Abstract
The phenomenon of loss aversion (the tendency for losses to have a greater impact than comparable gains) has long been observed in daily life. Neurocognitive studies and brain imaging studies have shed light on the correlation between the phenomenon of loss aversion and the brain region of the prefrontal cortex. Recent brain stimulation studies using bilateral transcranial magnetic stimulation or transcranial direct current stimulation (tDCS) have obtained various results showing the causal relationship between brain regions and decision making. With the goal of studying whether unilateral stimulation can change participants’ risky decision making in the frames of gains and losses, we applied different polarities of tDCS over the regions of the right or left prefrontal cortex. We also designed a risk measurement table (Multiple Price List) to reflect the participants’ attitudes toward risky decision making via the crossover point including the frames of gains and losses. The results of our experiment indicated that the participants tended to be more risk averse in the gain frame after receiving left anodal tDCS and more risk seeking in the loss frame after receiving right cathodal tDCS, which was consistent with the hypothesis that the process of risky decision making was correlated with the interaction of multiple systems in the brain. Our conclusion revealed an asymmetric effect of right/left DLPFC when the participants faced gains and losses, which partially provided the neural evidence and a feasible paradigm to help better understand risky decision making and loss aversion. The current study can not only expand the traditional understanding of the behavioral preferences of humans in economics but also accommodate empirical observations of behavioral economists on the preferences of humans.
Highlights
To determine how to address the complex problems of daily life, it is necessary to understand human decision making in the face of risk and uncertainty (Gurevich et al, 2009)
By applying different polarities of transcranial direct current stimulation (tDCS) over the right or left prefrontal cortex, we studied whether unilateral stimulation could change the participants’ responses to risky decision making in the face of gains or losses
The 2 × 5 mixed-model ANOVA revealed that the main effect for frame was significant (F1,145 = 53.22, p < 0.001), indicating that the crossover point (CP) was significantly larger in the gain frame than that in the loss frame
Summary
Behavioral economists and psychologists have demonstrated that a loss of $X is more aversive than a gain of $X; this phenomenon is called loss aversion and is closely tDCS Affects Risk Preference related to risky decision making (Kahneman and Tversky, 1979, 1984; Tversky and Kahneman, 1992). Loss aversion implies that when facing two options, for example, (A) a probability of 1.0 to win $3000 or (B) a probability of 0.8 to win $4000, most participants would choose the former. The value function is concave for gains but turned to be convex for losses, according to the theory, which indicates that the marginal impact of a change in outcome or probability diminishes with the distance from the relevant reference points (Kahneman and Tversky, 1979, 1984; Tversky and Kahneman, 1991, 1992). The characteristic of the value function, with a concave shape for gains and convex for losses, contributes to the risk aversion for gain but risk seeking for losses (Boorman and Sallet, 2009)
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