The growth of neuroeconomics as an academic discipline has been inextricably tied to the development of research methods to study brain function and its relationship to behavior. The aim of this chapter is to give an overview of these methods at a cursory level, while at the same time referring the reader to excellent textbooks and primary research articles for more in-depth information. The chapter focuses primarily on the conceptual issues involved in choosing a research technique and evaluating results using different techniques. As such, it is primarily intended for those who are new to neuroeconomics and cognitive neuroscience and who seek guidance on how to evaluate the strengths and limitations of published work. Accordingly, each technique is introduced in conjunction with specific examples drawn from recent neuroeconomic studies.
Bulimia nervosa (BN) is a growing health concern and its consequences are especially serious given the compulsive nature of the disorder. However, little is known about the mechanisms underlying the persistent nature of BN. Using data from the NHLBI Growth and Health Study and
instrumental variable techniques, we document that unobserved heterogeneity plays a role in the persistence of BN, but up to two-thirds of it is due to state dependence. Our findings suggest that the timing of policy is crucial: Preventive educational programs should be coupled with more intense (rehabilitation) treatment at the early stages of the BN behaviors.
There are two regularities we have learned from experimental studies of choice under risk. The
first is that the majority of people weigh objective probabilities nonlinearly. The second regularity,
although less commonly acknowledged, is that there is a large amount of heterogeneity in how
people distort probabilities. Despite this, little effort has been made to identify the source of
heterogeneity. We explore the possibility that personality type is linked to probability distortions.
Using validated psychological questionnaires, we clustered participants into distinct personality types: motivated, impulsive, and affective. We found that the motivated participants viewed gambling as more attractive, whereas the impulsive participants were the most capable of discriminating non-‐‑extreme probabilities. Our results suggest that the observed heterogeneity in probability distortions may be explained by personality profiles, which can be elicited though standard psychological questionnaires.
Humans and animals value the opportunity to choose by preferring alternatives that offer more rather than fewer choices. This preference for choice may arise not only from an increased probability of obtaining preferred outcomes but also from the freedom it provides. We used human neuroimaging to investigate the neural basis of the preference for choice as well as for the items that could be chosen. In each trial, participants chose between two options, a monetary amount option and a "choice option." The latter consisted of a number that corresponded to the number of everyday items participants would subsequently be able to choose from. We found that the opportunity to choose from a larger number of items was equivalent to greater amounts of money, indicating that participants valued having more choice; moreover, participants varied in the degree to which they valued having the opportunity to choose, with some valuing it more than the increased probability of obtaining preferred items. Neural activations in the mid striatum increased with the value of the opportunity to choose. The same region also coded the value of the items. Conversely, activation in the dorsolateral striatum was not related to the value of the items but was elevated when participants were offered more choices, particularly in those participants who overvalued the opportunity to choose. These data suggest a functional dissociation of value representations within the striatum, with general representations in mid striatum and specific representations of the value of freedom provided by the opportunity to choose in dorsolateral striatum.
In this chapter, we describe how risk and ambiguity impact the value of choice options, how this impact can be modelled formally and how it is implemented in the brain. In particular, we give an overview of two distinct ways of how risky choice options can be decomposed – either into outcomes and probabilities as proposed in economics or into statistical moments of the probability distribution like mean, variance, or skewness, as proposed in finance theory. The components of either approach appear to be represented in common and, at least to some extent, in separate brain regions, which include the dopaminergic midbrain, striatum and the orbitofrontal cortex. Activity in different (prefrontal and striatal) brain regions also supports the distinction between decisions from experience, when knowledge about risk is learned through trial and error versus decisions from description, when it is described symbolically. The fact that the principal components of formal models from economics and finance theory and their behavioral versions that provide better descriptive fit are represented in the brain provides converging support for these models.
In order to choose advantageously in many circumstances, the values of choice alternatives have to be learned from experience. We provide an introduction to theoretical and experimental work on reinforcement learning, that is, trial-and-error learning to obtain rewards or avoid punishments. We introduce one version, the temporal-difference learning model, and review evidence that its predictions relate to the firing properties of midbrain dopamine neurons and to activity recorded with functional neuroimaging in humans. We also present evidence that this computational and neurophysiological mechanism affects human and animal behavior in decision and conditioning tasks.
In this chapter, we present a set of concepts and tools for defining and examining strategic choice that are drawn from behavioral economics and discuss how they can be applied to and tested with neuroscience techniques. The standard language for studying strategic choice in economics is game theory. Game theory provides concrete mathematical formulas for linking strategic actions to rewarding payoffs. After outlining the four components necessary to make predictions about strategic social behavior, we present recent evidence that the computations predicted by game theory in specific strategic choice contexts are reflected in the brain. In addition, we discuss links between strategic decision making and the psychological concept of theory of mind. We conclude by suggesting that developing mathematical models of social and strategic actions may aid in the understanding of how the brain implements typical choice behavior as well as categorizing dysfunctions that lead to aberrant behavior in psychiatric disorders.
All known human societies have maintained social order by enforcing compliance with social norms. The biological mechanisms underlying norm compliance are, however, hardly understood. We show that the right lateral prefrontal cortex (rLPFC) is involved in both voluntary and sanction-induced norm compliance. Both types of compliance could be changed by varying the neural excitability of this brain region with transcranial direct current stimulation, but they were affected in opposite ways, suggesting that the stimulated region plays a fundamentally different role in voluntary and sanction-based compliance. Brain stimulation had a particularly strong effect on compliance in the context of socially constituted sanctions, whereas it left beliefs about what the norm prescribes and about subjectively expected sanctions unaffected. Our findings suggest that rLPFC activity is a key biological prerequisite for an evolutionarily and socially important aspect of human behavior.
