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Event-related Potentials reveal differential Brain Regions implicated in Discounting in Two Tasks

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Author Info

  • Liam Delaney

    (University College of Dublin)

  • Kevin Denny

    (University College of Dublin)

  • Wen Zhang

    (University College of Dublin)

  • Caroline Rawdon

    (National University of Ireland)

  • Richard AP Roche

    (National University of Ireland)

Abstract

The way people make decisions about future benefits – termed discounting - has important implications for both financial planning and health behaviour. Several theories assume that, when delaying gratification, the lower weight given to future benefits (the discount rate) declines exponentially. However there is considerable evidence that it declines hyperbolically with the rate of discount being proportionate to the delay distance. There is relatively little evidence as to whether neural areas mediating time- dependent discounting processes differ according to the nature of the task. The present study investigates the potential neurological mechanisms underpinning domain-specific discounting processes. We present high-density event-related potentials (ERPs) data from a task in which participants were asked to make decisions about financial rewards or their health over short and long time-horizons. Participants (n=17) made a button-press response to their preference for an immediate or delayed gain (in the case of finance) or loss (in the case of health), with the discrepancy in the size of benefits/losses varying between alternatives. Waveform components elicited during the task were similar for both domains and included posterior N1, frontal P2 and posterior P3 components. We provide source dipole evidence that differential brain activation does occur across domains with results suggesting the possible involvement of the right cingulate gyrus and left claustrum for the health domain and the left medial and right superior frontal gyri for the finance domain. However, little evidence for differential activation across time horizons is found.

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File URL: http://www.ucd.ie/economics/research/papers/2008/WP08.10.pdf
File Function: First version, 2008
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Bibliographic Info

Paper provided by School Of Economics, University College Dublin in its series Working Papers with number 200810.

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Length: 34 pages
Date of creation: 21 Apr 2008
Date of revision:
Handle: RePEc:ucn:wpaper:200810

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Keywords: Decision Making; Domain-Specific Discounting; Event-Related Potentials;

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  1. Laibson, David I., 1997. "Golden Eggs and Hyperbolic Discounting," Scholarly Articles 4481499, Harvard University Department of Economics.
  2. Brocas, Isabelle & Carrillo, Juan D, 2001. " Rush and Procrastination under Hyperbolic Discounting and Interdependent Activities," Journal of Risk and Uncertainty, Springer, vol. 22(2), pages 141-64, March.
  3. O'Donoghue, Ted & Rabin, Matthew, 1997. "Doing It Now or Later," Department of Economics, Working Paper Series qt7t44m5b0, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  4. McCabe, Kevin & Houser, Daniel & Ryan, Lee & Smith, Vernon & Trouard, Ted, 2001. "A Functional Imaging Study of Cooperation in Two-Person reciprocal Exchange," MPRA Paper 5172, University Library of Munich, Germany.
  5. Shane Frederick & George Loewenstein & Ted O'Donoghue, 2002. "Time Discounting and Time Preference: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 351-401, June.
  6. Colin F. Camerer & George Loewenstein & Drazen Prelec, 2004. "Neuroeconomics: Why Economics Needs Brains," Scandinavian Journal of Economics, Wiley Blackwell, vol. 106(3), pages 555-579, October.
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