The Neurobiological Foundations of Valuation in Human Decision Making under Uncertainty

The goal of this chapter is to review recent neurobiological evidence to improve our understanding of human valuation under uncertainty. Although we are ultimately interested in human behavior, we will borrow from studies of animals with related brain structures, namely, non-human primates. Specifically, we wish to explore how valuation is accomplished? As we shall see, the evidence rejects a pure “retrieval from memory” model. Instead, values are computed. This raises the issue: what computational model(s) are being used? Specifically, since actual choice can be summarized in terms of a singledimensional utility index such as expected utility or prospect theory, we are effectively wondering how such an index is computed. We wish to understand the effect of perceptual biases on this computation, as well as the role of emotions. How does the computational model generate the risk aversion that we may see in choices? Or, in ambiguous situations, how is ambiguity aversion revealed in choices (Hsu, Bhatt et al. 2005; Bali, Demirtas et al. 2006; Huettel, Stowe et al. 2006), and what model underlies it, e.g., alpha-maxmin preferences (Ghirardato, Maccheroni et al. 2004), anticipated regret (Segal 1987), or some other.