External circumstances and internal bodily states often change and require organisms to flexibly adapt valuation processes to select the optimal action in a given context. Here, we investigate the neurobiology of context-dependent valuation in 22 human subjects using functional magnetic resonance imaging. Subjects made binary choices between visual stimuli with three attributes (shape, color, and pattern) that were associated with monetary values. Context changes required subjects to deviate from the default shape valuation and to integrate a second attribute to comply with the goal to maximize rewards. Critically, this binary choice task did not involve any conflict between opposing monetary, temporal, or social preferences. We tested the hypothesis that interactions between regions of dorsolateral prefrontal cortex (dlPFC) and ventromedial prefrontal cortex (vmPFC) implicated in self-control choices would also underlie the more general function of context-dependent valuation. Consistent with this idea, we found that the degree to which stimulus attributes were reflected in vmPFC activity varied as a function of context. In addition, activity in dlPFC increased when context changes required a reweighting of stimulus attribute values. Moreover, the strength of the functional connectivity between dlPFC and vmPFC was associated with the degree of context-specific attribute valuation in vmPFC at the time of choice. Our findings suggest that functional interactions between dlPFC and vmPFC are a key aspect of context-dependent valuation and that the role of this network during choices that require self-control to adjudicate between competing outcome preferences is a specific application of this more general neural mechanism.
Systemic manipulations have shown that dopamine and serotonin systems are involved in risky decision making. However, how they work within the regions that implement risky choices remains unclear. The present study investigated the role of dopamine and serotonin in the rat anterior insular cortex (AIC) and orbitofrontal cortex (OFC), which make different contributions to risky decision making. We examined the effects of local injection of the D1 (SCH23390), D2 (eticlopride), 5-HT1A (WAY100635) and 5-HT2A (M100907) receptor antagonists into the AIC or OFC on risk preference in a gambling task. We found that different dopamine and serotonin receptor subtypes in the AIC and OFC differentially influence risky decision making: intra-AIC injection of D2R or 5-HT1AR blockers increased risk preference whereas intra-OFC injection of the 5-HT1AR blocker decreased it. Risk preference was not altered by intra-AIC injection of D1R and 5-HT2AR blockers or by intra-OFC injection of D1R, D2R, and 5-HT2AR blockers. Furthermore, additional analyses revealed that dopamine and serotonin signaling in the AIC have outcome history-dependent effects on risk taking: intra-AIC injection of the D2R blocker increased risk preference particularly after winning in a previous risky choice, whereas intra-AIC injection of the 5-HT1AR blocker increased risk preference after losing.
The Hotelling game of pure location allows interpretations in spatial competition, political theory, and strategic forecasting. In this paper, the doubly symmetric mixed-strategy equilibrium for n≥4 firms is characterized as the solution of a well-behaved boundary value problem. The analysis suggests that, in contrast to the cases n=3 and n→∞, the equilibrium for a finite number of n≥4 firms tends to overrepresent locations at the periphery of its support interval. Moreover, in the class of examples considered, an increase in the number of firms universally leads to a wider range of location choices and to a more dispersed distribution of individual locations.
Unternehmer braucht das Land, sagt der Ökonom Fabrizio Zilibotti: Sie sorgen
für Innovationen und wirtschaftliche Entwicklung. Zilibotti erforscht den Esprit
des Unternehmertums und wie dieser weitergegeben wird.
Since time immemorial, parents have struggled with the question of how best to raise their children. This column argues that the choice of parenting style is driven by incentives. Parents weigh the expected costs and benefits of implementing a certain parenting style. The popularity of the authoritarian style is declining because the economic returns to the independence of children have risen. The rising inequality implies higher returns to education. This calls for pushier parenting styles, such as the authoritative one. A decline in inequality is likely to prompt a more relaxed parenting.
How does an ex-ante contract affect behavior in an ex-post renegotiation game? We address this question in a canonical buyer–seller relationship with renegotiation. Our paper provides causal experimental evidence that an initial contract has a highly significant and economically important
impact on renegotiation behavior that goes beyond the effect of contracts on bargaining threat points. We compare situations in which an initial contract is renegotiated to strategically equivalent bargaining situations in which no ex-ante contract was written. The ex-ante contract causes sellers to ask for markups that are 45% lower than in strategically equivalent bargaining situations without an
initial contract. Moreover, buyers are more likely to reject given markups in renegotiations than in negotiations. These effects do not depend on whether the contract was written under competitive or monopolistic conditions. Our results provide strong evidence supporting the hypothesis that contracts serve as reference points that shape and coordinate the expectations of the contracting parties.
We show that professional soccer players and their coaches exhibit reference-dependent behavior during matches. Controlling for the state of the match and for unobserved heterogeneity, we show on a minute-by-minute basis that players breach the rules of the game, measured by the referee's assignment of cards, signifcantly more often if their teams are behind the expected match outcome, measured by pre-play betting odds of large professional bookmakers. We further show that coaches implement signifcantly more offensive substitutions if their teams are behind
expectations. Both types of behaviors impair the expected ultimate match outcome of the team, which shows that our fndings do not simply reflect fully rational responses to referencedependent incentive schemes of favorite teams to falling behind. We derive these results in a data set that contains more than 8'200 matches from 12 seasons of the German Bundesliga and 12 seasons of the English Premier League.
We recently assessed the (possible) effect of plain packaging on the smoking behaviour of young Australian individuals (aged 14–17 years). Our conclusion was that there is no evidence that plain packaging has lowered smoking prevalence among young Australians.
