Research
The neural correlates of value representation: From single items to bundles.
Joint with J. Zyuzin, D. Combs, J. Melrose, C. Leather, J.D. Carrillo, J.R. Monterosso, and I. Brocas. Published in 2023 in Human Brain Mapping.
One of the core questions in Neuro-economics is to determine where value is represented. To date, most studies have focused on simple options and identified the ventromedial prefrontal cortex (VMPFC) as the common value region. We report the findings of an fMRI study in which we asked participants to make pairwise comparisons involving options of varying complexity: single items (Control condition), bundles made of the same two single items (Scaling condition) and bundles made of two different single items (Bundling condition). We construct a measure of choice consistency to capture how coherent the choices of a participant are with one another. We also record brain activity while participants make these choices. We find that a common core of regions involving the left VMPFC, the left dorsolateral prefrontal cortex (DLPFC), regions associated with complex visual processing and the left cerebellum track value across all conditions. Also, regions in the DLPFC, the ventrolateral prefrontal cortex (VLPFC) and the cerebellum are differentially recruited across conditions. Last, variations in activity in VMPFC and DLPFC value-tracking regions are associated with variations in choice consistency. This suggests that value based decision-making recruits a core set of regions as well as specific regions based on task demands. Further, correlations between consistency and the magnitude of signal change with lateral portions of the PFC suggest the possibility that activity in these regions may play a causal role in decision quality.
Zyuzin, J., Combs, D., Monterosso, J. R., & Brocas, I. (2023). The neural correlates of value representation: From single items to bundles. Human Brain Mapping, 44(4), 1476-1495.
Heuristic to Bayesian: The evolution of reasoning from childhood to adulthood
Joint with Jori Barash, Isabelle Brocas, and Juan Carrillo. Published in 2019 in the Journal of Economic Behavior & Organization.
In this laboratory experiment, children and teenagers learn the composition of balls in an urn through sampling with replacement. We find significant aggregate departures from optimal Bayesian learning across all ages, but also important developmental trajectories. Two inference-based and two heuristic-based strategies capture the behavior of 65% to 90% of participants. Many of the youngest children (K to 2nd grade) base their decisions only on the last piece of information and use evolutionary heuristics (such as the “Win-Stay, Lose-Switch” strategy) to guide their choices. Older children and teenagers are gradually able to condition their decisions on all previous information but they often fall prey of the gambler’s fallacy. Only the oldest participants display optimal Bayesian reasoning. These results are modulated by task complexity, and Bayesian reasoning is evidenced earlier when inferences are simpler.
Barash, J., Brocas, I., Carrillo, J. D., & Kodaverdian, N. (2019). Heuristic to Bayesian: The evolution of reasoning from childhood to adulthood. Journal of Economic Behavior & Organization, 159, 305-322.
The development of consistent decision-making across economic domains
Joint with Isabelle Brocas, Juan Carrillo, and T. Dalton Combs. Published in 2019 in Games and Economic Behavior.
How does value-based reasoning develop and how different this development is from one domain to another? We propose a novel experimental design where children 5 to 11 years old make pairwise choices in the Goods (toys), Social (sharing between self and other), and Risk (lotteries) domains, and we evaluate the consistency of their choices. The development of consistency across domains cannot be fully accounted for by existing developmental paradigms such as transitive reasoning, attentional control and centration. We show that choice consistency is related to self-knowledge of preferences which develops gradually and differentially across domains. The Goods domain offers a developmental template: children become more consistent over time because they learn what they like most and least. In the Social domain, children gradually learn what they like most, while in the Risk domain they gradually learn what they like least. These asymmetric developments give rise to asymmetric patterns of consistency.
Brocas, I., Carrillo, J. D., Combs, T. D., & Kodaverdian, N. (2019). The development of consistent decision-making across economic domains. Games and Economic Behavior, 116, 217-240.
Consistency in simple vs. complex choices by younger and older adults
Joint with Isabelle Brocas, Juan Carrillo, and T. Dalton Combs. Published in 2019 in the Journal of Economic Behavior & Organization.
Employing a variant of GARP, we study consistency in aging by comparing the choices of younger adults (YA) and older adults (OA) in a “simple”, two-good and a “complex” three-good condition. We find that OA perform worse than YA in the complex condition but similar to YA in the simple condition, both in terms of the number and severity of GARP violations. Working memory and IQ scores correlate significantly with consistency levels, but only in the complex treatment. Our findings suggest that the age-related deterioration of neural faculties responsible for working memory and fluid intelligence is an obstacle for consistent decision-making.
Brocas, I., Carrillo, J. D., Combs, T. D., & Kodaverdian, N. (2019). Consistency in simple vs. complex choices by younger and older adults. Journal of Economic Behavior & Organization, 157, 580-601.
Being the study of individuals’ and society’s choices in the face of scarcity, economics is invariably concerned with the human decision-making process. As decision making can occur under different circumstances, such as under risk, across time, or in social contexts, different theories exist to describe and to predict people’s decisions. Alternate theories have been proposed within each context, based on field and experimental observations of human behavior. Functional magnetic resonance imaging (fMRI) technology has provided economists with an unmatched ability to test individual theories, and to resolve competing theories. In this chapter, I first outline economic theories relevant to fMRI technology, briefly describe what is meant by “brain activity” and explain how fMRI technology works in illuminating this activity. Then, I summarize findings from neuroeconomics experiments involving decisions in the different contexts introduced. I conclude the chapter by noting some limitations of using fMRI in experiments.
Kodaverdian, N. (2019). fMRI in Economics: What Functional Imaging of the Brain Can Add to Behavioral Economics Experiments. In Biophysical Measurement in Experimental Social Science Research (pp. 47-83). Academic Press.
Altruism and strategic giving in children and adolescents
Joint with Isabelle Brocas and Juan Carrillo. Working Paper.
We conduct a laboratory experiment to investigate the evolution of altruism and strategic giving from childhood to adulthood. 334 school-age children and adolescents (from K to 12th grade) and 48 college students participated in a one-shot dictator game and a repeated alternating version of the same dictator game. Each dictator game featured the choice between a fair split (4, 4) and a selfish split (6, 1) between oneself and an anonymous partner. We find that altruism (fair split in the one-shot game) increases with age in children and drops after adolescence, and cannot alone account for the development of cooperation in the repeated game. Older subjects reciprocate more and also better anticipate the potential gains of initiating a cooperative play. Overall, children younger than 7 years of age are neither altruistic nor strategic while college students strategically cooperate despite a relatively low level of altruism. Participants in the intermediate age range gradually learn to anticipate the long term benefits of cooperation and to adapt their behavior to that of their partner. A turning point after which cooperation can be sustained occurs at about 11-12 years of age.
Brocas, I., Carrillo, J. D., & Kodaverdian, N. (2017). Altruism and strategic giving in children and adolescents.
Through controlled laboratory experiments, this thesis examines age-related differences in decision-making quality – in particular, in choice consistency, transitivity, and mutuallybeneficial cooperation. The four studies here uncover a nonlinear path of decision quality over the life cycle: increasing from childhood to adulthood, until eventually decreasing with old age. Age-related changes, it is found, are not independent of the complexity or domain of the decision, and are sometimes masked by the use of simple choice rules. Taken together, these findings indicate a compensatory nature of choice rules: utilized to counteract cognitive faculties that are yet-underdeveloped, as in the case of younger children, or deteriorating, as in the case of older adults. The rational use of simple strategies, on the other hand, increases from childhood to adulthood, as a growing proportion of subjects learns to best respond to their environment. In the context of individual decision-making, these behavioral and neuroeconomic findings implicate working memory, attention, and self-knowledge of preferences as important factors in consistency and transitivity. In the context of dynamic interactions, adaptive and anticipatory strategic reasoning – and to a lesser extent, other-regarding preferences – are found to be instrumental in achieving mutually-beneficial cooperation, with group membership magnifying their effects. Understanding changes in decision-making quality and their causes can help expand standard economic theories to more accurately reflect human behavior, as well as, inform the design of more favorable policies.
Kodaverdian, N. (2017). The Evolution of Decision-Making Quality over the Life Cycle: Evidence from Behavioral and Neuroeconomic Experiments with Different Age Groups (Doctoral dissertation, University of Southern California).