Neuroeconomics :
Neuroscience of decision making
Lecture N1
Introduction
Vasily Klucharev
- Higher School of Economics
Course Structure:
Module I: How the Brain works
Module II: How the Brain decides
Module III: How the Brain feels
Module IV: Society of Brains
What to expect/ dont expect from the
course:
Expect
Short introduction to Neuroeconomics
Limitations of Neuroeconomics
Trivial and nontrivial facts
Discussion of multidisciplinary paradigms
Difficult papers to read
Do not expect
A unified theory
Discussion of all aspects of Neuroeconomics
Easy to read handbooks
The Astonishing Hypothesis:
A person's mental
activities are entirely
due to the behavior of
nerve cells, glial cells,
and the atoms, ions,
and molecules that
make them up and
influence them.
Francis Crick (1916 2004)
Neuroeconomics perspective:
Economics, psychology, and neuroscience
are converging today into a single, unified
discipline with the ultimate aim of providing
a single, general theory of human behavior neuroeconomics.
The goal of this discipline is to understand
the processes that connect sensation and
action by revealing the neurobiological
mechanisms by which decisions are made.
Adopted from Glimcher&Rustichini, Science 2004
Neuroeconomics =
Neuroscience of
Decision making
Neuroscience the scientific
study of the nervous system,
a branch of biology.
Level of complexity
biosphere
society
Economics
&
Social Psychology
cognition
Cognitive psychology
brain
Neuroscience
neuron
Cellular Neuroscience
gene
Genetics
Level of complexity
biosphere
society
cognition
brain
neuron
gene
Neuro-Economics
economics
social and cognitive
psychology
some assumptions
rationality
???
neuroscience
economics
social and cognitive
psychology
neuroscience
some assumptions
rationality
???
cognitive structures
are real
???
Circular reasoning problem
In current psychological models the existence of
cognitive systems is postulated from observation
and analysis of behavior, which in turn is used to
explain behavior.
The only way to solve this dilemma was to use
tools or methods that enable researchers to
investigate behavior in a new, more objective
way - perhaps neuro-scientific.
economics
social and cognitive
psychology
neuroscience
some assumptions
Rationality
???
???
Cognitive structures
are real
???
Actor's behavior is
determined solely by
actor's neurons
A 2 gram per 5 sec
B 2 gram per 10 sec
Level of complexity
biosphere
society
cognition
brain
neuron
gene
Neuro-Economics
Conclusions
Behavioral economics
Daniel Kahneman
Experimental economics
Vernon Smith
Nobel Prize in Economics in 2002
Paul Glimcher
http://www.decisionsrus.com/
Core Neuroeconomics or Neuroscience of
decision making a field of neuroscience
that studies processes connecting sensation
and action by revealing the neurobiological
mechanisms by which decisions are made.
Extended Neuroeconomics a
multidisciplinary field that studies
mechanisms of decision making by
integrating the evolutionary, neurobiological
and social approaches.
Neuroeconomics
Motorlab, University of Pittsburgh
Brown University On April 12, 2011, nearly 15 years after she became paralyzed
and unable to speak, a woman controlled a robotic arm by thinking about moving
her arm and hand to lift a bottle of coffee to her mouth and take a drink.
The BrainGate2 Neural Interface System
An implanted microelectrode array, first used more than a decade
ago, detects brain signals which can be translated by a computer
into machine instructions, allowing control of robotic devices by
thought.
The 52-year-old patient had been diagnosed with a degenerative brain and spinal
disease 13 years earlier and eventually became unable to move her arms and
legs. In February 2012, the researchers implanted two microelectrode arrays into
the woman's left motor cortex
University of Pittsburgh
NATURE|Vol 465|6 May|2010
Conclusions
What is decision theory?
Decision theory is a theory about decision making.
Do I see red or green color of the traffic
lights? depends on our sensory system.
Shall I bring the umbrella tomorrow?
depends on something which I do not know,
namely whether it will rain or not.
Am I going to smoke the next cigarette? If I
make the same decision sufficiently many times
it may kill me.
A committee has to make a decision, but its
members have different opinions. How to
overcome disagreements?
Sven Ove Hansson
Main assumptions:
1.There are options to choose between
2. We choose in a non-random way
vs
3. Our choices are goal-directed activities.
vs
Main assumptions
There are options to choose between
We choose in a non-random way
Our choices are goal-directed activities.
Overall, decision theory is concerned with goaldirected behavior in the presence of options.
Normative and descriptive
theories
A normative decision theory a theory about
how decisions should be made
A descriptive theory a theory about how
decisions are actually made.
Sven Ove Hansson
Decision making
in Neuroeconomics
Conclusions
Ultimatum Game
Sum =100$
Split = 95:5$
Decision?
Two anonymous players
1st player divides a sum of money
2nd player can accept or reject this proposal.
- If he/she rejects, neither player receives anything
- If he/she accepts, the money is split according to the proposal
Game is played only once, and anonymously - reciprocation is not an issue.
An unfair offer in the Ultimatum Game leads to conflict
between emotional, reject, and cognitive, accept, systems.
Sanfly et al 2003
DLPFC - dorsolateral prefrontal cortex
Knoch et al 2006
Evolutionary basis of inequity aversion
Cea1.com
Comparison of Nervous System and
Endocrine System
Posterior Pituitary Hormone Production and Release:
Central projection
Oxytocin
In humans, plasma levels of oxytocin have
been related to :
warm contact with a partner,
gaps in social relationships,
male and female sexual responses,
and trust and trustworthiness during
financial decisions!
Paul J. Zak is Professor of Economics
Kosfeld et al 2005
Oxytocin
Placebo
Kosfeld et al 2005
Genetic influence on our decisions and behavior
Years working as a trader correlates with DA levels as determined by COMT alleles
These alleles are associated with moderate, rather than very high or very low, levels of synaptic dopamine.
Sapra S, Beavin LE, Zak PJ (2012) A Combination of Dopamine Genes Predicts Success by Professional Wall Street Traders. PLoS
ONE 7(1): e30844. doi:10.1371/journal.pone.0030844
http://www.plosone.org/article/info:doi/10.1371/journal.pone.0030844
Genetics,
Biology
Economics
Neuroscience
Psychology
Social sciences
Neuroeconomics
Conclusions
Brain activations when participants purchased the
products vs. did not purchase the products
Knutson et al 2005
Benjamin Libet
(1916-2007)
University of California
Libet, Benjamin; Gleason, Curtis A.; Wright, Elwood W.; Pearl, Dennis K.
(1983). "Time of Conscious Intention to Act in Relation to Onset of Cerebral
Activity (Readiness-Potential) - The Unconscious Initiation of a Freely Voluntary
Act". Brain 106: 623642.
Dabarti CGI
http://www.informationphilosopher.com/freedom/libet_experiments.html
Chun Siong Soon et al 2008
"Your decisions are strongly prepared by brain activity.
By the time consciousness kicks in, most of the work
has already been done," said study co-author JohnDylan Haynes
Figure 3. Decoding of upcoming motor decisions from frontopolar cortex.
Bode S, He AH, Soon CS, Trampel R, et al. (2011) Tracking the Unconscious Generation of Free Decisions Using UItra-High Field
fMRI. PLoS ONE 6(6): e21612. doi:10.1371/journal.pone.0021612
http://www.plosone.org/article/info:doi/10.1371/journal.pone.0021612
Martin Luther
(14831546)
Benedict de Spinoza
(1632 1677)
Immanuel Kant
(1724 1804)
men are deceived in thinking themselves free
So this - their not knowing any cause of their
actions - is their idea of freedom!
Benedict de Spinoza
Martin Luther
(14831546)
Benedict de Spinoza
(1632 1677 )
Visual system by
Felleman and Van Essen
(1991)
men are deceived in thinking themselves free
So this - their not knowing any cause of their
actions - is their idea of freedom!
Benedict de Spinoza
26% of all manipulated trials were caught by the subjects - choice
blindness.
Neuroscience of
Decision making
Eliminative materialism
our common-sense
conception of psychological
phenomena constitutes a
radically false theory, a theory
so fundamentally defective
that theory will eventually be
displaced, rather than
smoothly reduced, by
completed neuroscience.
Level of complexity
biosphere
society
cognition
brain
neuron
gene
Neuro-Economics
readymades
L.H.O.O.Q.
by Marcel Duchamp
http://neuroeconomics.org
Conclusions
END
Center for Neuroprosthetics CNP
Prof. Dr. Grgoire Courtine
Interdisciplinary field
A political scientist voting rules and other
aspects of collective decision-making
A psychologist personal decisions
A philosopher freedom, rationality and
morality in decisions
An engineer computational principles of
decisions
A biologist neural and evolutionary
mechanisms of decisions
