Module 2: How the brain decides

Question 1

Maximizing choice

Answer 1

Choosing the alternative with the highest value, reward or utility

Question 2

Rewards

Answer 2

Proximate (approach) goals that, when acquired, enhance chances of survival and successful reproduction

Question 3

Punishment

Answer 3

Proximate (avoidance) goal that, when avoided, serves to enhance the long-term chances of survival and successful reproduction

Question 4

3 interconnected levels involved in reward

Answer 4

1. Midbrain Ventral tegmental area (VTA)
   
   • Dopamine production
2. (ventral) striatum (NAcc)
   
   • Expecting things from environment
   • Preferences
3. Ventromedial prefrontal cortex (vmPFC)
   
   • Comparing different types of rewards
   • Relative value

Question 5

Ordinal Utility Theory

Answer 5

While the utility of a particular good and service cannot be measured using a numerical scale, different alternatives can be ordered into worse, equal or better
- Showing that value is computed in relative terms

Question 6

Complete: Valuation is relative to… (4)

Answer 6

1. The alternatives
2. What you already have
3. What others are getting
4. Our beliefs about the value we’re getting

Question 7

What did they wine study research?

Answer 7

• The hypothised that changes in the price of a product can influence neural computations associated with experienced pleasantness
• Participants were told that they were tasting five different wines, but it actually were only three
• Higher taste expectations lead to higher activity in the medial orbitofrontal cortex

Question 8

Economic exchange

Answer 8

Decision to trade one good for another, based on a comparison of relative value

Question 9

Where are experienced value and decision value represented?

Answer 9

• Experienced value&raquo_space; anterior vmPFC
• Decision value&raquo_space; posterior vmPFC

Question 10

Name three types of costs that people make to get something valuable

Answer 10

1. Risk
2. (monetary) losses
3. Effort

Question 11

Risk (economist definition)

Answer 11

Variance of possible monetary outcomes
- Risk seeking: preference for a higher variance (but also high reward) payoff

Question 12

Risk (psychologist definition)

Answer 12

The possibility of inflicting (monetary) harm to oneself or to others
- Risk seeking: preference for options that may result in harm or losses (but potentially high gain)

Question 13

Problems with expected value (2)

Answer 13

1. Model does not capture risk aversion
2. Expected value maximization works only with low to moderate amounts of money (marginal value of money)

Question 14

Weber’s law

Answer 14

Two stimuli must differ by a constant minimum percentage to be perceived as different (think of example of shouting in a noisy room vs. whispering in a quiet room)

Question 15

What role does the insula play in regarding to risk

Answer 15

• perceiving risk
• increased activity&raquo_space; decreased risk taking
• Aversive emotions such as fear, sadness, disgust or anxiety (these are implicated in risk processing)

Question 16

What role does the ACC/DMPFC play in regarding to risk

Answer 16

• Acts against negative feelings of taking risk
• Earlier research: response conflict, error monitoring, decision making and overriding default responses
• Increased activity&raquo_space; increased risk taking

Question 17

Regret and losses

Answer 17

Both (regret even more than losses) activate the neural circuitry involved in processing pain and other negative feelings (insula and ACC)

Question 18

How is expected value estimated?

Answer 18

Sum of the magnitudes multiplied by the probabilities of all possible outcomes (objective value is linear)

Question 19

How is expected utility estimated?

Answer 19

Sum of the uitlities multiplied by the probabilities of all possible outcomes (subjective utility can curve)

Question 20

Delay discounting

Answer 20

Valuing immediate rewards more than delayed
- Subjective value is discounted hyperbolic

Question 21

Effort delay

Answer 21

Effort carries a cost, a reward may carry higher value if it is easily obtained than if it is obtained through great effort

Question 22

Which 4 effects show reference dependence when making choices

Answer 22

1. Reflection effect
2. End-of-the-day effect
3. Framing effect
4. Endowment effect

Question 23

Reflection effect

Answer 23

Preferences flip when changing the signs (gain vs loss)
- making you risk averse for gains and risk seeking for losses

Question 24

End-of-the-day effect

Answer 24

Shift to long shots (higher risks) at the end of the day (end of betting session)&raquo_space; trying to make up for losses

Question 25

Framing effect

Answer 25

Framing something as a loss or a gain changes the reference (Ancient disease example)

Question 26

Endowment effect

Answer 26

Owning something makes you value it more