Decision Making Flashcards
(20 cards)
What is Homo economicus
-Rational Choice Theory
-Describes mathematically what decision-making should look like
Criteria of Homo economicus
- duration- how long it lasts
- intensity- how intense is it
- propinquity- how near or far
- extent- how many are affected
- certainty-how probable is it
- purity- how free from pain is it
- fecundity- does it lead to other pleasure
Are humans homo economicus?
-No, humans are predictable and can be influenced, decisions will not be mathematical or random.
-We are not rational creatures.
Cost of risk aversion
-People would rather take a sure option over a low reward chance
-Example: given a 50% chance at $100 or a sure payout of $35, people would rather take the sure payout
risk seeking
-The degree to which someone is willing to take a risk
ex-choice of a 1% chance at $1000 or a sure chance at $35, people would rather choose the 1% chance because the reward is big enough for the risk
prospect theory
-explores how people assign value to possible outcomes
utilitarianism
-the idea that you should act in ways that maximize happiness
Framing effect
-How you frame a question influences how people will respond.
-Results depend on whether the question focuses on how many people die or how many people are saved
Framing effect correlational studies
- A decision framed in terms of a gain will result in subjects choosing the “certain” option & causes the amygdala to be more active while considering the “risky” option
-A decision framed in terms of a loss will result in subjects choosing the “risky” choice to avoid the loss & the amygdala is more active while considering the “certain” option
-If subjects chose the “risky” option in questions framed in terms of a gain or the “certain” option for questions framed in terms of a loss then the dmPFC will be activated
-Subjects not affected by the framing effect will assign value to the options the same amount (regardless of gains or losses) = vmPFC activated (higher rationality)
Endowment Effect
endowment has to do w/money, so think assigning value
You assign more value to things that are sentimental to you. For example, if a person is selling something they will likely charge more than its worth because they hold it to a higher value because it is theirs.
Endowment Effect correlational studies
-Stronger endowment effect will mean stronger activation of the right insula
Ventral striatum activation = predicted preference of an item, regardless of selling/buying and price;
Medial prefrontal cortex = activation tracked person’s subjective value of the item (how good the deal is) (activation higher when the price went up and down)
Delay discounting
tendency to place less value on rewards that are delayed in time Measures propinquity: how close or how far (that reward is)
Exponential discounting
waiting for a reward will result in a higher reward than what is taken now, we don’t usually choose this one because we’d rather get something now than wait for a long time (even if you’d get more “money” in the future)
Hyperbolic discounting
psychological bias where people assign MORE value to immediate rewards and satisfaction and LESS value to delayed rewards
Obsolete Brains
-Intuitive system (system 1):
-an emotional fast response based on
intuition. This is known as a gut feeling, people cannot arrive at a reason for why they made that decision.
-Medial-prefrontal area is more activated with a short delay between decision and reward
Rational system (system 2):
-a conscious, slow, mental response based on reasoning. A person can explain why and how they arrived at their choice
-The Lateral prefrontal cortex area is more activated with longer delays between decision and reward
Ex: If you stimulate the medial area and shut down the lateral area, a subject will want an immediate reward vs
Ex: If you stimulate the lateral area and shut down the medial area = a subject will wait for a reward
Decision-making and risk correlational studies
Cambridge Gambling Task
Based on size of wager = level of confidence
Example: at auction and offer 1 million dollars you’re confident you get the reward bc most people are going to offer less money (and not as sure they’ll receive it)
Make decision to pursue risky reward = nucleus accumbens and vmPFC activated & the better odds of reward the greater activation of vmPFC
Make decision to avoid risky reward = insular cortex activated
vmPFC lesions but intact insula = gamble higher than controls BUT sensitive to LEVEL of risk when betting
Insula lesions but intact vmPFC = ignore level of risk
Main idea of lesions in decision making
MAIN IDEA: if you have lesion to VMPFC you’re gonna gamble more BUT your bet will be reduced because you still understand the degree of risk of your decision; if you have lesion to insula you also still gamble higher but now you don’t factor in the level of risk (ex: bet all your money instead of only a portion bc you do not feel averse to loss)
insula important for gut feelings that lead to loss aversion under uncertainty
tracking value
value of something in this moment vs when you receive it
Person has higher impulsivity = value goes down if delay is longer
Ex: offers you $20 but you have to wait until next week so $20 a week later doesn’t have value because you would rather have it now
Person is more patient = don’t decrease value of item over time
Ex: offer you $20 but you have to wait until next week, $20 still good so still valuing that over time
vmPFC and dlPFC
vmPFC involved in our value of things (preferences) and left dlPFC manages it
Example: see a donut and vmPFC really activated bc you love donuts (you assigned value to it), BUT dlPFC is activated and says “donut looks good now but not beneficial for you later” so it turns down the activation of the vmPFC
Always get high activation of vmPFC when you have your own preferences bc u value those things but dlPFC will decrease that activation
dlPFC is involved in response inhibition (so it’s all about turning down those area in the brain that want immediate reward so you can think rationally about something)
Conation
Connection of cognition and motivation
Voluntary behavior (combo of the way things are perceived and our thoughts)
Conation drives our morals in a way
Ex: trolley group
