- [[economics is constrained optimization]] - [[brain valuation system]]: [[ventromedial prefrontal cortex]], [[posterior cingulate cortex]], [[orbitofrontal cortex]] - [[value normalization]] - [[decision making theories]] - [[costs and benefits of exerting mental effort and control]] - [[opportunity costs]] # Idea Theories in financial economics and behavioral ecology suggest that the brain assigns values to [[prospect]]s by first computing their [[statistical moments]] (e.g., expected magnitude, variance, skew), and then aggregating them into a value signal. [[Rangel 2008 A framework for studying the neurobiology of value-based decision making]] Theories in economics and psychology suggest that value is computed using either [[expected-utility theory]] or [[prospect theory]]—a value for each outcome is computed by integrating reward with probabilities. [[Rangel 2008 A framework for studying the neurobiology of value-based decision making]] We make decisions by first estimating the value of all available options, and then comparing these values to select the best option. This process relies on the putative [[brain valuation system]]. The [[dorsomedial prefrontal cortex dmPFC]] and [[intraparietal sulcus]] help to transform stimulus values to action [[Hare 2011 transformation of stimulus value signals into motor commands|(Hare et al., 2011)]]. Different types of value-guided decisions are underpinned by distinct neural systems or circuits, depending on the type of information that needs to be processed [[Klein-Flugge 2016 neural signatures of value comparison in cingulate cortex during physical effort decisions|(Klein-Flugge et al., 2016)]]. * When decisions involve abstract goods or when costs are tied to the outcome, value signals are observed in the [[ventromedial prefrontal cortex]] [[Kable 2007 neural correlates of subjective value during intertemporal choice|(Kable & Glimcher, 2007)]]. * When decisions involve deciding between exploration versus exploiting, value difference signals are found in the [[dorsomedial prefrontal cortex dmPFC]] and [[anterior cingulate cortex]] [[Kolling 2012 neural mechanisms of foraging|(Kolling et al., 2012)]]. * When choices involve physical effort and evaluation of physical actions and their energetic costs, the dorsal [[anterior cingulate cortex]] is necessary for integrating costs and benefits [[Klein-Flugge 2016 neural signatures of value comparison in cingulate cortex during physical effort decisions|(Klein-Flugge et al., 2016)]]. ## Open questions - How are [[subjective value]]s estimated? - What is the role of each module or region in the [[brain valuation system]]? # References - [[Rangel 2008 A framework for studying the neurobiology of value-based decision making]] - [[Loewenstein 2008 Neuroeconomics]] - [[Lopez-Persem 2020 Four core properties of the human brain valuation system]] - [[Hutcherson 2012 Cognitive regulation shifts behavioral control between vmPFC and dlPFC]] - [[Klein-Flugge 2016 neural signatures of value comparison in cingulate cortex during physical effort decisions]] - [[Hayden the case against economic values in the brain]]