Abstract
Emotional and economic incentives often conflict in decision environments. To make economically desirable decisions then, deliberative neural processes must be engaged to regulate automatic emotional reactions. In this functional magnetic resonance imaging (fMRI) study, we evaluated how fixed wage (FW) incentives and performance-based (PB) financial incentives, in which pay is proportional to outcome, differentially regulate positive and negative emotional reactions to hypothetical colleagues that conflicted with the economics of available alternatives. Neural activity from FW to PB incentive contexts decreased for positive emotional stimuli but increased for negative stimuli in middle temporal, insula, and medial prefrontal regions. In addition, PB incentives further induced greater responses to negative than positive emotional decisions in the frontal and anterior cingulate regions involved in emotion regulation. Greater response to positive than negative emotional features in these regions also correlated with lower frequencies of economically desirable choices. Our findings suggest that whereas positive emotion regulation involves a reduction of responses in valence representation regions, negative emotion regulation additionally engages brain regions for deliberative processing and signaling of incongruous events.
Highlights
When emotional features conflict with financial features of value-based decisions, individuals tend to forego financially desirable choices and make choices that reflect emotional reactions instead (Kida et al, 2001; Moreno et al, 2002; Thaler et al, 2013)
With PB incentives negative emotional decisions evoked greater neural activity than positive emotional decisions in frontal and cingulate regions, with the hippocampal and caudate regions showing higher activity during negative than neutral emotional decisions. These findings reflect different neural processes during value-based decisions that underlie the motivation of individuals to seek out positive emotional subjective experiences and the avoidance of negative ones rather than to make financially sound objective judgments
It is possible that higher neural responses to positive managers in our task may have reflected a sense of empathy in participants, biasing them to make decisions in favor of these managers
Summary
When emotional features conflict with financial features of value-based decisions, individuals tend to forego financially desirable choices and make choices that reflect emotional reactions instead (Kida et al, 2001; Moreno et al, 2002; Thaler et al, 2013). We applied the common example of corporations compensating managers with fixed wages (FWs) that are independent of investment choices or with performance-based (PB) financial incentives proportional to economic payoffs from investments Using this approach, we evaluated how monetary incentives modulate the neural processing of positive and negative. Accepting economically desirable investments associated with negative emotions should require cognitive effort to enhance processing of the economic value of the choice as well as to regulate aversion to the negative affective stimuli We considered that this latter set of operations to handle negative affect might involve double penalty such that greater neural resources are required compared to operations on positive stimuli (Ochsner et al, 2012). We were interested in whether higher neural activity in lateral frontal areas would be engaged for negative than positive emotion contexts reflecting greater need for regulating negative than positive emotional reactions (Berkman and Lieberman, 2009; Ochsner et al, 2012)
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