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A neurocomputational account for differences in real and hypothetical financial decision making: Or, why can´t we mimic our own decisions?
KTH, School of Architecture and the Built Environment (ABE), Transport Science, Transport and Location Analysis.
2011 (English)Independent thesis Advanced level (professional degree), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

This thesis gives a neurocomputational account to the observation that humans have difficulties mimicking the financial decisions they make in real situations when asked under hypothetical circumstances. The analysis falls under the category of neuroeconomics and is carried out using a computational model of the brain, composed of relevant brain regions for financial decision making such as the action-selecting basal ganglia, the value-encoding orbitofrontal cortex, and the emotional headquarters of the amygdalae. We will see that humans faced with hypothetical decisions are biased towards accepting higher risks in a prospect theory framework of pairwise preference determination; this is a consequence of the indication that brain regions responsible for evaluation of outcomes are differentially activated following a discrepancy in cortical–amygdalar interaction in the human brain depending on whether the outcomes of the decision is perceived as real or hypothetical. One of the main explanatory factors behind this change of behavior is thought to be the discovery that there is a correlation between amygdalar activity and attitude towards risk, inducing biasing effects in the cortical perception of value.

Place, publisher, year, edition, pages
2011. , 67 p.
TSC-MT, 11-025
National Category
Engineering and Technology
URN: urn:nbn:se:kth:diva-63412OAI: diva2:482195
Available from: 2012-01-23 Created: 2012-01-23

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