Most decisions are made with a certain degree of risk. Traditional theoretical models posit that people are risk-neutral in risky decision making, provided that all other considerations are equal. However, people are often irrational when making a decision under risk. For example, A well-known bias in risky economic decision making is that most people tend to be risk-averse when gains are salient (gain context) but risk-seeking when losses are salient (loss context) despite equal expected values. However, the neural mechanism underlying this irrationality remains elusive.
Prof. LIU Xun’s research team from the Key Laboratory of Behavioral Science, Institute of Psychology has addressed the neural dynamics of risk processing by recording event-related potentials (ERPs) during a gambling task in a gain context and a loss context (Figure 1). In the gain context, options yielded either larger gains or smaller losses (50% probability) and thus participants would eventually win money, whereas in the loss context, the magnitudes of the gain and loss were reversed (50% probability) and thus participants would ultimately lose money.
Figure 1.Schematic representation of the probabilistic two-choice gambling task.
Behaviorally, participants were found to be risk-averse in the gain context but risk-neutral in the loss context. During the anticipation stage (Figure 2), an increased stimulus-preceding negativity (SPN) was elicited by high- versus low-risk choices in the gain but not the loss context. During the early outcome-appraisal stage (Figure 3), the feedback-related negativity (FRN) was larger after high- versus low-risk choices in the gain instead of the loss context. During the late outcome-appraisal stage (Figure 4), an outcome valence effect (a larger P300 for gain vs. loss outcomes) emerged following the high- versus low-risk decisions in the gain but not the loss context. These findings suggest that the irrationality in risk processing can be characterized by distinct neural dynamics and highlight the role of contextual valence in risk processing.
Figure 2. The stage of reward anticipation.
Figure 3. The early stage of outcome appraisal.
Figure 4. The late stage of outcome appraisal.
This work was supported by National Key Technologies R&D Program of China (2012BAI36B01), the CAS/SAFEA International Partnership Program for Creative Research Team (Y2CX131003), the National Natural Science Foundation of China (Grants 31271194 and 31200782), and the Beijing Natural Science Foundation (7133250).This paper is now available online in Psychophysiology.
