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Risky business: the neuroeconomics of decision making under uncertainty

Abstract

Many decisions involve uncertainty, or imperfect knowledge about how choices lead to outcomes. Colloquial notions of uncertainty, particularly when describing a decision as 'risky', often carry connotations of potential danger as well. Gambling on a long shot, whether a horse at the racetrack or a foreign oil company in a hedge fund, can have negative consequences, but the impact of uncertainty on decision making extends beyond gambling. Indeed, uncertainty in some form pervades nearly all our choices in daily life. Stepping into traffic to hail a cab, braving an ice storm to be the first at work, or dating the boss's son or daughter also offer potentially great windfalls, at the expense of surety. We continually face trade-offs between options that promise safety and others that offer an uncertain potential for jackpot or bust. When mechanisms for dealing with uncertain outcomes fail, as in mental disorders such as problem gambling or addiction, the results can be disastrous. Thus, understanding decision making—indeed, understanding behavior itself—requires knowing how the brain responds to and uses information about uncertainty.

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Figure 1: Brain regions implicated in decision making under uncertainty.
Figure 2: Neuronal correlates of risky rewards.

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Acknowledgements

The authors wish to thank B. Hayden for comments on the manuscript and D. Smith for assistance with figure construction. The Center for Neuroeconomic Studies at Duke University is supported by the Office of the Provost and by the Duke Institute for Brain Sciences. The authors are also supported by MH-070685 (S.A.H.), EY-13496 (M.L.P.) and MH-71817 (M.L.P.).

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Platt, M., Huettel, S. Risky business: the neuroeconomics of decision making under uncertainty. Nat Neurosci 11, 398–403 (2008). https://doi.org/10.1038/nn2062

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