortex, 18, 451-455.

Pietroni D. e Polezzi, D. (2007) La comunicazione efficace in negoziazione. In D.Diamantini e N. Olivero (a cura di) Clienti, controparti e amici. Milano, Guerini e Associati.

Sartori G., Mameli F., Polezzi D., Lombardi L., 2006, An ERP study of low and high semantic relevance features, Brain Research Bulletin, 69, 182-186.

Sartori G., Polezzi D., Mameli F. Lombardi L., 2005, Feature type effect in semantic memory: An event related potentials study, NeuroscienceLetters, 390, 139-144.

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