Using a simple but general two-‐‑stage framework, this paper identifies the circumstances under
which increasing competition leads to more cost-‐‑reducing investments. The framework can, for
instance, capture increasing substitutability for different types of oligopoly models or changes from Cournot to Bertrand competition. The paper identifies four transmission mechanisms by which competition affects investment. For a firm with lower initial marginal costs (higher efficiency), a positive effect of competition on investment is more likely. Positive spillovers support
a negative effect of competition on investment. The relation between competition and investment is
not affected in an unambiguous way by the level of pre-‐‑existing competition.
Primate electrophysiological and lesion studies indicate a prominent role of the left dorsal premotor cortex (PMd) in action selection based on learned sensorimotor associations. Here we applied transcranial magnetic stimulation (TMS) to human left PMd at low or high intensity while right-handed individuals performed externally paced sequential key presses with their left hand. Movements were cued by abstract visual stimuli, and subjects either freely selected a key press or responded according to a prelearned visuomotor mapping rule. Continuous arterial spin labeling was interleaved with TMS to directly assess how stimulation of left PMd modulates task-related brain activity depending on the mode of movement selection. Relative to passive viewing, both tasks activated a frontoparietal motor network. Compared with low-intensity TMS, high-intensity TMS of left PMd was associated with an increase in activity in medial and right premotor areas without affecting task performance. Critically, this increase in task-related activity was only present when movement selection relied on arbitrary visuomotor associations but not during freely selected movements. Psychophysiological interaction analysis revealed a context-specific increase in functional coupling between the stimulated left PMd and remote right-hemispheric and mesial motor regions that was only present during arbitrary visuomotor mapping. Our TMS perturbation approach yielded causal evidence that the left PMd is implicated in mapping external cues onto the appropriate movement in humans. Furthermore, the data suggest that the left PMd may transiently form a functional network together with right-hemispheric and mesial motor regions to sustain visuomotor mapping performed with the left nondominant hand.
Decision-making research has thoroughly investigated how people choose from a set of externally provided options. However, in ill-structured real-world environments, possible options for action are not defined by the situation but have to be generated by the agent. Here, we apply behavioral analysis (Study 1) and functional magnetic resonance imaging (Study 2) to investigate option generation and subsequent choice. For this purpose, we employ a new experimental task that requires participants to generate options for simple real-world scenarios and to subsequently decide among the generated options. Correlational analysis with a cognitive test battery suggests that retrieval of options from long-term memory is a relevant process during option generation. The results of the fMRI study demonstrate that option generation in simple real-world scenarios recruits the anterior prefrontal cortex. Furthermore, we show that choice behavior and its neural correlates differ between self-generated and externally provided options. Specifically, choice between self-generated options is associated with stronger recruitment of the dorsal anterior cingulate cortex. This impact of option generation on subsequent choice underlines the need for an expanded model of decision making to accommodate choice between self-generated options.
Humans can resist temptations by exerting willpower, the effortful inhibition of impulses. But willpower can be disrupted by emotions and depleted over time. Luckily, humans can deploy alternative self-control strategies like precommitment, the voluntary restriction of access to temptations. Here, we examined the neural mechanisms of willpower and precommitment using fMRI. Behaviorally, precommitment facilitated choices for large delayed rewards, relative to willpower, especially in more impulsive individuals. While willpower was associated with activation in dorsolateral prefrontal cortex (DLPFC), posterior parietal cortex (PPC), and inferior frontal gyrus, precommitment engaged lateral frontopolar cortex (LFPC). During precommitment, LFPC showed increased functional connectivity with DLPFC and PPC, especially in more impulsive individuals, and the relationship between impulsivity and LFPC connectivity was mediated by value-related activation in ventromedial PFC. Our findings support a hierarchical model of self-control in which LFPC orchestrates precommitment by controlling action plans in more caudal prefrontal regions as a function of expected value.
Risk is an important factor impacting financial decisions. Risk can be processed objectively, e.g. as variance across possible outcomes of a choice option or subjectively, e.g. as value of that variance to a given individual. The aim of the present study was to test the potential of functional near-infrared spectroscopy (fNIRS) in assessing these different ways of processing risk while subjects decided between either high or low risk financial options or a safe (risk-free) option. For comparison we simultaneously measured electrodermal activity (EDA), a well-established method in decision-making research and a core measure of affective processes. FNIRS showed that lateral prefrontal cortex responses to high risk were enhanced relative to low risk only in risk-seeking individuals but reduced relative to low risk in risk-averse individuals. This is in-line with individual-specific risk processing reflecting the subjective value of risk. By contrast, EDA showed enhanced responses to high risk, independent of individual risk attitude, in-line with the notion of objective risk processing. The dissociation between the two measures arose even though they overall were equally sensitive to detect individual risk-related differences and even though there was an increased, risk attitude-independent, temporal coherence between the two measures during high-risk conditions. Our results suggest that hemodynamic responses in lateral prefrontal cortex as measured by fNIRS reflect the subjective value of risk, whereas EDA may index the objective amount of risk people are presented with. The findings suggest that fNIRS could be a useful method for studying risk behavior in financial decisions.
When humans and other animals make decisions in their natural environments prospective rewards have to be weighed against costs. It is well established that increasing costs lead to devaluation or discounting of reward. While our knowledge about discount functions for time and probability costs is quite advanced, little is known about how physical effort discounts reward. In the present study we compared three different models in a binary choice task in which human participants had to squeeze a handgrip to earn monetary rewards: a linear, a hyperbolic, and a parabolic model. On the group as well as the individual level, the concave parabolic model explained most variance of the choice data, thus contrasting with the typical hyperbolic discounting of reward value by delay. Research on effort discounting is not only important to basic science but also holds the potential to quantify aberrant motivational states in neuropsychiatric disorders.
Perception is an active inferential process in which prior knowledge is combined with sensory input, the result of which determines the contents of awareness. Accordingly, previous experience is known to help the brain "decide" what to perceive. However, a critical aspect that has not been addressed is that previous experience can exert 2 opposing effects on perception: An attractive effect, sensitizing the brain to perceive the same again (hysteresis), or a repulsive effect, making it more likely to perceive something else (adaptation). We used functional magnetic resonance imaging and modeling to elucidate how the brain entertains these 2 opposing processes, and what determines the direction of such experience-dependent perceptual effects. We found that although affecting our perception concurrently, hysteresis and adaptation map into distinct cortical networks: a widespread network of higher-order visual and fronto-parietal areas was involved in perceptual stabilization, while adaptation was confined to early visual areas. This areal and hierarchical segregation may explain how the brain maintains the balance between exploiting redundancies and staying sensitive to new information. We provide a Bayesian model that accounts for the coexistence of hysteresis and adaptation by separating their causes into 2 distinct terms: Hysteresis alters the prior, whereas adaptation changes the sensory evidence (the likelihood function).
Voluntary selective attention can prioritize different features in a visual scene. The frontal eye-fields (FEF) are one potential source of such feature-specific top-down signals, but causal evidence for influences on visual cortex (as was shown for "spatial" attention) has remained elusive. Here, we show that transcranial magnetic stimulation (TMS) applied to right FEF increased the blood oxygen level-dependent (BOLD) signals in visual areas processing "target feature" but not in "distracter feature"-processing regions. TMS-induced BOLD signals increase in motion-responsive visual cortex (MT+) when motion was attended in a display with moving dots superimposed on face stimuli, but in face-responsive fusiform area (FFA) when faces were attended to. These TMS effects on BOLD signal in both regions were negatively related to performance (on the motion task), supporting the behavioral relevance of this pathway. Our findings provide new causal evidence for the human FEF in the control of nonspatial "feature"-based attention, mediated by dynamic influences on feature-specific visual cortex that vary with the currently attended property.
Humans tend to use the self as a reference point to perceive the world and gain information about other people's mental states. However, applying such a self-referential projection mechanism in situations where it is inappropriate can result in egocentrically biased judgments. To assess egocentricity bias in the emotional domain (EEB), we developed a novel visuo-tactile paradigm assessing the degree to which empathic judgments are biased by one's own emotions if they are incongruent to those of the person we empathize with. A first behavioral experiment confirmed the existence of such EEB, and two independent fMRI experiments revealed that overcoming biased empathic judgments is associated with increased activation in the right supramarginal gyrus (rSMG), in a location distinct from activations in right temporoparietal junction reported in previous social cognition studies. Using temporary disruption of rSMG with repetitive transcranial magnetic stimulation resulted in a substantial increase of EEB, and so did reducing visuo-tactile stimulation time as shown in an additional behavioral experiment. Our findings provide converging evidence from multiple methods and experiments that rSMG is crucial for overcoming emotional egocentricity. Effective connectivity analyses suggest that this may be achieved by early perceptual regulation processes disambiguating proprioceptive first-person information (touch) from exteroceptive third-person information (vision) during incongruency between self- and other-related affective states. Our study extends previous models of social cognition. It shows that although shared neural networks may underlie emotional understanding in some situations, an additional mechanism subserved by rSMG is needed to avoid biased social judgments in other situations.
Recent human imaging and animal studies highlight the importance of frontoamygdala circuitry in the regulation of emotional behavior and its disruption in anxiety-related disorders. Although tracing studies have suggested changes in amygdala-cortical connectivity through the adolescent period in rodents, less is known about the reciprocal connections within this circuitry across human development, when these circuits are being fine-tuned and substantial changes in emotional control are observed. The present study examined developmental changes in amygdala-prefrontal circuitry across the ages of 4-22 years using task-based functional magnetic resonance imaging. Results suggest positive amygdala-prefrontal connectivity in early childhood that switches to negative functional connectivity during the transition to adolescence. Amygdala-medial prefrontal cortex functional connectivity was significantly positive (greater than zero) among participants younger than 10 years, whereas functional connectivity was significantly negative (less than zero) among participants 10 years and older, over and above the effect of amygdala reactivity. The developmental switch in functional connectivity was paralleled by a steady decline in amygdala reactivity. Moreover, the valence switch might explain age-related improvement in task performance and a developmentally normative decline in anxiety. Initial positive connectivity followed by a valence shift to negative connectivity provides a neurobiological basis for regulatory development and may present novel insight into a more general process of developing regulatory connections.
