14 DAY TRIAL // Would you work all your life for a stable but low income?
Would you slowly die off just not to pass through a salvation surgery that could also kill you?
Do you have a business plan in your mind all your life, but you cannot admit losing your entire investment?
UCLA psychologists made a first study of its own investigating how our brains function when evaluating gaining possibility versus losing when taking risky decisions.
The 16 subjects were given $30 and asked to gamble in a game with 50-50 chances of winning or losing money.
Would they take their chance of winning $30 but at the same time losing $20?
The wagers' brain activity was studied with a functional magnetic resonance imaging (fMRI) scanner. The subjects answered whether they would strongly agree to the gamble, weakly accept it, weakly refuse it or strongly reject it. They were not told whether they had gained or lost until after they were out of the scanner.
Three of the gambles were randomly selected, and if the participants had previously agreed to accept it, the investigators flipped a coin and the subjects either won or lost the money.
The researchers proceeded this way because they were interested by the brain's zones activated during the decision-making process, not those reacting to winning or losing situations.
On average, subjects agreed to try winning $19 when they could lose $10 at 50 % chance of winning. One individual needed the punt to win $60 to accept $10 loss, while another needed only the chance to win $11 to risk losing $10. "Looking at how your brain responds to potential gains versus potential losses, we can predict how risk-averse you are going to be in your choices," said study co-author Russell Poldrack, UCLA associate professor of psychology.
"The people who show much more neural sensitivity to losses relative to gains are the same people who are very reluctant to gamble unless they are offered extremely favorable gambles. The people who are about as sensitive to losses as gains neurologically are the ones who are more willing to gamble", said co-author Craig Fox, an associate professor of policy at the UCLA Anderson School of Management and an associate professor of psychology.
"Thinking about the possibility of winning money turns on some of the same areas of the brain that are activated when people take cocaine, eat chocolate or look at a beautiful face. Regions that become more active as the amount increases are considered "reward centers" in the brain, such as the prefrontal cortex and the ventral striatum," Poldrack said.
The brain's reward centers are activated not only when we actually get rewards but also when we make decisions or think about potential rewards, and when we have to take our chances, the reward circuitry in the brain is more sensitive to possible losses than to possible gains.
The investigators found that the same areas that are activated when we focus on winning money are switched off when we think about losing money.
Interesting enough, brain areas involved in fear or anxiety, like the amygdala or the insula, are not turned on in this case. "What we found instead, is you don't turn anything up. You turn down the reward areas of the brain, and you turn them down more strongly for losses than you turn them up for gains. Just as people respond more strongly to a $100 potential loss than a $100 potential gain, the brain responds more strongly to a $100 potential loss versus a $100 potential gain", said Poldrack.
"The study confirms previous research showing that people are more turned off by losses than they are turned on by gains and it provides, for the first time, neural evidence to support this pattern. We found for the first time that the neural response to potential losses is larger than the neural response to potential gains," Fox said.
"In this new study, we found for the first time neurophysiological evidence for prospect theory, the most important behavioral model of decision-making to emerge in the past 50 years, whose components include the asymmetry between how losses and gains are valued," Fox said.
"The people who have the most deactivation in the reward pathways were also the most loss-averse." said Sabrina Tom, a UCLA research assistant in psychology and lead author of the study.
"A woman in a bad marriage is not likely to leave unless she has prospects that are much better than what she has." said Tom. "She's probably not going to leave for something that's only moderately better," Tom said. "She needs to know it's going to be a lot better before giving up what she already has."
"The people who were most willing to gamble were least turned on as the stakes got higher, while the people who were most averse to gambling were most turned on as gains and losses increased," said Poldrack.