Neuroscientists Examine Human Response to Economic Risk


by Kathlyn Stone

November, 2007

Building on economics research that has examined game theory and risk-based decision-making, scientists are applying their observations of brain activity to the new field of “neuroeconomics.” Their findings could be applied to treatments for brain disorders, as well as computer science, advertising and communication, and public policy and the law.

Medical imaging tools allow researchers to measure changes in the brain while subjects undergo behavioral experiments or play games developed by mathematicians and used by economists and others to study human cooperation and conflict. Some neuroscientists believe research models based on game theory will lead to improved treatment of psychiatric disorders.

Both animal and human studies during the past decade have helped shed light on how and why people make the financial decisions they do, said Paul Glimcher of New York University, who moderated a briefing on neuroeconomic studies unveiled at the Society for Neuroscience annual meeting.

"Ten years ago, we knew almost nothing about how the human brain weighed costs and benefits to arrive at a choice,” he said. “Today, there are exciting new discoveries every year.”

In a study called “Thinking like a trader,” researcher Peter Sokol-Hessner, also of New York University, used magnetic resonance imaging to monitor the brain activity of 20 participants while they responded to different investment situations. Participants were given two series of 150 choices on how to spend $30. They could choose either to make an investment gamble or settle with a guaranteed amount. For example, they could decide to take a chance on winning $25 or losing $16, or they could choose to break even.

Sokol-Hessner found evidence that emotions play a role in choice: aversion to loss corresponded with activity in the amygdala, an area of the brain that also processes emotions. In addition, researchers observed that subjects sweat significantly more when losing than when winning.

"This contrasted with previous research, which associated valuation and decision-making with activity in the striatum and medial prefrontal cortex,” said Sokol-Hessner. The striatum and medial prefrontal cortex have both been associated with reward-seeking behavior in animals and humans.

Participants in the study took more risks when they were asked to “think like a trader” and evaluate each choice as if they were making an investment decision for a portfolio instead of a personal win or loss. This was true even among the half of participants who showed a tendency to avoid losses.

"This kind of research has great promise to extend our understanding of how people make decisions and of how they can reliably alter the mechanisms of their own decision-making by taking alternate perspectives on the same choices," said Sokol-Hessner.

Serotonin and Reward

Other studies are focusing on chemical changes in the brain that affect decision-making in a social context. Researchers are studying serotonin, a neurotransmitter that is believed to play a central role in regulating mood and is the focal treatment point for many psychiatric disorders.

Zachary Mainen of Cold Spring Harbor Laboratory said serotonin is an enigma involved in many aspects of human behavior. He went to serotonin’s source: the raphe nucleus area in the brain stem. In the study, rats were presented with scents and choices on how to react to them, and then were rewarded when they made the “right” choice. Mainen monitored the activity of the rats’ individual nerve cells in the dorsal raphe nucleus region.

He found that separate subsets of neurons responded independently to smelling, movement, and reward-related behaviors. In most cases, the nerve cells fired almost immediately—within tens of milliseconds.

Mainen also noticed that raphe nucleus nerve cells fired more when the animal had to ignore distracting sensory information and stopped firing when the rat was concentrating on important sensory signals, underscoring a role for serotonin in the feedback loop that adjusts the brain's response to sensory stimulation in healthy individuals.

The research revealed that the release of serotonin is “an extremely rich and precisely timed activity” tuned to the intricacies of reward-related behavior, Mainen said, adding that such knowledge could be the basis for developing better medications, with fewer side effects, for psychiatric disorders.

"These results suggest a specific cellular basis for the diversity of serotonin functions and possible avenues for development of more specific treatments for disorders such as major depression," he said.

Other research using gaming experiments has shown the release of serotonin during games that involve decision-making, rewards and social interaction.

In human studies led by Robert Rogers of Oxford University, researchers altered serotonin levels in half of the subjects and then evaluated the effect of this alteration on participants' behavior during the prisoner’s dilemma game. Participants in the game make choices that affect each other: One might cooperate with his partner to maximize joint reward or exploit his partner’s cooperation to get all of the partner’s money.

Working with pairs of subjects, Rogers temporarily blocked l-tryptophan (the precursor of serotonin) in some participants through dietary changes, effectively reducing serotonin levels. As a result, game participants became less willing to cooperate with each other. Lower serotonin levels also negatively affected the subjects' judgment of others.

Rogers suggests that reduced serotonin levels "diminished the reward value of cooperative behavior."

Such findings suggest a possible role for the prisoner's dilemma and other game-theory models in the study of psychiatric disorders. Indeed, Glimcher believes that neuroeconomic research will influence not only future financial markets but also clinical strategies for treating mental illness.