Why humans deviate from rational choice

Abstract

Rational choice theory predicts that humans always optimize the expected utility of options when making decisions. However, in decision-making games, humans often punish their opponents even when doing so reduces their own reward. We used the Ultimatum and Dictator games to examine the affective correlates of decision-making. We show that the feedback negativity, an event-related brain potential that originates in the anterior cingulate cortex that has been related to reinforcement learning, predicts the decision to reject unfair offers in the Ultimatum game. Furthermore, the decision to reject is positively related to more negative emotional reactions and to increased autonomic nervous system activity. These findings support the idea that subjective emotional markers guide decision-making and that the anterior cingulate cortex integrates instances of reinforcement and punishment to provide such affective markers.

The interplay between feedback-related negativity and individual differences in altruistic punishment: An EEG study

“…Consistent with previous research indicating that the FRN is evoked by negative outcomes in social games (Boksem & De Cremer, 2010;Hewig et al, 2011;Polezzi et al, 2008) and in agreement with our hypothesis, we observed that FRN amplitude was more pronounced for unfair than for fair assignments in both the first person and third party conditions. Further, because larger FRN amplitudes have been observed for unexpected or surprising events, one might assume that fair assignments were more likely to be expected by the participants than unfair assignments.…”

“…3B). This fits with previous observations that showed maximum FRN amplitudes at frontal electrodes (e.g., Gehring & Willoughby, 2002), notably in studies examining altruistic punishment using an Ultimatum Game or Dictator Game paradigm (Boksem & De Cremer, 2010;Hewig et al, 2011). Thus, data from the Fz electrode in a 270-330 ms time window were used for further analyses.…”

“…whether outcomes match expectations (e.g., reward prediction errors). Recent EEG studies have begun to examine the modulation of FRN in altruistic punishment scenarios in the first person perspective (Boksem & De Cremer, 2010;Hewig et al, 2011). Similarly, a few studies investigated behavioral effects in third party punishment games (e.g., Fehr & Fischbacher, 2004a), but only one study so far has examined associated ERP correlates (Qu, Dou, You, & Qu, 2014).…”

“…Considering the importance both of fairness evaluations (Boksem & De Cremer, 2010) and of emotional involvement (Crockett et al, 2010) when being exposed to unfair assignments, we particularly expected FRN amplitudes in unfair trials to predict punishment behavior both in first person and in third party perspectives. Although the conventional significance level was missed, medium-sized correlations indicated that in unfair trials (when participants supposedly experience the most unexpected events), larger FRN amplitudes were associated with punishment behavior only in first person perspective (e.g., Hewig et al, 2011). One may speculate that such an effect would have passed the conventional significance level in case of a larger sample size.…”

“…More recently, this line of research has been extended to decision making in the social domain where it has been shown that recipients in an Ultimatum Game exhibited a larger FRN to unfair as compared to fair offers made by one and the same proposer (Polezzi et al, 2008) or by different proposers, particularly in those individuals with high fairness concerns (Boksem & De Cremer, 2010), and that the FRN amplitude is related to the decision to reject unfair offers by the proposer (Hewig et al, 2011). This may indicate a relationship between FRN and the adherence of a fairness norm.…”