Decision making

Question 1

Expected value

Answer 1

• Average outcome if a scenario is repeated many times
• Calculated using probabilities and values of possible
  outcomes
• To maximize average outcome, choose option with the greatest expected value
• Difficult to apply for non-monetary decisions
• Doesn’t explain actual choices by actual people

Question 2

Prospect Theory (Kahneman & Tversky, 1979)

Answer 2

• People do not make decisions based on expected values, probabilities, and absolute outcomes.
• People make decisions based on subjective utility, decision weights, and relative outcomes

Question 3

Subjective utililty

Answer 3

• People transform objective value into subjective
  utility
  ● Utility = usefulness or
  desirability of an outcome

Question 4

Diminishing marginal utility

Answer 4

• Subjective utility increases more slowly than objective
  value, especially at large values
• $10 is subjectively worth twice as much as $5, but $10,000,000 is not subjectively worth twice as much as $5,000,000
• Individual differences: Bill Gates vs. me

Question 5

Loss aversion

Answer 5

• Losses loom larger than gains
• Losing $20 feels worse than winning $20 feels good
• Individual differences in sensitivity to loss

Question 6

Decision weight

Answer 6

• People transform objective probability into
  subjective decision weights
• Small probabilities (but greater than 0%) are overweighted
  ● 1% feels like much more than 0%
  ● 51% feels about the same as 50%
• Large probabilities (but less than 100%) are underweighted
  ● 99% feels like a lot less than 100%
  ● 50% feels about the same as 51%

Question 7

Reference dependence (Framing effect)

Answer 7

• People make decisions based on gains and losses relative to a point of reference, not based on
  absolute outcomes.
• Changing the way a question is asked to create a different point of reference leads to different
  valuations and thus different choices.

Question 8

Reward prediction error (RPE)

Answer 8

RPE = Actual Reward - Expected Reward
RPE > 0 (Better than expected)
RPE = 0 (As expected)
RPE < 0 (Worse than expected)

Question 9

Dopamine & reinforcement learning

Answer 9

• We are continuously predicting
  expected future reward
• We take actions to maximize future reward
• When we receive information that violates our expectations,
  it generates a reward prediction error
• As a result, we update our predictions, which may alter our actions

Question 10

Dopamine pathways in human brain

Answer 10

• Mindbrain dopamine neurons project to basal ganglia, prefrontal cortex, and many other areas

Question 11

Schultz, Dayan, & Montague (1997)

Answer 11

• Task: Monkey must touch lever when light appears to receive drops of juice
• Before learning: Dopamine neurons are activated after the delivery of reward
• After training: onset of light causes a phasic burst of activity in
  dopamine neurons
• After training: Dopamine neurons decrease firing for short period of time, so activity is lower than baseline

Question 12

Reinforcement learning & addiction

Answer 12

• Opioids physiologically trigger the release of dopamine
• This is misinterpreted as a reward prediction error signal
• Thus, opioids “hijack” the reinforcement learning mechanism

Question 13

Iowa gambling task

Answer 13

• Goal: win as much money as possible
• Compared control participants and patients with damage to Ventromedial Prefrontal Cortex
• Patients with damage to VMPFC could not generate expected emotions
  -Patients with tend to pick from the “bad” decks throughout the session, because the draw of the large wins isn’t cancelled out by anticipatory feelings of dread about the potential for large losses
• Patients overemphasized immediate reward over long-term outcomes (temporal discounting)

Question 14

Prefrontal cortex functions

Answer 14

• All central to decision making
  and the selection of actions
• Maintenance and updating of
  goals
• Inhibition of prepotent actions
• Shifting between rules, sets,
  and tasks
• Monitoring and adjusting
  performance
• Integrating multiple sources of
  value

Question 15

Rostral and caudal prefrontal cortex

Answer 15

• Rostral: Complex, abstract, long timeframe
• Caudal: Simple, concrete, short timeframe

Question 16

Ventral or dorsal PFC

Answer 16

• Ventral: Meaning oriented, what and why
• Dorsal: Action oriented, how and where

Question 17

Medial or lateral PFC

Answer 17

• Medial
  ● Hot/affective/motivation
  ● Value-based
  ● Internal/body-oriented
• Lateral PFC
  ● Cold/cognitive/rules
  ● Feature-based
  ● External/environment-oriented