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The Affective Impact of Financial Skewness on Neural Activity and Choice

Wu, Charlene C. and Bossaerts, Peter and Knutson, Brian (2011) The Affective Impact of Financial Skewness on Neural Activity and Choice. PLoS ONE, 6 (2). Art. No. e16838 . ISSN 1932-6203. https://resolver.caltech.edu/CaltechAUTHORS:20110307-154627957

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Abstract

Few finance theories consider the influence of “skewness” (or large and asymmetric but unlikely outcomes) on financial choice. We investigated the impact of skewed gambles on subjects' neural activity, self-reported affective responses, and subsequent preferences using functional magnetic resonance imaging (FMRI). Neurally, skewed gambles elicited more anterior insula activation than symmetric gambles equated for expected value and variance, and positively skewed gambles also specifically elicited more nucleus accumbens (NAcc) activation than negatively skewed gambles. Affectively, positively skewed gambles elicited more positive arousal and negatively skewed gambles elicited more negative arousal than symmetric gambles equated for expected value and variance. Subjects also preferred positively skewed gambles more, but negatively skewed gambles less than symmetric gambles of equal expected value. Individual differences in both NAcc activity and positive arousal predicted preferences for positively skewed gambles. These findings support an anticipatory affect account in which statistical properties of gambles—including skewness—can influence neural activity, affective responses, and ultimately, choice.


Item Type:Article
Related URLs:
URLURL TypeDescription
http://dx.doi.org/10.1371/journal.pone.0016838 DOIUNSPECIFIED
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3039661/PublisherUNSPECIFIED
ORCID:
AuthorORCID
Bossaerts, Peter0000-0003-2308-2603
Additional Information:© 2011 Wu et al. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. Received November 10, 2010; Accepted January 3, 2011; Published February 15, 2011. Editor: Eshel Ben-Jacob, Tel Aviv University, Israel. Funding: Research was supported by National Science Foundation Grant 0748915 to BK and National Science Foundation Graduate Research Fellowship to CCW. The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript. We thank the SPAN lab for feedback on earlier versions of the manuscript. Author Contributions: Conceived and designed the experiments: CCW PB BK. Performed the experiments: CCW. Analyzed the data: CCW BK. Wrote the paper: CCW PB BK.
Funders:
Funding AgencyGrant Number
NSF Graduate Research FellowshipUNSPECIFIED
NSF0748915
Issue or Number:2
Record Number:CaltechAUTHORS:20110307-154627957
Persistent URL:https://resolver.caltech.edu/CaltechAUTHORS:20110307-154627957
Official Citation:Wu CC, Bossaerts P, Knutson B (2011) The Affective Impact of Financial Skewness on Neural Activity and Choice. PLoS ONE 6(2): e16838. doi:10.1371/ journal.pone.0016838
Usage Policy:This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
ID Code:22702
Collection:CaltechAUTHORS
Deposited By: Tony Diaz
Deposited On:08 Mar 2011 17:59
Last Modified:03 Oct 2019 02:39

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