The Journal of Neuroscience, August 1, 2007, 27(31):8174-8177; doi:10.1523/JNEUROSCI.1564-07.2007
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Neural Antecedents of Financial Decisions
Brian Knutson1 and
Peter Bossaerts2
1Departments of Psychology and Neuroscience, Stanford University, Stanford, California 94305, and 2Department of Finance, California Institute of Technology, Pasadena, California 91125
Correspondence should be addressed to Brian Knutson at the above address. Email: knutson{at}psych.stanford.edu
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.
Key words: reward; risk; finance; accumbens; striatum; prefrontal; human; FMRI; review
Received April 7, 2007;
revised June 3, 2007;
accepted June 4, 2007.
Correspondence should be addressed to Brian Knutson at the above address. Email: knutson{at}psych.stanford.edu
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