[SOUND] So, after previous

lectures, we already know that

some brain regions are involved

into the variation process,

some brain regions are involved

into emotions.

So after previous slides, we know that

variation process is a part of emotional process.

Today we will focus on w regions, on

the functional role of Amygdala and Orbitofrontal cortex.

These two regions are key regions for learning.

So amygdala is involved into a relatively

rigid, long lasting learning of potential negative outcomes.

So it is involved into the association of neutral stimuli.

With potential costs.

Maybe the frontal cortex is evolved into fast learning.

So it can quickly update values for certain options for certain objects.

So, let's now focus on the role of these two regions

of the Amygdala and the Orbitofrontal cortex in the decision making process.

As we suggested, we can base our choices, our actions, on our emotions.

So we can select between different possible

actions, between different choices, based on our emotions.

So emotions are kind of heuristics that

can be used to select the optimal, reaction.

We will focus now on the role of the Orbitofrontal cortex.

So this brain region, as you

remember, compares, integrates, multiple information regarding

the outcomes, and perhaps creates our

decision value for our decision making process.

And also, this region, is involved into the fast emotional learning.

And let's make a look how this learning process, can affect our decisions.

Now I will present you studies conducted by

Antonio Demacio, a famous neurologist and neuroscientist and nueroeconomist.

He quite often illustrates this line of research by an example of Elliott.

Elliott is a happy, married young man.

He is a role model for his friends.

He is a very successful natural leader,

and he became quite early a financial controller.

Suddenly, at the age of 35, he was diagnosed with a brain tumor.

And after the operation, a bit frontal cortex was damaged.

Particular, the ventral medium part of the, a

bit frontal cortex was removed by the surgery.

Interestingly, all special tasks dedicated to

measure intelligence, memory, reading, writing comprehension, level

fluency, facial recognition ability showed average or superior performance.

So this is a highly intelligent person.

With quite high IQ.

But, suddenly, he started to show very abnormal decisions.

So, within months of the operation, he quitted his job, he lost a substantial

amount of money he invested to this scam artist, he divorced with his wife.

He lost contact with his family, his friends,

he married a prostitute in a month's time.

So he actually got a serious problem related to

his job, and his second marriage ended quite quickly.

So, interestingly, this person, who is highly intelligent.

Has normal, or superior cognitive abilities, made devastating decisions.

How can we explain this?

So, Antonio Damasio investigated patients with similar problems.

He found, a set of patients with damages in the

Orbitofrontal cortex, particularly in the medial part of the Orbitofrontal cortex.

So interestingly these, all of these

patients have average or above average intelligence.

They unfortunately are not very expressive in

terms of emotions, they are unusually rational.

So these people have a very high IQ.

But these people have problems to express

emotions and problem to understand emotions of others.

So interestingly these highly intellectual people, high

rational people in real life make disastrous decisions.

So surprisingly unemotional people cannot react.

Rationally.

So let's make look to the very influential studies

illustrating the role of emotions in optimal advantageous decisions.

So Antonio Damasio suggested the Theory of Somatic Marker.

So he suggested the somatic marker hypotheses.

He suggested that we use our emotions.

To make decisions.

And basically, we can illustrate this process by a very simple decision.

For example, as to accept or reject an invitation to dance.

So, so there are various possibilities to react to this invitation.

You can accept the invitation, you can decline this invitation.

You can tell that you feel.

Back pain, you can decline and ask to, this girl to sit nearby.

You can run away.

So you have very many options.

And you can actually make a rational search for the optimal decision.

So you can compare all possible outcomes for all possible alternatives.

Perhaps you will come up with a good solution.

But it can be a very long way to go.

On the other hand you can simply use your emotions.

So you have certain emotions attached to different possible outcomes.

For example, you've danced already with this

girl and you had a very positive experience.

So you can simply use your positive emotions to accept the act.

So emotions can be used for the selection of the different options.

So, perhaps, instead of long correctional search for the best option,

for the best choice but, quite often, can use our emotions to make a very fast.

And normally quite good choice.

So let's now make a look to the very

influential study conducted by the group of Antonio Damasio.

So this study focused on patients with

problems, with damages in the ventral frontal cortex.

This study used a very simple task.

So, this task is called gambling task.

In this task, you have to select a card from one of four card decks.

To of these decks, deck A and B, are disadvantages decks.

If you will select cards from this decks, you

will lose money at the end of the experiment.

On the other hand, decks C and D are advantageous decks.

If you will continue to select cards from this decks.

You will have a positive payoff.

You will gain a substantial amount of money at the end of the experiment.

So subjects have to learn which

deck is advantageous, which deck is disadvantageous.

So as you see here, an example, and persons

select between pile, or deck A, and deck C.

And in deck A, you can actually win quite a lot.

But you can also lose a substantial amount of money.

overall, you would lose money if you continue

to take the decks from the pile A.

And the other hand, if you take the card from the pile C,.

You will win not so much money but you also do not lose a lot of money.

So overall, you will gain, and you will gain a positive sum at the

end of the experiment, if you continue to take cards from the pile C.

So normal subjects quite quickly learn.

Is that it is advantageous to take cards from pile C,

and they would collect more money if they would select these cards.

So here is a formal structure of this experiment.

So you see four decks, A, B, C and D.

And you see, it's the sequence of trials.

So if people select cards from the decks A and B.

They start to win a substantial amount of money, but later they start

to lose money and they start to lose really huge amount of money.

So then it's their final outcome would be a negative one,

so if they would select cards from piles a and b.

They will have a negative final outcome of minus $250.

On the other hand, if they will select cards from

the pile C and D, they would get not so

much money as in cards A and B at the

beginning, but later they will not lose so much money.

So overall they will gain a positive sum, $250.

So it is rational to select cards from.

While C and D and normal people quickly

learn it that pile C and D are advantageous.

So here you see the behavioral results of subjects with visions in the ventral

middle portion of their Orbitalfrontal cortex in Amygdala and normal controls.

So you see that normal controls.

The subjects quickly learn that the decks C and D are advantageous.

So you see the proportion of the choices of

decks C and D and normal subjects quickly learn.

To select cards from piles C and D.

But what do we see here for patients with

damages in Amygdala and the middle portion of Orbitalfrontal cortex.

These patients continue to select cards from disadvantageous pile.

So they continue to lose money.

Let's make a look to the emotional reactions.

We can actually record the body responses using skin conductance response.

With this, method we can actually detect the emotional arousal of

the body of the subjects, in the form of skin conductance response.

So the stronger the response is.

The larger the emotion arousal the bodies.

So we can measure body arousal, the skin conductance

response, before person opens the card from a certain pile.

So that would be anticipatory emotional arousal.

Or can measure skin conductance response after a person.

Open the card, so that would

be reward, punishment related skin conductance response.

So let's take a look first to the reaction of

different groups of subjects to the outcome of the decision.

So below you see the anticipatory skin conductance responses of normal subjects.

Patients with damages in the Amygdala and Orbitalfrontal frontal cortex.

We see a clear difference between three groups.

So, skin conductance reaction is clearly different from normal subjects.

When subjects anticipate results of advantageous and disadvantageous desks.

So the emotions, the emotional arousal differentiates.

The risk related to these two decks.

And subjects are much more aroused when they're, they

are waiting for the outcome, of the disadvantages decks.

And you do not see this difference from

patients with damages on Amygdala and Orbitalfrontal cortex.

So it looks like, when normal subjects anticipate the outcomes.

Their emotional system signals the risk related

to these two different types of decks.

So we can divide the whole study in four periods, the

pre-punishment period, the period when subjects

do not experience any negative outcomes.

So I was able to really encounter punishment during this period of time.

The pre-hunch period, at this period, subjects, they start to

lose money but they have no clue about which deck is the best one.

And the hunch period.

Subjects start to express some preferences for certain decks.

But they cannot consciously explain which deck is the best one.

And finally, the conceptual period.

Subjects can clearly explain which deck is the best one.

And they can explain why do we, they select this deck.

So we can now investigate the emotional

reaction of our subjects during these four periods.

So let's focus first on the control subjects, on normal subjects.

So, as you would see, that anticipatory skin conductance response.

So, this emotional arousal before subject really

realize and know the outcome of the decision.

Is indifferent as a during a pre-hunch period so

at the moment objects do not really encounter any losses.

Emotional reaction of the brain is indifferent

during anticipation of the outcome of advantageous.

This advantageous decks.

But later, there was a pre-hunch period when subjects

do not really understand which deck is the best one.

And they do not know which decks should be avoided.

You already see a difference in their emotional reaction.

So you see a trend.

That emotional arousal is stronger when subjects

open the card from the disadvantageous decks.

So we see here that emotions start to differentiate, decks.

But consciously person cannot differentiate decks.

So next, there's a hunch period when subjects show a clear preference.

For some decks and cannot really explain which deck is the best one and why.

You see a clear differentiation of the emotional response

during the anticipation of the advantageous and disadvantageous decks.

And finally, when subject.

Is that's a conceptual period when subject understand which deck is best one.

You also see a clear differentiation of the

emotional reaction during the anticipation of the outcome.

So, you see below the behavior responses.

So you see that, during the pre-hatch period

when emotions already start to differentiate to condition.

Behaviors, there is no real differentiation of this new condition.

So people can not really explain which deck

is advantageous and which deck is a disadvantageous.

So it's a hunch period.

People start to understand and can conscientiously start to explain.

Which deck is the best one.

So let's make a look through the patients.

So what do we see here, for the patients with a bit of frontal

cortex damages, so you see that there's

skin conductance response, doesn't really differentiate to decks.

So their emotions do not differentiate to conditions.

Advantageous and disadvantageous, bad and good deck.

So you basically see no difference in their response.

If you maybe look to the behavioral responses,

you will see that at the conceptual period.

Approximately half of the patients can consciously

explain which deck is the best one.

So they can, indicate which decks are bad

decks, which gat's, decks are, are good decks.

But, if we will make a look to their behavioral

responses, they do not show any preference for the good decks.

So they can consciously explain which deck is a good one,

but they do not make decisions based on this conscious explanation.

They show no preferences for good decks.

Though surprisingly this result shows that ventromedial patients, or

patients with damages in the ventromedial portion, that would be the frontal cortex.

They continue to choose disadvantageous behavior in the gambling

task, even after realizing the consequences of their actions.

So they can consciously explain that a certain deck is

a good one, but they do not follow this conscious explanation.

Now emotional biases of normal subjects occur even

before a subject can cautiously explain their preferences.

So we can see that there emotional system different shape bad

and good acts before subjects can conscientiously explain their preference.

And, finally, knowledge may not

be sufficient to ensure advantageous behavior.

So, patients could consciously, explicitly report which act

is advantageous but they do not follow this report.

They still select the risky decks.

So this study shows that emotions promote rational

and optimal decisions, but is it always the case?

Could emotion actually conflict with optimal rational decisions?

Our next study, conducted by Baba Shiv, really

illustrates that sometimes emotions interfere with optimal decisions.

So Baba Shiv, conducted a relatively simple study, but very inspiring study.

So he gave subjects an initial endowments of $20 and subject

had two options, to invest $1 or not to invest $1.

So if they do not invest money subjects keeps the dollar.

So if subject invest money with 50% chance she can lose 1$ or with 50%

chance she can gain 2.5$, so as you see here expected value for each round.

Is higher for investment.

So a person can get 1.25 dollars for

investment, and only one dollar for a non-investment decision.

So it's optimal here to invest money.

So it's optimal here to make a risky choice.

Now let's make a look to the results.

This is a percentage of the investment decisions for normal subjects.

For subjects with lesions in their Orbiotfrontal

cortex and for individuals with substance dependence.

So what do we see here is that normal subjects, they start

to invest quite a lot but after some time they face losses.

And next they start to be risk averse, they decrease and decrease and decrease.

As their investment decisions.

So finally they start to be quite risk averse.

And we do not see this tendency for

patients with lesions in the middle frontal cortex.

It looks like they do not react to the negative outcomes.

They continue to invest money.

And in the end they will gain much more money than normal subjects.

So actually, in certain situations,

emotions can interfere with optimal decisions.

So this study for example triggered quiet

substantial discussion about the brains of effective investors.

Some, neuroscientists made some jokes at some of the famous investors.

Perhaps are quite similar to the Orbirtalfrontal cortex

patient, they are not sensitive for the negative outcomes.

But anyways this study illustrates that sometimes

evolutions can actually interfere with optimal decisions.

So we can suggest based on this study that emotional reactions.

In the previous rounds, they affect our decisions in the next rounds.

So for example, we can start to be more

or least adverse because of losses in the previous rounds.

On the other hand patients who do

not really experience or learn from negative outcome.

They are not influenced by emotional

reactions associated with losses in the previous.

Rounds.

They do not show a change in their

behavioral strategy, they continue to be risk seeking.

So, here, we can conclude that Orbitofrontal cortex,

and also Amygdala two brain regions that are involved into the emotional learning.

Into updating of our values associated

with certain stimuli and with certain choices.

They play a critical role in decisions, so emotional learning is important to

update values related to certain choices.

And as Antonio Dimatzi showed.

The damage to the frontal cortex can lead to sub optimal decisions.

Because people do not learn from the previous outcomes.

And they do not change the values of choices based on the previous trials.

So overall, we can conclude that we do use emotions in our decision making process.

We can select different options, different choices based on our emotions.

So we, of course, can use the rational

strategy to select the optimal reaction, the optimal choice.

But this process is nicely illustrated by Antonio Damasio example of, orbitofrontal

patient who makes a very simple decision to select a restaurant for a meeting.

Imagine that this person will start to select a restaurant for a meeting who is.

And as a person, he will list all possible restaurants in

the city center and he will start an endless selection process.

He will compare prices at all restaurants, he will compare, the quality

of foods, the distance between the restaurants and metro station, and so on.

It will be a very long endless process.

Of the rational search for the optimal decision.

On the other hand, normal person would quickly make a decision in this case.

So you like this first restaurant, I also like

this restaurant, so why not meet in this restaurant?

Perhaps that would be not the best restaurant,

but that's an optimal decisions, a very fast decision.

And as a patient with our Orbitalfrontal cortex lesions, will

continue to make a search for minutes, even for hours,

and he will not react to negative emotional expressions of

the partner, who will be irritated by such a long procedure.

Perhaps the partner can even terminate the appointment.

It basically illustrates that quite often

emotions are optimal ways to make decisions.

So we can make fast and normally

quite appropriate decisions simply based on our emotions.

So it can be a much faster process

compared to the rational search for the optimal decisions.

So the take home message for today lecture is relatively short.

Indeed emotions matter for decision making process.

We do use emotions, during the decision making process

and we make quite optimal decisions based on our emotions.

And as we'll see during the next lectures emotions is a kep components of our

decisions on the risk and also very

important for our decisions in various social context

[MUSIC]

Emotions, Consciousness, and Optimal Decisions

Introduction to Neuroeconomics: How the Brain Makes Decisions

Meet the Instructors