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Risk Patterns and Correlated Brain Activities. Multidimensional statistical analysis of fMRI data with application to risk patterns

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  • Alena MyÅ¡iÄ ková
  • Song Song
  • Piotr Majer
  • Peter N.C. Mohr
  • Hauke R. Heekeren
  • Wolfgang K. Härdle

Abstract

Decision making usually involves uncertainty and risk. Understanding which parts of the human brain are activated during decisions under risk and which neural processes underly (risky) investment decisions are important goals in neuroeconomics. Here, we reanalyze functional magnetic resonance imaging (fMRI) data on 17 subjects which were exposed to an investment decision task from Mohr et al. (2010b). We obtain a time series of three-dimensional images of the blood-oxygen-level dependent (BOLD) fMRI signals. Our goal is to capture the dynamic behavior of specific brain regions of all subjects in this high-dimensional time series data, by a flexible factor approach resulting in a low dimensional representation. We apply a panel version of the dynamic semiparametric factor model (DSFM) presented in Park et al. (2009) and identify task-related activations in space and dynamics in time. Further, we classify the risk attitudes of all subjects based on the estimated lowdimensional time series. Our classification analysis successfully confirms the estimated risk attitudes derived directly from subjects' decision behavior.

Suggested Citation

  • Alena MyÅ¡iÄ ková & Song Song & Piotr Majer & Peter N.C. Mohr & Hauke R. Heekeren & Wolfgang K. Härdle, 2011. "Risk Patterns and Correlated Brain Activities. Multidimensional statistical analysis of fMRI data with application to risk patterns," SFB 649 Discussion Papers SFB649DP2011-085, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  • Handle: RePEc:hum:wpaper:sfb649dp2011-085
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    Cited by:

    1. Stefan Trück & Wolfgang Härdle & Rafal Weron, 2012. "The relationship between spot and futures CO2 emission allowance prices in the EU-ETS," HSC Research Reports HSC/12/02, Hugo Steinhaus Center, Wroclaw University of Technology.

    More about this item

    Keywords

    risk; risk attitude; fMRI; decision making; medial orbifrontal cortex; semiparametric model; factor structure; SVM;

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables

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