Tobias Kalenscher

Is a bird in the hand worth two in the future? The neuroeconomics of intertemporal decision-making.

When making intertemporal decisions, i.e., decisions between outcomes occurring at different instants in time, humans and animals prefer rewards with short-term availability over rewards that become available in the long run. Discounted utility theory (DUT) is an influential normative model for intertemporal decisions that attempts to capture preference over time. It prescribes which is the best decision to take with respect to consistent, coherent and optimal choice. Over the last few decades, DUTs descriptive validity has been critically challenged. Empirical studies found systematic violations of several of DUTs assumptions, including time-consistency of preferences, stationarity, constant discounting and utility maximisation. To account for these anomalies, alternative models have been devised in various academic disciplines, including economics, psychology, biology, philosophy, and most lately, cognitive neuroscience. This article reviews the most recent literature on the behavioural and neural processes underlying intertemporal choices, and elucidates to which extent these findings can be used to explain violations of DUTs assumptions. In the first three sections, DUT is introduced, and behavioural anomalies are discussed. The fourth part focuses on the neuroscience of intertemporal choice, including its functional neuroanatomy, attempts to find a discounted value signal in the brain, and recent efforts to identify neural mechanisms producing time-inconsistencies. In the last section, the computational literature on neural learning mechanisms is reviewed. Then, a new, biologically plausible computational model of intertemporal choice is proposed that is able to explain many of the behavioural anomalies. The implications of these results help to understand why humans and animals frequently decide irrationally and to their long-term economic disadvantage, and which neural mechanisms underly such decisions.

Restricting temptations: neural mechanisms of precommitment.

Summary Humans can resist temptations by exerting willpower, the effortful inhibition of impulses. But willpower can be disrupted by emotions and depleted over time. Luckily, humans can deploy alternative self-control strategies like precommitment, the voluntary restriction of access to temptations. Here, we examined the neural mechanisms of willpower and precommitment using fMRI. Behaviorally, precommitment facilitated choices for large delayed rewards, relative to willpower, especially in more impulsive individuals. While willpower was associated with activation in dorsolateral prefrontal cortex (DLPFC), posterior parietal cortex (PPC), and inferior frontal gyrus, precommitment engaged lateral frontopolar cortex (LFPC). During precommitment, LFPC showed increased functional connectivity with DLPFC and PPC, especially in more impulsive individuals, and the relationship between impulsivity and LFPC connectivity was mediated by value-related activation in ventromedial PFC. Our findings support a hierarchical model of self-control in which LFPC orchestrates precommitment by controlling action plans in more caudal prefrontal regions as a function of expected value.

Social discounting involves modulation of neural value signals by temporoparietal junction

Significance People often consider the well-being of others. However, they are more likely to be generous toward individuals they feel close to than to those they only meet sporadically. Using neuroimaging tools, we show that the decline in generosity across social distance is realized by the interplay of two brain structures—the ventromedial prefrontal cortex coding the relative appeal of a selfish or a generous option, and the temporoparietal junction modulating appeal signals of the generous outcome, depending on social distance between participant and beneficiary. Based on these findings, we developed a biologically plausible model explaining social discounting in particular, and prosocial behavior in general. Our study opens up new avenues to understand and tackle frictions arising in social networks. Most people are generous, but not toward everyone alike: generosity usually declines with social distance between individuals, a phenomenon called social discounting. Despite the pervasiveness of social discounting, social distance between actors has been surprisingly neglected in economic theory and neuroscientific research. We used functional magnetic resonance imaging (fMRI) to study the neural basis of this process to understand the neural underpinnings of social decision making. Participants chose between selfish and generous alternatives, yielding either a large reward for the participant alone, or smaller rewards for the participant and another individual at a particular social distance. We found that generous choices engaged the temporoparietal junction (TPJ). In particular, the TPJ activity was scaled to the social-distance–dependent conflict between selfish and generous motives during prosocial choice, consistent with ideas that the TPJ promotes generosity by facilitating overcoming egoism bias. Based on functional coupling data, we propose and provide evidence for a biologically plausible neural model according to which the TPJ supports social discounting by modulating basic neural value signals in the ventromedial prefrontal cortex to incorporate social-distance–dependent other-regarding preferences into an otherwise exclusively own-reward value representation.

Reward-Associated Gamma Oscillations in Ventral Striatum Are Regionally Differentiated and Modulate Local Firing Activity

Oscillations of local field potentials (LFPs) in the gamma range are found in many brain regions and are supposed to support the temporal organization of cognitive, perceptual, and motor functions. Even though gamma oscillations have also been observed in ventral striatum, one of the brains most important structures for motivated behavior and reward processing, their specific function during ongoing behavior is unknown. Using a movable tetrode array, we recorded LFPs and activity of neural ensembles in the ventral striatum of rats performing a reward-collection task. Rats were running along a triangle track and in each round collected one of three different types of rewards. The gamma power of LFPs on subsets of tetrodes was modulated by reward-site visits, discriminated between reward types, between baitedness of reward locations and was different before versus after arrival at a reward site. Many single units in ventral striatum phase-locked their discharge pattern to the gamma oscillations of the LFPs. Phase-locking occurred more often in reward-related than in reward-unrelated neurons and LFPs. A substantial number of simultaneously recorded LFPs correlated poorly with each other in terms of gamma rhythmicity, indicating that the expression of gamma activity was heterogeneous and regionally differentiated. The orchestration of LFPs and single-unit activity by way of gamma rhythmicity sheds light on the functional architecture of the ventral striatum and the temporal coordination of ventral striatal activity for modulating downstream areas and regulating synaptic plasticity.

Time-dependent changes in altruistic punishment following stress

Decisions are rarely made in social isolation. One phenomenon often observed in social interactions is altruistic punishment, i.e. the punishment of unfair behavior by others at a personal cost. The tendency for altruistic punishment is altered by affective states including those induced by stress exposure. Stress is thought to exert bi-directional effects on behavior: immediately after stress, reflex-like and habitual behavior is promoted while later on more far-sighted, flexible and goal-directed behavior is enhanced. We hypothesized that such time-dependent effects of stress would also be present in the context of altruistic punishment behavior. Healthy male participants (N=80) were exposed to either a grouped stress test or a control condition. Participants were tested in prosocial decision making tasks either directly after stress or 75 min later. Altruistic punishment was assessed using the Ultimatum Game. General altruism was assessed with a one-shot version of the Dictator Game in which an anonymous donation could be offered to a charitable organization. We found that stress caused a bi-directional effect on altruistic punishment, with decreased rejection rates in the late aftermath of stress in response to ambiguous 30% offers. In the Dictator Game, stressed participants were less generous than controls, but no time-dependent effect was observed, indicating that the general reward sensitivity remained unchanged at various time-points after stress. Overall, during the late aftermath after acute stress exposure (i.e. 75 min later), participants acted more consistent with their own material self-interest, and had a lower propensity for altruistic punishment, possibly through upregulation of cognitive self-control mechanisms. Thus, our findings underscore the importance of time as a factor in simple, real-life economic decisions in a stressful social context.

Integrating early results on ventral striatal gamma oscillations in the rat

A vast literature implicates the ventral striatum in the processing of reward-related information and in mediating the impact of such information on behavior. It is characterized by heterogeneity at the local circuit, connectivity, and functional levels. A tool for dissecting this complex structure that has received relatively little attention until recently is the analysis of ventral striatal local field potential oscillations, which are more prominent in the gamma band compared to the dorsal striatum. Here we review recent results on gamma oscillations recorded from freely moving rats. Ventral striatal gamma separates into distinct frequency bands (gamma-50 and gamma-80) with distinct behavioral correlates, relationships to different inputs, and separate populations of phase-locked putative fast-spiking interneurons. Fast switching between gamma-50 and gamma-80 occurs spontaneously but is influenced by reward delivery as well as the application of dopaminergic drugs. These results provide novel insights into ventral striatal processing and highlight the importance of considering fast-timescale dynamics of ventral striatal activity.

Why we should use animals to study economic decision making - a perspective

Despite the rich tradition in psychology and biology, animals as research subjects have never gained a similar acceptance in microeconomics research. With this article, we counter this trend of negligence and try to convey the message that animal models are an indispensible complement to the literature on human economic decision making. This perspective review departs from a description of the similarities in economic and evolutionary theories of human and animal decision making, with particular emphasis on the optimality aspect that both classes of theories have in common. In a second part, we outline that actual, empirically observed decisions often do not conform to the normative ideals of economic and ecological models, and that many of the behavioral violations found in humans can also be found in animals. In a third part, we make a case that the sense or nonsense of the behavioral violations of optimality principles in humans can best be understood from an evolutionary perspective, thus requiring animal research. Finally, we conclude with a critical discussion of the parallels and inherent differences in human and animal research.

A friend in need: Time-dependent effects of stress on social discounting in men.

Stress is often associated with a tend-and-befriend response, a putative coping mechanism where people behave generously towards others in order to invest in social relationships to seek comfort and mutual protection. However, this increase in generosity is expected to be directed only towards a delimited number of socially close, but not distant individuals, because it would be maladaptive to befriend everyone alike. In addition, the endocrinological stress response follows a distinct temporal pattern, and it is believed that tend-and-befriend tendencies can be observed mainly under acute stress. By contrast, the aftermath (>1h after) of stress is associated with endocrinological regulatory processes that are proposed to cause increased executive control and reduced emotional reactivity, possibly eliminating the need to tend-and-befriend. In the present experiment, we set out to investigate how these changes immediately and >1h after a stressful experience affect social-distance-dependent generosity levels, a phenomenon called social discounting. We hypothesized that stress has a time-dependent effect on social discounting, with decisions made shortly after (20min), but not 90min after stress showing increased generosity particularly to close others. We found that men tested 20min after stressor onset indeed showed increased generosity towards close but not distant others compared to non-stressed men or men tested 90min after stressor onset. These findings contribute to our understanding on how stress affects prosocial behavior by highlighting the importance of social closeness and the timing of stress relative to the decision as modulating factors in this type of decision making in men.

No effects of psychosocial stress on intertemporal choice.

Intertemporal choices - involving decisions which trade off instant and delayed outcomes - are often made under stress. It remains unknown, however, whether and how stress affects intertemporal choice. We subjected 142 healthy male subjects to a laboratory stress or control protocol, and asked them to make a series of intertemporal choices either directly after stress, or 20 minutes later (resulting in four experimental groups). Based on theory and evidence from behavioral economics and cellular neuroscience, we predicted a bidirectional effect of stress on intertemporal choice, with increases in impatience or present bias immediately after stress, but decreases in present bias or impatience when subjects are tested 20 minutes later. However, our results show no effects of stress on intertemporal choice at either time point, and individual differences in stress reactivity (changes in stress hormone levels over time) are not related to individual differences in intertemporal choice. Together, we did not find support for the hypothesis that psychosocial laboratory stressors affect intertemporal choice.

Brain stimulation reveals crucial role of overcoming self-centeredness in self-control

Self-control in intertemporal choice requires overcoming self-centeredness, a function typically associated with social decisions. Neurobiological models of self-control predominantly focus on the role of prefrontal brain mechanisms involved in emotion regulation and impulse control. We provide evidence for an entirely different neural mechanism that promotes self-control by overcoming bias for the present self, a mechanism previously thought to be mainly important for interpersonal decision-making. In two separate studies, we show that disruptive transcranial magnetic stimulation (TMS) of the temporo-parietal junction—a brain region involved in overcoming one’s self-centered perspective—increases the discounting of delayed and prosocial rewards. This effect of TMS on temporal and social discounting is accompanied by deficits in perspective-taking and does not reflect altered spatial reorienting and number recognition. Our findings substantiate a fundamental commonality between the domains of self-control and social decision-making and highlight a novel aspect of the neurocognitive processes involved in self-control.