The role of «perceived loss» aversion on credit screening: an experiment

A major characteristic of credit markets is information asymmetry.To combat its problems, as credit rationing, principals can use a menu of contracts to screen clients with different risk level. We conduct a laboratory experiment to address an important question for such settings —does the framing of the offered menu of contracts interfere with the self-selection mechanism? The answer is yes. We find subjects' choices shift when the same (positive) outcomes of the same menu of contracts are presented in two different frames. Subjects exhibit loss aversion in their perception of the positive outcomes below the reference point, and self-selection fails to occur.Uno de los mayores problemas actuales es el racionamiento del crédito, derivado funda- mentalmente de las asimetrías informativas. Para disminuir las asimetrías informativas, los bancos pueden aplicar «screening». Esto es, pueden ofrecer a sus clientes un menú de contratos y, dependien- do de la elección de éstos, inferir su nivel de riesgo. Si las elecciones de los clientes de alto riesgo y de bajo riesgo difieren entre sí, hay autoselección de clientes y, por tanto, «screening». En este artículo presentamos un experimento que examina una cuestión esencial en estos contextos —¿Interfiere el punto de referencia de los clientes en su autoselección?— La respuesta es sí. De hecho, las elecciones cambian cuando los mismos datos (positivos) de los mismos contratos se presentan con una referen- cia diferente. Por ello, proponemos una aproximación teórica derivada de la «Prospect Theory» para explicar nuestros resultados. Observamos una aversión a las pérdidas percibidas que hace fracasar la autoselección

Effects of social context and predictive relevance on action outcome monitoring

Outcome monitoring is crucial for subsequent adjustments in behavior and is associated with a specific electrophysiological response, the feedback-related negativity (FRN). Besides feedback generated by one's own action, the performance of others may also be relevant for oneself, and the observation of outcomes for others' actions elicits an observer FRN (oFRN). To test how these components are influenced by social setting and predictive value of feedback information, we compared event-related potentials, as well as their topographies and neural generators, for performance feedback generated by oneself and others in a cooperative versus competitive context. Our results show that (1) the predictive relevance of outcomes is crucial to elicit an FRN in both players and observers, (2) cooperation increases FRN and P300 amplitudes, especially in individuals with high traits of perspective taking, and (3) contrary to previous findings on gambling outcomes, oFRN components are generated for both cooperating and competing observers, but with smaller amplitudes in the latter. Neural source estimation revealed medial prefrontal activity for both FRN and oFRN, but with additional generators for the oFRN in the dorsolateral and ventral prefrontal cortex, as well as the temporoparietal junction. We conclude that the latter set of brain regions could mediate social influences on action monitoring by representing agency and social relevance of outcomes and are, therefore, recruited in addition to shared prediction error signals generated in medial frontal areas during action outcome observatio

Sharing the Fruit of Labor: Flexible Application of Justice Principles in an Ultimatum Game with Joint-Production

Individuals often need to negotiate how to distribute jointly produced goods—equally (e.g., 50:50) or equitably (e.g., proportionally to their contributions). We examined whether people have stable preferences, or whether they switch between equality and equity in different situations. Pairs of anonymous participants first produced a common pie, and then distributed it in an ultimatum game. Results suggest that individuals apply different justice principles depending on their contribution. When they produced less than 50%, proposers divided the pie equally. However, when they produced more than 50%, their offers fell between equality and equity. Responders' ratings of fairness and satisfaction varied similarly; with low production, equality was preferred, whereas with high production, equity was preferred. Nevertheless, equal and equitable offers were generally accepted, and only outright unfair offers were rejected. This suggests that individuals are relatively flexible about which justice principle should be applied, but punish proposers whose offers violate both principle

Disrupting Pre-SMA Activity Impairs Facial Happiness Recognition: An Event-Related TMS Study

It has been suggested that the left pre-supplementary motor area (pre-SMA) could be implicated in facial emotion expression and recognition, especially for laughter/happiness. To test this hypothesis, in a single-blind, randomized crossover study, we investigated the impact of transcranial magnetic stimulation (TMS) on performances of 18 healthy participants during a facial emotion recognition task. Using a neuronavigation system based on T1-weighted magnetic resonance imaging of each participant, TMS (5 pulses, 10 Hz) was delivered over the pre-SMA or the vertex (control condition) in an event-related fashion after the presentation of happy, fear, and angry faces. Compared with performances during vertex stimulation, we observed that TMS applied over the left pre-SMA specifically disrupted facial happiness recognition (FHR). No difference was observed between the 2 conditions neither for fear and anger recognition nor for reaction times (RT). Thus, interfering with pre-SMA activity with event-related TMS after stimulus presentation produced a selective impairment in the recognition of happy faces. These findings provide new insights into the functional implication of the pre-SMA in FHR, which may rely on the mirror properties of pre-SMA neuron

Cognitive alterations in patients with non-affective psychotic disorder and their unaffected siblings and parents

Meijer J, Simons CJP, Quee PJ, Verweij K, GROUP Investigators. Cognitive alterations in patients with non-affective psychotic disorder and their unaffected siblings and parents

Abnormal cognition, sleep, EEG and brain metabolism in a novel knock-in Alzheimer mouse, PLB1

Peer reviewedPublisher PD