Neural Substrates of Decision-Making in Economic Games

In economic experiments decisions often differ from game-theoretic predictions. Why are people generous in one-shot ultimatum games with strangers? Is there a benefit to generosity toward strangers? Research on the neural substrates of decisions suggests that some choices are hormone-dependent. By artificially stimulating subjects with neuroactive hormones, we can identify which hormones and brain regions participate in decisionmaking, to what degree and in what direction. Can a hormone make a person generous while another stingy? In this paper, two laboratory experiments are described using the hormones oxytocin (OT) and arginine vasopressin (AVP). Concentrations of these hormones in the brain continuously change in response to external stimuli. OT enhances trust (Michael Kosfeld et al. 2005b), reduce fear from strangers (C. Sue Carter 1998), and has anti-anxiety effects (Kerstin Uvnäs-Moberg, Maria Peterson 2005). AVP enhances attachment and bonding with kin in monogamous male mammals (Jennifer N. Ferguson et al. 2002) and increases reactive aggression (C. Sue Carter 2007). Dysfunctions of OT and/or AVP reception have been associated with autism (Miranda M. Lim et al. 2005). In Chapter One I review past experiments with the ultimatum (UG) and dictator (DG) games and visit some of the major results in the literature. In Chapter Two I present the results of my laboratory experiment where I examine why people are generous in one-shot economic games with strangers. I hypothesize that oxytocin would enhance generosity in the UG. Players in the OT group were much more generous than those in the placebo—OT offers in the UG were 80% higher than offers on placebo. Enhanced generosity was not due to altruism as there was no effect on DG offers. This implies that other-regarding preferences are at play in the amount of money sent but only in a reciprocal context. The third chapter presents an experiment on punishment. I hypothesized that AVP would increase rejections and stinginess in the UG and TG. Results show that AVP affects rejections and stinginess in small groups but not in large ones. Chapter Four contains the summary of future research suggestions.Oxytocin; Vasopressin; ultimatum game; dictator game; trust game; generosity; altruism

The role of social cognition in decision making

Successful decision making in a social setting depends on our ability to understand the intentions, emotions and beliefs of others. The mirror system allows us to understand other people's motor actions and action intentions. ‘Empathy’ allows us to understand and share emotions and sensations with others. ‘Theory of mind’ allows us to understand more abstract concepts such as beliefs or wishes in others. In all these cases, evidence has accumulated that we use the specific neural networks engaged in processing mental states in ourselves to understand the same mental states in others. However, the magnitude of the brain activity in these shared networks is modulated by contextual appraisal of the situation or the other person. An important feature of decision making in a social setting concerns the interaction of reason and emotion. We consider four domains where such interactions occur: our sense of fairness, altruistic punishment, trust and framing effects. In these cases, social motivations and emotions compete with each other, while higher-level control processes modulate the interactions of these low-level biases

The evolution of leader-follower reciprocity: The theory of service-for-prestige

Copyright © 2014 Price and Van Vugt. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.This article has been made available through the Brunel Open Access Publishing Fund.We describe the service-for-prestige theory of leadership, which proposes that voluntary leader–follower relations evolved in humans via a process of reciprocal exchange that generated adaptive benefits for both leaders and followers. We propose that although leader–follower relations first emerged in the human lineage to solve problems related to information sharing and social coordination, they ultimately evolved into exchange relationships whereby followers could compensate leaders for services which would otherwise have been prohibitively costly for leaders to provide. In this exchange, leaders incur costs to provide followers with public goods, and in return, followers incur costs to provide leaders with prestige (and associated fitness benefits). Because whole groups of followers tend to gain from leader-provided public goods, and because prestige is costly for followers to produce, the provisioning of prestige to leaders requires solutions to the “free rider” problem of disrespectful followers (who benefit from leader services without sharing the costs of producing prestige). Thus service-for-prestige makes the unique prediction that disrespectful followers of beneficial leaders will be targeted by other followers for punitive sentiment and/or social exclusion. Leader–follower relations should be more reciprocal and mutually beneficial when leaders and followers have more equal social bargaining power. However, as leaders gain more relative power, and their high status becomes less dependent on their willingness to pay the costs of benefitting followers, service-for-prestige predicts that leader–follower relations will become based more on leaders’ ability to dominate and exploit rather than benefit followers. We review evidential support for a set of predictions made by service-for-prestige, and discuss how service-for-prestige relates to social neuroscience research on leadership

A Behavioral Account of the Labor Market: The Role of Fairness Concerns

In this paper, we argue that important labor market phenomena can be better understood if one takes (i) the inherent incompleteness and relational nature of most employment contracts and (ii) the existence of reference-dependent fairness concerns among a substantial share of the population into account. Theory shows and experiments confirm, that even if fairness concerns were only to exert weak effects in one-shot interactions, repeated interactions greatly magnify the relevance of such concerns on economic outcomes. We also review evidence from laboratory and field experiments examining the role of wages and fairness on effort, derive predictions from our approach for entry-level wages and incumbent workers' wages, confront these predictions with the evidence, and show that reference-dependent fairness concerns may have important consequences for the effects of economic policies such as minimum wage laws.fairness, contracts, wages, effort, experiments

From the brain to the field: The applications of social neuroscience to economics, health, and law

Social neuroscience aims to understand the biological systems that underlie people’s thoughts, feelings and actions in light of the social context in which they operate. Over the past few decades, social neuroscience has captured the interest of scholars, practitioners, and experts in other disciplines, as well as the general public who more and more draw upon the insights and methods of social neuroscience to explain, predict and change behavior. With the popularity of the field growing, it has become increasingly important to consider the validity of social neuroscience findings as well as what questions it can and cannot address. In the present review article, we examine the contribution of social neuroscience to economics, health, and law, three domains with clear societal relevance. We address the concerns that the extrapolation of neuroscientific results to applied social issues raises within each of these domains, and we suggest guidelines and good practices to circumvent these concerns

Neural Basis of Social and Perceptual Decision-making in Humans

We make decisions in every moment of our lives. How the brain forms those decisions has been an active topic of inquiry in the field of brain science in recent years. In this dissertation, I discuss our recent neuroimaging studies in trying to uncover the functional architecture of the human brain during social and perceptual decision-making processes. Our decisions in social context vary tremendously with many factors including emotion, reward, social norms, treatments from others, cooperation, and dependence to others. We studied the neural basis of social decision-making processes with a functional magnetic resonance imaging (fMRI) experiment using three economic exchange games with undercompensating, nearly equal, and overcompensating offers. Refusals of undercompensating offers recruited the right dorsolateral prefrontal cortex (dlPFC). Accepting of overcompensating offers recruited the brain reward pathway consisting of the caudate, the cingulate cortex, and the thalamus. Protesting of decisions activated the network consisting of the right dlPFC, the left ventrolateral prefrontal cortex, and midbrain in the substantia nigra. These findings suggested that social decisions are the results of coordination between evaluated fairness norms, self-interest, and reward. In the topic of perceptual decision-making, we contributed to answering how diverse cortical structures are involved in relaying and processing of sensory information to make a sense of environment around us. We conducted two fMRI experiments. In the first experiment, we used an audio-visual (AV) synchrony and asynchrony perceptual categorization task. In the second experiment, we used a face-house categorization task. Stimuli in the second experiment included three levels of noise in face and house images. In AV, we investigated the effective connectivity within the salience network consisting of the anterior insulae and anterior cingulate cortex. In face-house, we discovered that the BOLD activity in the dlPFC, the bidirectional connectivity between the fusiform face area (FFA) and the parahippocampal place area (PPA), and the feedforward connectivity from these regions to the dlPFC increased with the noise level – thus with difficulty of decision-making. These results support that the FFA-PPA-dlPFC network plays an important role for relaying and integrating competing sensory information to arrive at perceptual decisions of face and house

Wild Justice - Honor and Fairness Among Beasts at Play

This essay challenges science’s traditional taboo against anthropomorphizing animals or considering their behavior as indicative of feelings similar to human emotions. In their new book Wild Justice: The Moral Lives of Animals, the authors argue that anthropomorphism is alive and well, as it should be. Here they describe some activities of animals, particularly animals at play, as clear signs that they have recognizable emotions and moral intelligence. Based on years of behavioral and cognitive research, the authors discuss in their book that animals exhibit a broad repertoire of moral behaviors, including empathy and cooperation, but here they concentrate on the fairness and trust so essential to any kind of play, animal or human. They contend that underneath this behavior lays a complex range of emotions, backed by a high degree of intelligence and surprising behavioral flexibility. Animals, they find, are incredibly adept social beings. They rely on rules of conduct in their play, just as do humans, which in turn, helps prepare animals for dealing with the intricate social networks that are essential to their survival. The authors conclude that there is no moral gap between humans and other species. As the play of animals helps to make clear, morality is an evolved trait humans unquestionably share with other social mammals

Preferential Treatment Impacts Organizational Commitment: Evidence from Public Universities of Pakistan

Preferential treatment is detrimental. Keeping in view this important perspective, this study intends to capture the impact of preferential treatment via favoritism, nepotism, and cronyism on employee commitment in Public Universities of Pakistan. To seek the objectives of the study 400 questionnaires were distributed to employees of different Public Universities. The findings of the study revealed the negative impact of favoritism, nepotism, and cronyism on employees’ commitment. The results of the study confirmed the moderating role of LMX in the relation between favoritism-organizational commitment as well between nepotism-organizational commitment relation whereas, contrary to expectations LMX did not moderate the relation between cronyism and organizational commitment. Practical implications, limitations as well future directions are discusse

Aberrant Reward Center Response To Partner Reputation During A Social Exchange Game In Generalized Social Phobia

Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/97533/1/da22091.pd