Risk and Rationality: Decision Making in the Brain


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Risk and Rationality: Decision Making in the Brain

  1. 1. Risk and Rationality: Decision-Making in the Brain Supervisor : Prof. Giuseppe Sartori Ph.D. student : David Polezzi
  2. 2. Decisions <ul><li>Economic Decisions: </li></ul><ul><li>Mortgage with fixed or floating rate? </li></ul><ul><li>Investing savings in stocks or treasury bills? </li></ul>
  3. 3. Classical Economic Model <ul><li>The normative Expected Value model posits that outcomes must be considered in the light of their probabilities </li></ul><ul><li>The EV associated to an option is the sum of each probability-weighted value. </li></ul><ul><li>The option with the greater EV should be chosen for a rational decision. </li></ul><ul><li>Homo Economicus: rational maximizer, unemotional and insensitive to the surrounding context. </li></ul>( von Neumann J, Morgenstern , 1944)
  4. 4. Prospect Theory (Kahneman & Tversky, 1979) Objective outcome Subjective Value + 5€ - 5€ Risk-prone Objective outcome Subjective Value Risk-averse + 5€ - 5€
  5. 5. Risk-Taking in animal models <ul><li>Bumblebees were foraging in an artificial field with: </li></ul><ul><li>Certain flowers: 3 μ l of nectar for sure. </li></ul><ul><li>Risky flowers: 6 μ l (50%) or nothing (50%). </li></ul><ul><li>Bumblebees preferred certain flowers. </li></ul><ul><li>Monkeys were required to choose between two options: </li></ul><ul><li>Certain circle: 30 ml of juice for sure. </li></ul><ul><li>Risky circle: 50 m l (50%) or 10 ml (50%). </li></ul><ul><li>Monkeys preferred risky options. </li></ul>(Real, 1995; McCoy & Platt, 2005)
  6. 6. Feedback Related Negativity <ul><li>It reflects an early assessment of decisions outcomes. </li></ul><ul><li>It peaks around 250 ms after stimulus onset (Hajcak et al., 2005). </li></ul><ul><li>It is larger after a negative feedback, such as a loss (Gehring et al., 2002). </li></ul><ul><li>Many studies reported a binary distinction in gains and losses </li></ul><ul><li>Also correlation with risk-taking has been reported (Gehring & Willoughby, 2002; Yeung & Sanfey, 2004). </li></ul><ul><li>FRN is generated by the dopaminergic activity of anterior cingulate cortex. (Gehring et al., 2002). </li></ul>
  7. 7. P300 <ul><li>The P300 has been reported to reflect decision making (Yeung & Sanfey, 2004; Ma et al., 2008 ) </li></ul><ul><li>The P300 amplitude varies with variables such as: </li></ul><ul><li>event probability (Nieuwenius et al., 2005). </li></ul><ul><li>motivational significance of stimuli (Dunchan-Johnson & Donchin, 1977 ; Johnston et al., 1986; Keil et al., 2002). </li></ul><ul><li>magnitude of feedback outcome (Yeung & Sanfey, 2004). </li></ul><ul><li>The P300 is linked to the noradrenergic system and locus coeruleus activity (Nieuwenius et al., 2005). </li></ul>
  8. 8. N500 <ul><li>A third component linked to risky decision making is the N500 ( Yang et al., 2007 ). </li></ul><ul><li>N500 is generally larger for unpleasant stimuli ( Carretié et al., 2001; Mack et al., 2005; Carretié et al., 2006) </li></ul><ul><li>It is thought to be generated by posterior cingulate cortex and visual association cortex (Carretié et al., 2006 ). </li></ul>
  9. 9. <ul><li>Focusing on decisions under risk, the present study aims: </li></ul><ul><li>to clarify whether the binary evaluation of outcomes in terms of gains and losses is the most distinctive feature when outcomes differ in predictability. </li></ul><ul><li>to identify the corresponding neural correlates of outcome evaluation. </li></ul>Predictability and Risk-Taking
  10. 10. <ul><li>20 participants performed the gambling task, while ERPs were recorded. </li></ul><ul><li>The task consisted in 120 trials. </li></ul>Task Until subject responds 1000 ms 1500 ms +30 Certain: 10€ (100%) Risky: -10€ (50%); 30€(50%)
  11. 11. Results
  12. 12. <ul><li>P200 larger for unpredictable outcomes ( F (2,38)=7.947, p <.01; η 2 partial =.295). </li></ul><ul><li>We also found a significant association between P200 amplitude and individual behaviour. </li></ul><ul><li>The higher the amplitude, the lower the number of risky choices. </li></ul><ul><li>– 10€: 21.4%; 30€: 23.9%. </li></ul><ul><li>FRN showed larger amplitude for losses than for gains ( F (2,38)=7.221, p <.01; η 2 partial =.275). </li></ul><ul><li>N500 amplitude was larger for unpredictable outcomes compared to the predictable one ( F (2,38)=28.108, p <.001; η 2 partial =.597). </li></ul>Results
  13. 13. <ul><li>Previous studies focused on choices between options with zero EV (Gehring & Willoughby, 2002; Hajcak et al., 2006) , or positive EV (Polezzi et al., 2008) or different EV (McCoy & Platt, 2005; Yeung & Sanfey, 2004). </li></ul><ul><li>B ut there are no EEG studies which directly compare decision-making across the different EV contexts. </li></ul><ul><li>The first aim of the current study was to assess changes in risk-taking across different EV contexts and its neuronal correlates. </li></ul><ul><li>and investigate individual differences in risk-taking (i.e. risk prone vs. risk averse). </li></ul>Context and Risk-Taking
  14. 14. <ul><li>24 participants performed the gambling task, while ERPs were recorded. </li></ul><ul><li>The task consisted in 240 trials. </li></ul>Task
  15. 15. FRN <ul><li>FRN amplitude was modulated by Valence ( F (1,22)=7.51, p <.05 η 2 partial =.26), with large FRN for losses than for gains. </li></ul><ul><li>S ignificant interaction of Group x Utility x Magnitude interaction ( F (1,22)=8.55 p <.01 η 2 partial =.28) </li></ul>
  16. 16. P300 <ul><li>Significant Group x Utility interaction ( F (1,22)=14.09, p <.01 η 2 partial =.39), with larger P300 associated with risk-prone condition. </li></ul>P300 amplitudes reflect high motivation: It is higher for target stimuli (i.e. gains), (Dunchan-Johnson & Donchin, 1977). It is higher for larger compared to smaller outcomes, (Yeung and Sanfey, 2004) and for emotionally significant stimuli (Johnston et al., 1986; Keil et al., 2002).
  17. 17. Source Analyses Zero > Positive Losses > Gains <ul><li>Source analyses yielded an involvement of posterior cingulate cortex, as reported in in monkeys (McCoy and Platt, 2005) or human with fMRI (Li et al., 2008). </li></ul>
  18. 18. <ul><li>The nature of decision-making fundamentally changes within social contexts. </li></ul><ul><li>A paradigm that adequately represents rationality violation is ultimatum game. </li></ul><ul><li>A perfectly rational responder should accept any offer. </li></ul><ul><li>In reality, players systematically do not conform to these predictions . </li></ul>Decisions in Social Context
  19. 19. <ul><li>Insula is involved in representing negative emotional state (Mayberg et al., 1999 ) and pain (S chreckenberger et al., 2005 ). </li></ul><ul><li>In UG is more activated in correspondence of unfair offers (Sanfey et al., 2003). </li></ul><ul><li>Knoch et al. (2006) suggested that the DLPFC inhibits selfish behaviour in favour of social communication. </li></ul>Decisions in social contexts
  20. 20. <ul><li>In UG, ACC activity has been interpreted as reflecting the conflict associated with the rejection of unfair offers (Sanfey et al., 2003 ). </li></ul><ul><li>Moretti et al., (2009) has showed that behaviour of patients is due to impairment in representing abstract reward. </li></ul>Decisions in social contexts
  21. 21. <ul><li>13 participants performed the gambling task, while ERPs were recorded. </li></ul><ul><li>The task consisted in 200 trials. </li></ul>Task YOU ARE 3€ OFFERED 800 ms 800 ms 800 ms Until the subject responds Possible Offers: 1€, 3€, 5€
  22. 22. Results <ul><li>RTs differed significantly between Type of Offer ( F (2,24)=7,679, p <.01 η 2 partial =.39) . </li></ul><ul><li>Acceptance rate (see Fig. 2) was significantly affected by Type of Offer ( F (2,24)=47.42, p <.001 η 2 partial =.80). </li></ul>
  23. 23. Results <ul><li>FRN amplitudes differed between the different Types of Offers ( F (2,24)=4.87, p <.05 η 2 partial =.29). </li></ul><ul><li>Higher FRN amplitudes was associated with lower acceptance rates (40.7%). </li></ul><ul><li>N350 amplitudes were significantly different for the different Types of Offers ( F (2,24)=8.285, p <.01 η 2 partial =.41). </li></ul><ul><li>Higher N350 amplitudes was associated with lower acceptance rates (54.0%). </li></ul>
  24. 24. Results <ul><li>Mid-value vs. fair contrast revealed activation of left superior temporal gyrus (Brodmann Area 22) ( t (24)=5.84, p uncorrected <.001) and the left inferior parietal lobule ( t (24)=5.16, p uncorrected <.001). </li></ul><ul><li>Both showing higher activation for the mid-value compared to the fair offers. </li></ul>
  25. 25. <ul><li>FRN amplitude reflects a distinction between fair offers on one side, and mid-value and unfair offers on the other side, with smaller amplitudes for fair offers. </li></ul><ul><li>Sanfey and colleagues (2003) who reported enhanced ACC activity for offers in the range of 10 % to 30 % of the total sum. </li></ul><ul><li>N350 is presumably generated by superior temporal gyrus, with enhanced activity in the associated with the mid-value offers. </li></ul><ul><li>The left inferior parietal lobule was also found to be more active for mid-value compared to fair offers. </li></ul><ul><li>It is linked to perception of social cues, such as facial expression directed toward someone else (Schilbach et al., 2005) or taking a third-person perspective (Ruby & Decety, 2001). </li></ul>Discussion
  26. 26. <ul><li>Knoch and colleagues (2006) see rejections as a social communication. </li></ul><ul><li>In the model of Fehr et al. (2002), rejections of unfair offers are considered an altruistic punishment, because human society cannot tolerate not-cooperative behaviours. </li></ul><ul><li>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%). </li></ul><ul><li>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. </li></ul>Offers as Communication
  27. 27. <ul><li>15 participants performed UG, while brain activity was recorded with fMRI. </li></ul>Task + 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€
  28. 28. 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
  29. 29. Results Human Partner- HyperFair >Fair T p x,y,z {mm} -------------------------------------------------------------------------------- 4.23 0.000 -20 14 8 Putamen 3.99 0.000 -52 12 -4 Superior Temporal Gyrus 3.89 0.000 -52 -62 28 Superior Temporal Gyrus 3.54 0.000 20 38 32 Medial Frontal Gyrus No voxels survived level of significance in Computer Partner- HyperFair >Fair.
  30. 30. <ul><li>Hyper-Fair offers can selectively activates superior temporal gyrus, which is known to be involved in theory of mind or mentalizing (Brunet et al., 2000; Fletcher et al., 1995). </li></ul><ul><li>The enhanced superior temporal gyrus activity associated with hyper-fair offers might mirror attempts of the responder to understand the proposer’s strategy (Paulus et al., 2005). </li></ul><ul><li>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. </li></ul><ul><li>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. </li></ul>Discussion
  31. 31. <ul><li>Homo Economicus: rational maximizer, unemotional and insensitive to the surrounding context. </li></ul><ul><li>People are not always rational and sensitive to contexts in which they decide. </li></ul><ul><li>Neuroscience method can provide information about cognitive processes underlying economic decision-making. </li></ul>General Conclusions
  32. 32. <ul><li>Polezzi D.,  Civai C., Diabolico Perseverare : Risposta all'articolo-bersaglio &quot;NeuroMania&quot;, Giornale Italiano di Psicologia. </li></ul><ul><li>Polezzi D., Rigoni D., Lotto L., Rumiati R., Sartori G., Inhibition and Pleasure: Economical Risk-Taking in the Brain , ( submitted ). </li></ul><ul><li>Polezzi D., Rumiati R., Sartori G., Daum I., Brain correlates of Risky Decision Making , ( submitted ) </li></ul><ul><li>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. </li></ul><ul><li>Polezzi D., Lotto L., Daum I., Sartori G., Rumiati R., 2008, Predicting outcomes of decisions in the brain, Behavioural Brain Research, 187, 116-122. </li></ul><ul><li>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. </li></ul><ul><li>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. </li></ul><ul><li>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. </li></ul><ul><li>Sartori G., Polezzi D., Mameli F. Lombardi L., 2005, Feature type effect in semantic memory: An event related potentials study , NeuroscienceLetters, 390, 139-144. </li></ul>Publications