Abstract
Considerable debate persists around the definition of risk. Depending on the area of study, the concept of risk may be defined as the variance of the possible outcomes, the probability of a loss, or a combination of the loss probability and its maximum possible loss. Mounting evidence suggests the anterior cingulate cortex (ACC), including the surrounding medial prefrontal cortex (mPFC), and the anterior insula/inferior frontal gyrus (IFG) are key neural regions that represent perceived risks. Yet it remains unclear which of these formalisms best accounts for the pattern of activation in brain regions representing risk, and it is also difficult to disentangle risk from value, as both contribute to perceived utility. To adjudicate among the possible definitions, we used fMRI with a novel gambling task that orthogonalized the variance, loss probability, and maximum possible loss among the risky options, while maintaining a constant expected value across all monetary gambles to isolate the impact of risk rather than value. Here we show that when expected value is controlled for ACC and IFG activation reflect variance, but neither loss probability nor maximum possible loss. Across subjects, variance-related activation within the ACC correlates indirectly with risk aversion. Our results highlight the variance of the prospective outcomes as a formal representation of risk that is reflected both in brain activity and behavior, thus suggestive of a stronger link among formal economic theories of financial risk, naturalistic risk taking, and neural representations of risk.
Highlights
Cognitive neuroscience studies have used risky decision-making tasks to identify a network of brain regions involved in predicting and evaluating the potential outcomes of an action, which often influences decisions to avoid anticipated risks (Preuschoff et al, 2008; Jahn et al, 2011; BarkleyLevenson et al, 2013; van Duijvenvoorde et al, 2015)
We tested to see whether the Var, P(Loss), or Max(Loss) constructs accounted for behavioral preferences, in particular, the certainty equivalent (CE) values and reaction times for all trials (RT) found for each gamble (Figure 2)
We tested whether repeated presentations of the same gamble might causes preferences to shift over time, but we found no evidence of this (Supplementary Material)
Summary
Cognitive neuroscience studies have used risky decision-making tasks to identify a network of brain regions involved in predicting and evaluating the potential outcomes of an action, which often influences decisions to avoid anticipated risks (Preuschoff et al, 2008; Jahn et al, 2011; BarkleyLevenson et al, 2013; van Duijvenvoorde et al, 2015) Across such studies, are sizeable differences in the treatment of risk, as risk constructs often represent various meanings across a wide range of disciplines. Neural Representations of Risk generally equates to variance in the areas of economics and finance (Markowitz, 1952; Slovic and Lichtenstein, 1968) This definition of risk, sometimes misses the broader concept of risk as entailing aversive consequences. In health psychology for example, risk involves the probability of a bad outcome such as getting a disease (Rothman and Salovey, 1997), and in other contexts, risk analysis involves both the probability of a particular aversive outcome and the severity of the aversive outcome (Saaty, 1987)
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