Neurocognitive Underpinnings of Aggressive Predation in Economic Contests

Competitions are part and parcel of daily life and require people to invest time and energy to gain advantage over others and to avoid (the risk of) falling behind. Whereas the behavioral mechanisms underlying competition are well documented, its neurocognitive underpinnings remain poorly understood. We addressed this using neuroimaging and computational modeling of individual investment decisions aimed at exploiting one's counterpart ("attack") or at protecting against exploitation by one's counterpart ("defense"). Analyses revealed that during attack relative to defense (i) individuals invest less and are less successful; (ii) computations of expected reward are strategically more sophisticated (reasoning level k = 4 vs. k = 3 during defense); (iii) ventral striatum activity tracks reward prediction errors; (iv) risk prediction errors were not correlated with neural activity in either ROI or whole-brain analyses; and (v) successful exploitation correlated with neural activity in the bilateral ventral striatum, left OFC, left anterior insula, left TPJ, and lateral occipital cortex. We conclude that, in economic contests, coming out ahead (vs. not falling behind) involves sophisticated strategic reasoning that engages both reward and value computation areas and areas associated with theory of mind.

Relief from incidental fear evokes exuberant risk taking

Incidental emotions are defined as feelings that are unrelated to a decision task at hand and thereby not normatively relevant for making choices. The precise influence and formal theoretical implications of incidental emotions regarding financial risk taking are still largely unclear. An effect of incidental emotion on decision-making would challenge the main extant formal theoretical economic models because such models do not allow for an effect of incidental emotions. As financial risk taking is pervasive in modern economies, the role of incidental emotions is an important issue. The goal of this experimental study is threefold. First, we examine the impact of incidental fear on the choice between a sure and a risky monetary option. A well-validated method of fear induction, using electric shocks, is employed for that purpose. Based on emotion studies we hypothesize less risk taking under fear and more risk taking when relieved of fear. Our second goal is to investigate the relative performance of the main existing formal theoretical economic models (based on Expected Utility Theory, Prospect Theory, or the Mean-Variance model) in explaining the behavioral data. We also investigate how these models can be adjusted to accommodate any observed influence of incidental emotion. For that reason, we first theoretically model the potential pathways of incidental fear (and the relief thereof) via the valuation of the choice option rewards or risk-assessment. We then estimate the relevant parameters allowing for both additive as well as interactive effects. Our third and final goal is to explore the neural basis of any observed influence of incidental emotions on decision-making by means of a model-based fMRI analysis, using the findings of existing neuroeconomic studies as the basis for our hypotheses. Our results indicate that the relief of fear can give a substantial boost to financial risk taking (suggestive of exuberance). This impact is best captured by Prospect Theory if we allow for an increase in participants’ valuation of option outcomes when relieved of fear. Moreover, this impact is manifested at the neural level by the activity of the ventromedial prefrontal cortex (vmPFC), a brain area widely regarded as being central for valuation.

Neural dynamics of social tie formation in economic decision-making

The disposition for prosocial conduct, which contributes to cooperation as arising during social interaction, requires cortical network dynamics responsive to the development of social ties, or care about the interests of specific interaction partners. Here, we formulate a dynamic computational model that accurately predicted how tie formation, driven by the interaction history, influences decisions to contribute in a public good game. We used model-driven functional MRI to test the hypothesis that brain regions key to social interactions keep track of dynamics in tie strength. Activation in the medial prefrontal cortex (mPFC) and posterior cingulate cortex tracked the individual's public good contributions. Activation in the bilateral posterior superior temporal sulcus (pSTS), and temporo-parietal junction was modulated parametrically by the dynamically developing social tie-as estimated by our model-supporting a role of these regions in social tie formation. Activity in these two regions further reflected inter-individual differences in tie persistence and sensitivity to behavior of the interaction partner. Functional connectivity between pSTS and mPFC activations indicated that the representation of social ties is integrated in the decision process. These data reveal the brain mechanisms underlying the integration of interaction dynamics into a social tie representation which in turn influenced the individual's prosocial decisions.

Neural correlates of dynamically evolving interpersonal ties predict prosocial behavior

There is a growing interest for the determinants of human choice behavior in social settings. Upon initial contact, investment choices in social settings can be inherently risky, as the degree to which the other person will reciprocate is unknown. Nevertheless, people have been shown to exhibit prosocial behavior even in one-shot laboratory settings where all interaction has been taken away. A logical step has been to link such behavior to trait empathy-related neurobiological networks. However, as a social interaction unfolds, the degree of uncertainty with respect to the expected payoff of choice behavior may change as a function of the interaction. Here we attempt to capture this factor. We show that the interpersonal tie one develops with another person during interaction – rather than trait empathy – motivates investment in a public good that is shared with an anonymous interaction partner. We examined how individual differences in trait empathy and interpersonal ties modulate neural responses to imposed monetary sharing. After, but not before interaction in a public good game, sharing prompted activation of neural systems associated with reward (striatum), empathy (anterior insular cortex and anterior cingulate cortex) as well as altruism, and social significance [posterior superior temporal sulcus (pSTS)]. Although these activations could be linked to both empathy and interpersonal ties, only tie-related pSTS activation predicted prosocial behavior during subsequent interaction, suggesting a neural substrate for keeping track of social relevance.

On the nature, modeling, and neural bases of social ties

PURPOSE

This chapter addresses the nature, formalization, and neural bases of (affective) social ties and discusses the relevance of ties for health economics. A social tie is defined as an affective weight attached by an individual to the well-being of another individual ('utility interdependence'). Ties can be positive or negative, and symmetric or asymmetric between individuals. Characteristic of a social tie, as conceived of here, is that it develops over time under the influence of interaction, in contrast with a trait like altruism. Moreover, a tie is not related to strategic behavior such as reputation formation but seen as generated by affective responses.

METHODOLOGY/APPROACH

A formalization is presented together with some supportive evidence from behavioral experiments. This is followed by a discussion of related psychological constructs and the presentation of suggestive existing neural findings. To help prepare the grounds for a model-based neural analysis some speculations on the neural networks involved are provided, together with suggestions for future research.

FINDINGS

Social ties are not only found to be important from an economic viewpoint, it is also shown that they can be modeled and related to neural substrates.

ORIGINALITY/VALUE OF THE CHAPTER

By providing an overview of the economic research on social ties and connecting it with the broader behavioral and neuroeconomics literature, the chapter may contribute to the development of a neuroeconomics of social ties.