The Importance of Judgement in Decision making: Towards a Cognitive Neuroscience of decision under risk.
Abstract:
Decisions of life are usually made without a prior understanding of future outcomes. Nowadays, much importance is given to simulation of decisions taken under risky conditions whose choices follow a particular probability distribution over possible outcomes, by economists and psychologists
Modelling:
The limitations of the classical economic models triggered the prospect theory to develop, which is one of the most effective behavioral models of decision under risk. Prospect theory assumes that losses and gains are valued differently, and thus individuals make decisions based on perceived benefits instead of perceived failures. A value function that is convex for damages, and concave for profits is used to model the subjective value in the prospect theory. A weighting function that overweights low probabilities and underweights moderate to high expectations characterizes the impact of chances.
We summarize the probable neural bases of the factors of prospect theory, examining the proofs from animal neurophysiology studies, lesion, and neuropharmacology studies along with human imaging.
Conclusion:
These results provide initial proposals concerning the neural bases of prospect theory that include an extensive set of brain regions and neuromodulatory systems. These data suggest that motivated studies of decision making from the perspective of quantitative models may offer substantial leverage towards a fuller understanding of the cognitive neuroscience of decision making.
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