A Neuroeconomic Theory of Mental Time Travel

We propose a theoretical model that places attention at the center of mental time travel (MTT) ability. This theory predicts that attention promotes a memory-based process that encodes memories of unexpected events, facilitates accurate recollection of information of such events during MTT, and optimizes subsequent decision-making. This process coexists with a habitual process that governs all other events and treats them equally. Our theory demonstrates that the memory-based process is useful when the environment features novel experiences that are likely to be relevant in future decision-making, hence worth remembering accurately. By contrast, the habitual process is optimal in environments that either do not change significantly, or have a small chance of being repeated in the future. This may explain why the ability to mentally travel in time has developed differently in humans than in other species. Implications are discussed in the context of decision-making

Resource allocation in the brain

When an individual performs several tasks simultaneously, processing resources must be allocated to different brain systems to produce energy for neurons to fire. Following the evidence from neuroscience, we model the brain as an organization in which a coordinator allocates limited resources to the brain systems responsible for the different tasks. Systems are privately informed about the amount of resources necessary to perform their task and compete to obtain the resources. The coordinator arbitrates the demands while satisfying the resource constraint. We show that the optimal mechanism is to impose to each system with privately known needs a cap in resources that depends negatively on the amount of resources requested by the other system. This allocation can be implemented using a biologically plausible mechanism. Finally, we provide some implications of our theory: (i) performance can be flawless for sufficiently simple tasks, (ii) the dynamic allocation rule exhibits inertia (current allocations are increasing in past needs), and (iii) different cognitive tasks are performed by different systems only if the tasks are sufficiently important

Information Gatekeepers: Theory and Experimental Evidence

We consider a model where two adversaries can spend resources in acquiring public information about the unknown state of the world in order to influence the choice of a decision maker. We characterize the sampling strategies of the adversaries in the equilibrium of the game. We show that, as the cost of information acquisition for one adversary increases, that person collects less evidence whereas the other adversary collects more evidence. We then test the results in a controlled laboratory setting. The behavior of subjects is close to the theoretical predictions. Mistakes are relatively infrequent (15%). They occur in both directions, with more over-sampling (39%) than under-sampling (8%). The main difference with the theory is the smooth decline in sampling around the theoretical equilibrium. Comparative statics are also consistent with the theory, with adversaries sampling more when their own cost is low and when the other adversary’s cost is high. Finally, there is little evidence of learning over the 40 matches of the experiment