Prospect theory on the brain? Toward a cognitive neuroscience of decision under risk

Cognitive Brain Research

Volumn 23, Issue 1, 2005, Pages 34-50

  Trepel, Christopher ^a   Fox, Craig R ^a,b   Poldrack, Russell A ^b  

^a UNIVERSITY OF CALIFORNIA   (United States)

^b UNIVERSITY OF CALIFORNIA   (United States)

Author keywords

Decision making; fMRI; Prospect theory; Punishment; Reward; Risk

Indexed keywords

AMYGDALOID NUCLEUS; AVERSION; COGNITION; CONFERENCE PAPER; CORPUS STRIATUM; DECISION MAKING; ECONOMIC ASPECT; EXPERIENCE; FUNCTIONAL MAGNETIC RESONANCE IMAGING; GAME; HUMAN; NEUROIMAGING; NEUROSCIENCE; PREFRONTAL CORTEX; PRIORITY JOURNAL; PROBABILITY; PSYCHOLOGICAL THEORY; PUNISHMENT; REWARD; RISK; THEORETICAL MODEL; VALIDATION PROCESS;

EID: 15744398936     PISSN: 09266410     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.cogbrainres.2005.01.016     Document Type: Conference Paper

References (131)

1. M. Abdellaoui Parameter-free elicitation of utility and probability weighting functions Manage. Sci. 46 11 2000 1497 1512
2. M. Abdellaoui, H. Bleichrodt, C. Paraschiv, Measuring loss aversion under prospect theory: a parameter-free approach. Unpublished manuscript, CRNS-GRID, Cachan, France (2004).
3. M. Abdellaoui, F. Vossmann, M. Weber, Choice-based elicitation and decomposition of decision weights for gains and losses under uncertainty. Management Science, forthcoming (in press).
4. M. Allais Le comportement de l'homme rationel devant le risque, critique des postulates et axiomes de l'ecole americaine Econometrica 21 1953 503 546
5. M. Allais, and O. Hagan The so-called Allais Paradox and rational decisions under uncertainty O.H.M. Allais Expected utility hypothesis and the Allais Paradox 1979 Reidel Publishing Company Dordrecht, The Netherlands 434 698
6. A.K. Anderson, K. Christoff, I. Stappen, D. Panitz, D.G. Ghahremani, G. Glover, J.D. Gabrieli, and N. Sobel Dissociated neural representations of intensity and valence in human olfaction Nat. Neurosci. 6 2003 196 202
7. A.R. Aron, R.A. Poldrack, The cognitive neuroscience of response inhibition: relevance for genetic research in ADHD. Biological Psychiatry (in press).
8. A.R. Aron, T. Robbins, and R.A. Poldrack Inhibition and the right inferior frontal cortex Trends Cogn. Sci. 8 2004 170 177
9. A.R. Aron, D. Shohamy, J. Clark, C. Myers, M.A. Gluck, and R.A. Poldrack Human midbrain sensitivity to cognitive feedback and uncertainty during classification learning J. Neurophysiol. 2004 1144 1152
10. G. Barron, and I. Erev Small feedback-based decisions and their limited correspondence to description-based decisions J. Behav. Decis. Mak. 16 3 2003 215 233
11. M.G. Baxter, and E.A. Murray The amygdala and reward Nat. Rev., Neurosci. 3 7 2002 563 573
12. A. Bechara, A.R. Damasio, H. Damasio, and S.W. Anderson Insensitivity to future consequences following damage to human prefrontal cortex Cognition 50 1-3 1994 7 15
13. A. Bechara, D. Tranel, H. Damasio, and A.R. Damasio Failure to respond autonomically to anticipated future outcomes following damage to prefrontal cortex Cereb. Cortex 6 2 1996 215 225
14. A. Bechara, H. Damasio, A.R. Damasio, and G.P. Lee Different contributions of the human amygdala and ventromedial prefrontal cortex to decision-making J. Neurosci. 19 13 1999 5473 5481
15. A. Bechara, D. Tranel, and H. Damasio Characterization of the decision-making deficit of patients with ventromedial prefrontal cortex lesions Brain 123 Pt. 11 2000 2189 2202
16. S. Benartzi, and R.H. Thaler Myopic loss aversion and the equity premium puzzle Q. J. Econ. 110 1 1995 73 92
17. D. Bernoulli Specimen theoriae novae de mensura sortis Comment. Acad. Sci. Imp. Petropolitanae 5 1738 175 192 (Translated by L. Sommer as New exposition on the measurement of risk. Econometrica, 22 (1738) 23-26).
18. K.C. Berridge, and T.E. Robinson What is the role of dopamine in reward: hedonic impact, reward learning, or incentive salience? Brain Res. Brain Res. Rev. 28 3 1998 309 369
19. H. Bleichrodt Utility of gains and losses: measurement-Theoretical and experimental approaches J. Econ. Lit. 39 1 2001 130 131
20. E. Brandstätter, A. Kühberger, and F. Schneider A cognitive-emotional account of the shape of the probability weighting function J. Behav. Decis. Mak. 15 2002 79 100
21. H.C. Breiter, I. Aharon, D. Kahneman, A. Dale, and P. Shizgal Functional imaging of neural responses to expectancy and experience of monetary gains and losses Neuron 30 2 2001 619 639
22. C.F. Camerer Prospect theory in the wild Chap. 16 D. Kahneman A. Tversky Choices, values, and frames 2000 Cambridge Univ. Press Cambridge, UK
23. C.F. Camerer, and T.H. Ho Violations of the betweenness axiom and nonlinearity in probability J. Risk Uncertain. 8 2 1994 167 196
24. R.N. Cardinal, C.A. Winstanley, T.W. Robbins, and B.J. Everitt Limbic corticostriatal systems and delayed reinforcement Ann. N. Y. Acad. Sci. 1021 2004 33 50
25. C. Clotfelter, and P. Cook Selling hope: state lotteries in America 1989 Harvard Univ. Press Cambridge, MA
26. J.R. Cooper, F.E. Bloom, and R.H. Roth The biochemical basis of neuropharmacology 2002 Oxford University Press New York, NY
27. N.D. Daw, S. Kakade, and P. Dayan Opponent interactions between serotonin and dopamine Neural Netw. 15 4-6 2002 603 616
28. M.R. Delgado, H.M. Locke, V.A. Stenger, and J.A. Fiez Dorsal striatum responses to reward and punishment: effects of valence and magnitude manipulations Cogn. Affect. Behav. Neurosci. 3 1 2003 27 38
29. R. Dhar, and K. Wertenbroch Consumer choice between hedonic and utilitarian goods J. Mar. Res. 37 2000 60 71
30. R. Elliott, K.J. Friston, and R.J. Dolan Dissociable neural responses in human reward systems J. Neurosci. 20 16 2000 6159 6165
31. R. Elliott, J.L. Newman, O.A. Longe, and J.F. Deakin Differential response patterns in the striatum and orbitofrontal cortex to financial reward in humans: a parametric functional magnetic resonance imaging study J. Neurosci. 23 1 2003 303 307
32. D. Ellsberg Risk, ambiguity, and the Savage axioms Q. J. Econ. 75 1961 643 669
33. S. Epstein Integration of the cognitive and the psychodynamic unconscious Am. Psychol. 49 1994 709 724
34. S. Erk, M. Kiefer, J. Grothe, A.P. Wunderlich, M. Spitzer, and H. Walter Emotional context modulates subsequent memory effect NeuroImage 18 2003 439 447
35. J. Evenden Impulsivity: a discussion of clinical and experimental findings J. Psychopharmacol. 13 2 1999 180 192
36. M.S. Fanselow, and J.E. LeDoux Why we think plasticity underlying Pavlovian fear conditioning occurs in the basolateral amygdala Neuron 23 2 1999 229 232
37. D. Faro, Y. Rottenstreich, Affect, empathy, and regressive mispredictions of others' preferences under risk. Working Paper, Fuqua School of Business, Duke University (2005).
38. L.K. Fellows, and M.J. Farah Ventromedial frontal cortex mediates affective shifting in humans: evidence from a reversal learning paradigm Brain 126 Pt. 8 2003 1830 1837
39. L.K. Fellows, and M.J. Farah Different underlying impairments in decision-making following ventromedial and dorsolateral frontal lobe damage in humans Cereb. Cortex 2005 58 63
40. C.D. Fiorillo, P.N. Tobler, and W. Schultz Discrete coding of reward probability and uncertainty by dopamine neurons Science 299 5614 2003 1898 1902
41. P. Fishburn, and G. Kochenberger Two-piece von Neumann-Morgenstern utility functions Decis. Sci. 10 1979 503 518
42. C.R. Fox, and K.E. See Belief and preference in decision under uncertainty D. Hardman L. Macchi Reasoning and decision making: current trends and perspectives 2003 Wiley New York
43. C.R. Fox, and A. Tversky A belief-based account of decision under uncertainty Manage. Sci. 44 1998 879 895
44. H. Garavan, J.C. Pendergrass, T.J. Ross, E.A. Stein, and R.C. Risinger Amygdala response to both positively and negatively valenced stimuli NeuroReport 18 2001 2779 2783
45. W.J. Gehring, and A.R. Willoughby The medial frontal cortex and the rapid processing of monetary gains and losses Science 295 5563 2002 2279 2282
46. G.B. Glavin Stress and brain noradrenaline: a review Neurosci. Biobehav. Rev. 9 2 1985 233 243
47. J.W. Gnadt, and R.A. Andersen Memory related motor planning activity in posterior parietal cortex of macaque Exp. Brain Res. 70 1 1988 216 220
48. M. Gomez-Beldarrain, C. Harries, J.C. Garcia-Monco, E. Ballus, and J. Grafman Patients with right frontal lesions are unable to assess and use advice to make predictive judgments J. Cogn. Neurosci. 16 2004 74 89
49. R. Gonzalez, and G. Wu On the shape of the probability weighting function Cogn. Psychol. 38 1999 129 166
50. S.N. Haber, and M.J. Gdowski The basal ganglia G. Paxinos J.K. Mai The human nervous system 2nd edition 2003 Elsevier Science/Academic Press San Diego
51. C. Heath, R.P. Larrick, and G. Wu Goals as reference points Cogn. Psychol. 38 1999 79 109
52. J.C. Hershey, and P.J. Schoemaker Prospect theory's reflection hypothesis: a critical examination Org. Behav. Human Decis. Process. 25 3 1980 395 418
53. R. Hertwig, G. Barron, E.U. Weber, and I. Erev Decisions from experience and the effect of rare events in risky choice Psychol. Sci. 15 8 2004 534 539
54. C.B. Holroyd, and M.G. Coles The neural basis of human error processing: reinforcement learning, dopamine, and the error-related negativity Psychol. Rev. 109 4 2002 679 709
55. C.K. Hsee, and Y. Rottenstreich Music, pandas, and muggers: on the affective psychology of value J. Exp. Psychol. Gen. 133 1 2004 23 30
56. S. Ikemoto, and J. Panksepp Dissociations between appetitive and consummatory responses by pharmacological manipulations of reward-relevant brain regions Behav. Neurosci. 110 2 1996 331 345
57. A.M. Isen, T.E. Nygren, and F.G. Ashby Influence of positive affect on the subjective utility of gains and losses: it is just not worth the risk J. Pers. Soc. Psychol. 55 1988 710 717
58. I. Kahn, Y. Yeshurun, P. Rotshtein, I. Fried, D. Ben-Bashat, and T. Hendler The role of the amygdala in signaling prospective outcome of choice Neuron 33 6 2002 983 994
59. D. Kahneman New challenges to the rationality assumption J. Inst. Theor. Econ. 150 1994 18 36
60. D. Kahneman A perspective on judgment and choice: mapping bounded rationality Am. Psychol. 58 9 2003 697 720
61. D. Kahneman, and A. Tversky Prospect theory: an analysis of decision under risk Econometrica 4 1979 263 291
62. D. Kahneman, and A. Tversky Rational choice and the framing of decisions J. Bus. 59 1986 S251 S278
63. D. Kahneman, and A. Tversky Loss aversion in riskless choice: a reference-dependent model Q. J. Econ. 106 1991 1039 1061
64. D. Kahneman, J.L. Knetsch, and R.H. Thaler Experimental tests of the endowment effect and the Coase theorem J. Polit. Econ. 98 1990 1325 1348
65. D. Kahneman, P.P. Wakker, and R. Sarin Back to Bentham?-Explorations of experienced utility Q. J. Econ. 112 1997 375 405
66. D. Kahneman, I. Ritov, and D. Schkade Economic preferences or attitude expressions? An analysis of dollar responses to public issues D. Kahneman A. Tversky Choices, values, and frames 2000 Cambridge Univ. Press New York 642 672
67. M. Kilka, and M. Weber What determines the shape of the probability weighting function under uncertainty Manag. Sci. 47 2001 1712 1726
68. F. Knight Risk, uncertainty, and profit 1921 Houghton-Mifflin Boston, MA
69. B. Knutson, R. Peterson, Neurally reconstructing expected utility. Games and Economic Behavior (in press).
70. B. Knutson, C.M. Adams, G.W. Fong, and D. Hommer Anticipation of increasing monetary reward selectively recruits nucleus accumbens J. Neurosci. 21 16 2001 RC159
71. B. Knutson, G.W. Fong, S.M. Bennett, C.M. Adams, and D. Hommer A region of mesial prefrontal cortex tracks monetarily rewarding outcomes: characterization with rapid event-related fMRI NeuroImage 18 2 2003 263 272
72. K.S. LaBar, J.E. LeDoux, D.D. Spencer, and E.A. Phelps Impaired fear conditioning following unilateral temporal lobectomy in humans J. Neurosci. 15 10 1995 6846 6855
73. R.T. LaLumiere, T.V. Buen, and J.L. McGaugh Post-training intra-basolateral amygdala infusions of norepinephrine enhance consolidation of memory for contextual fear conditioning J. Neurosci. 23 17 2003 6754 6758
74. P.K. Lattimore, J.R. Baker, and A.D. Witte The influence of probability on risky choice-A parametric examination J. Econ. Behav. Organ. 17 3 1992 377 400
75. J.S. Lerner, and D. Keltner Fear, anger, and risk J. Pers. Soc. Psychol. 81 1 2001 146 159
76. G.F. Loewenstein, E.U. Weber, C.K. Hsee, and N. Welch Risk as feelings Psychol. Bull. 127 2001 267 286
77. F. Manes, B. Sahakian, L. Clark, R. Rogers, N. Antoun, M. Aitken, and T. Robbins Decision-making processes following damage to the prefrontal cortex Brain 125 2002 624 639
78. H. Mano Risk taking, framing effects, and affect Org. Behav. Hum. Decis. Process. 57 1994 28 58
79. J.G. March, and Z. Shapira Managerial perspectives on risk and risk-taking Manage. Sci. 33 1987 1404 1418
80. B. Marsh, and A. Kacelnik Framing effects and risky decisions in starlings Proceedings of the National Academy of Sciences U.S.A. 99 2002 3352 3355
81. S. Maren, G. Aharonov, and M.S. Fanselow Retrograde abolition of conditional fear after excitotoxic lesions in the basolateral amygdala of rats: absence of a temporal gradient Behav. Neurosci. 110 4 1996 718 726
82. S.M. McClure, N.D. Daw, and P.R. Montague A computational substrate for incentive salience Trends Neurosci. 26 8 2003 423 428
83. S.M. McClure, J. Li, D. Tomlin, K.S. Cypert, L.M. Montague, and P.R. Montague Neural correlates of behavioral preference for culturally familiar drinks Neuron 44 2 2004 379 387
84. B.J. McNeil, S.G. Pauker, H.C. Sox Jr., and A. Tversky On the elicitation of preferences for alternative therapies N. Engl. J. Med. 306 1982 1259 1262
85. B.A. Mellers Choice and the relative pleasure of consequences Psychol. Bull. 126 2000 910 924
86. E.K. Miller, and J.D. Cohen An integrative theory of prefrontal cortex function Annu. Rev., Neurosci. 24 2001 167 202
87. R.P. Montague, and G.S. Berns Neural economics and the biological substrates of valuation Neuron 36 2002 265 284
88. J.S. Morris, C.D. Frith, D.I. Perrett, D. Rowland, A.W. Young, and A.J. Calder A differential neural response in the human amygdala to fearful and happy facial expressions Nature 383 6603 1996 812 815
89. S.I. Neophytou, S. Aspley, S. Butler, S. Beckett, and C.A. Marsden Effects of lesioning noradrenergic neurones in the locus coeruleus on conditioned and unconditioned aversive behaviour in the rat Prog. Neuro-Psychopharmacol. Biol. Psychiatry 25 6 2001 1307 1321
90. T. Odean Are investors reluctant to realize their losses? J. Finance 53 1998 1775 1798
91. J. O'Doherty, H. Critchley, R. Deichmann, and R.J. Dolan Dissociating valence of outcome from behavioral control in human orbital and ventral prefrontal cortices J. Neurosci. 23 21 2003 7931 7939
92. J.W. Payne, D.J. Laughhunn, and R. Crum Further tests of aspiration level effects in risky choice Manage. Sci. 27 1981 953 958
93. E. Peters, The functions of affect in the construction of preferences. Chapter to appear, in S. Lichtenstein and P. Slovic (Eds.), The Construction of Preference, New York: Cambridge University Press. (in press).
94. M.L. Platt, and P.W. Glimcher Neural correlates of decision variables in parietal cortex Nature 400 6741 1999 233 238
95. R.A. Poldrack, J. Clark, E.J. Pare-Blagoev, D. Shohamy, J. Creso Moyano, and C. Myers Interactive memory systems in the human brain Nature 414 6863 2001 546 550
96. D. Prelec The probability weighting function Econometrica 66 1998 497 527
97. M. Rabin Diminishing marginal utility of wealth cannot explain risk aversion Chap. 11 D. Kahneman A. Tversky Choices, values, and frames 2000 Cambridge Univ. Press Cambridge, UK
98. L.A. Real Paradox, performance, and the architecture of decision making in animals Am. Zool. 36 1996 518 529
99. R.D. Rogers, E.M. Tunbridge, Z. Bhagwagar, W.C. Drevets, B.J. Sahakian, and C.S. Carter Tryptophan depletion alters the decision-making of healthy volunteers through altered processing of reward cues Neuropsychopharmacology 28 1 2003 153 162
100. R.D. Rogers, M. Lancaster, J. Wakeley, and Z. Bhagwagar Effects of beta-adrenoceptor blockade on components of human decision-making Psychopharmacology (Berl.) 172 2 2004 157 164
101. R.D. Rogers, N. Ramnani, C. Mackay, J.L. Wilson, P. Jezzard, and C.S. Carter Distinct portions of anterior cingulate cortex and medial prefrontal cortex are activated by reward processing in separable phases of decision-making cognition Biol. Psychiatry 55 6 2004 594 602
102. J.D. Roitman, and M.N. Shadlen Response of neurons in the lateral intraparietal area during a combined visual discrimination reaction time task J. Neurosci. 22 21 2002 9475 9489
103. E.T. Rolls The orbitofrontal cortex and reward Cereb. Cortex 10 2000 284 294
104. Y. Rottenstreich, and C.K. Hsee Money, kisses, and electric shocks: on the affective psychology of risk Psychol. Sci. 12 3 2001 185 190
105. Y. Rottenstreich, and S. Shu Nine affect-based decision phenomena Nigel Harvey Derek Koehler Handbook of judgment and decision making 2004 Blackwell Malden, MA 444 463
106. W. Samuelson, and R. Zeckhauser Status quo bias in decision making J. Risk Uncertain. 1 1988 7 59
107. L.J. Savage The foundations of statistics 1954 Wiley New York
108. W. Schultz Predictive reward signal of dopamine neurons J. Neurophysiol. 80 1 1998 1 27
109. M.N. Shadlen, and W.T. Newsome Neural basis of a perceptual decision in the parietal cortex (area LIP) of the rhesus monkey J. Neurophysiol. 86 4 2001 1916 1936
110. D. Shohamy, C.E. Myers, S. Grossman, J. Sage, M.A. Gluck, and R.A. Poldrack Cortico-striatal contributions to feedback-based learning: converging data from neuroimaging and neuropsychology Brain 127 Pt. 4 2004 851 859
111. S.A. Sloman The empirical case for two systems of reasoning Psychol. Bull. 119 1996 3 22
112. P. Slovic Perception of risk Science 236 4799 1987 280 285
113. P. Slovic, M. Finucane, E. Peters, and D. MacGregor The affect heuristic T. Gilovich D. Griffin D. Kahneman Heuristics of intuitive judgment: extensions and applications 2002 Cambridge Univ. Press New York 217 229
114. L.H. Snyder, A.P. Batista, and R.A. Andersen Coding of intention in the posterior parietal cortex Nature 386 6621 1997 167 170
115. S.M. Southwick, J.D. Bremner, A. Rasmusson, C.A. Morgan III, A. Arnsten, and D.S. Charney Role of norepinephrine in the pathophysiology and treatment of posttraumatic stress disorder Biol. Psychiatry 46 9 1999 1192 1204
116. K.E. Stanovich Who is rational? Studies of individual differences in reasoning 1999 Erlbaum Mahwah, NJ
117. L.P. Sugrue, G.S. Corrado, and W.T. Newsome Matching behavior and the representation of value in the parietal cortex Science 304 5678 2004 1782 1787
118. R.H. Thaler Mental accounting and consumer choice Mark. Sci. 4 1985 199 214
119. R.H. Thaler Mental accounting matters J. Behav. Decis. Mak. 12 1999 183 206
120. R.H. Thaler, and E.J. Johnson Gambling with the house money and trying to break even: the effects of prior outcomes on risky choice Manage. Sci. 36 1990 643 660
121. E.M. Tricomi, M.R. Delgado, and J.A. Fiez Modulation of caudate activity by action contingency Neuron 41 2 2004 281 292
122. A. Tversky, and C.R. Fox Weighing risk and uncertainty Psychol. Rev. 102 1995 269 283
123. A. Tversky, and D. Kahneman Advances in prospect theory cumulative representation of uncertainty J. Risk Uncertain. 5 4 1992 297 323
124. J. von Neumann, and O. Morgenstern Theory of games and economic behavior 1944 Princeton Univ. Press Princeton, NJ
125. B.M. Wagar, and P. Thagard Spiking Phineas Gage: a neurocomputational theory of cognitive-affective integration in decision making Psychol. Rev. 111 1 2004 67 79
126. P.P. Wakker Testing and characterizing properties of nonadditive measures through violations of the sure-thing principle Econometrica 69 4 2001 1039 1059
127. E.U. Weber, S. Shafir, and A.-R. Blais Predicting risk sensitivity in humans and lower animals: risk as variance or coefficient of variation Psychol. Rev. 111 2004 430 445
128. G. Wu, and R. Gonzalez Curvature of the probability weighting function Manage. Sci. 42 1996 1676 1690
129. G. Wu, and R. Gonzalez Common consequence conditions in decision making under risk J. Risk Uncertain. 16 1 1998 115 139
130. N. Yeung, and A.G. Sanfey Independent coding of reward magnitude and valence in the human brain J. Neurosci. 24 28 2004 6258 6264
131. C.F. Zink, G. Pagnoni, M.E. Martin-Skurski, J.C. Chappelow, and G.S. Berns Human striatal responses to monetary reward depend on saliency Neuron 42 3 2004 509 517