neuroeconomics

Question 1

what are the methods used to study decision-making in neuroscience?

Answer 1

brain scanning and animal models;
microeconomic behavior (valuation, decision-making, games);
macroeconomic behavior (conformity, markets, politics)

Question 2

what is the concept of utility and how to measure it?

Answer 2

property of an object

measurement of utility: 
experimental utility = pleasure; 
decision utility (classical econ approach): forced choice, willingness to pay or neurobiological measures (downside: can’t interpret the fMRI by itself, need to go back to other methods)

Question 3

explain the expected utility theory (EUT)

Answer 3

E(A)=u(o1)⋅Pr(o1)+u(o2)⋅Pr(o2)+…u(on)⋅Pr(on). Choices should maximize the expected utility

Question 4

explain the prospect theory and draw graph to demonstrate it

Answer 4

problems with EUT is that rich people don’t care utility, which is not true

prospect theory: loss aversion, overweighting (low probability) and underweighting (for high probability)

For graphs, check the slides

Question 5

explain the Schultz’s experiment that show the function of dopamine

Answer 5

case 1: no CS + R - spiking at R
case 2: CS + R - spiking at CS
case 3: CS + no R

spiking at CS and miss of spiking at R) - systems responding to (time of) expectations)

conclusion: dopamine indicating anticipation, not pleasure

Question 6

four experiments related to fMRI for goods

Answer 6

1. monetary value (MID paradigm) - anticipation vs NAc
2. beautiful faces
3. mutual cooperation: OTC for money currency
4. monetary vs social reward (overlapping)

Question 7

experiments related to fMRI for bads

Answer 7

definition of pain: intensity of stimulation (physical sensation, recruitment of pain sensors); attention to body part; visceral/emotional/anticipatory responses

loss aversion: potential gain vs potential loss (gain is twice of loss, heat map) in striatum and ventromedial prefrontal cortex - gradient from bottom left to upper right - striatum involves both reward and punishment information (questionable)

Question 8

explain the prisoner’s dilemma

Answer 8

check the slides