Neural Antecedents of Financial Decisions

Abstract

To explain investing decisions, financial theorists invoke two opposing metrics: expected reward and risk. Recent advances in the spatial and temporal resolution of brain imaging techniques enable investigators to visualize changes in neural activation before financial decisions. Research using these methods indicates that although the ventral striatum plays a role in representation of expected reward, the insula may play a more prominent role in the representation of expected risk. Accumulating evidence also suggests that antecedent neural activation in these regions can be used to predict upcoming financial decisions. These findings have implications for predicting choices and for building a physiologically constrained theory of decision-making.