title: Portfolio Decisions and Brain Reactions via the CEAD method.
abstract: Decision making can be a complex process requiring the integration of several attributes of choice options. Understanding the neural processes underlying (uncertain) investment decisions is an important topic in neuroeconomics. We analyzed functional magnetic resonance imaging (fMRI) data from an investment decision study for stimulus-related effects. We propose a new technique for identifying activated brain regions: cluster, estimation, activation, and decision method. Our analysis is focused on clusters of voxels rather than voxel units. Thus, we achieve a higher signal-to-noise ratio within the unit tested and a smaller number of hypothesis tests compared with the often used General Linear Model (GLM). We propose to first conduct the brain parcellation by applying spatially constrained spectral clustering. The information within each cluster can then be extracted by the flexible dynamic semiparametric factor model (DSFM) dimension reduction technique and finally be tested for differences in activation between conditions. This sequence of Cluster, Estimation, Activation, and Decision admits a model-free analysis of the local fMRI signal. Applying a GLM on the DSFM-based time series resulted in a significant correlation between the risk of choice options and changes in fMRI signal in the anterior insula and dorsomedial prefrontal cortex. Additionally, individual differences in decision-related reactions within the DSFM time series predicted individual differences in risk attitudes as modeled with the framework of the mean-variance model.
authors: C.A.S.E. - Center for Applied Statistics and Economics, Humboldt-Universität zu Berlin, Spandauer Str. 1, 10178 , Berlin, Germany. majerpio@cms.hu-berlin.de.
authors: Piotr
authors: P
authors: Majer
authors: Department of Education and Psychology, Freie Universität Berlin, Berlin, Germany.
authors: Peter N C
authors: PN
authors: Mohr
authors: Department of Education and Psychology, Freie Universität Berlin, Berlin, Germany.
authors: Hauke R
authors: HR
authors: Heekeren
authors: C.A.S.E. - Center for Applied Statistics and Economics, Humboldt-Universität zu Berlin, Spandauer Str. 1, 10178 , Berlin, Germany.|School of Business, Singapore Management University, 50 Stamford Road, Singapore, 178899, Singapore.
authors: Wolfgang K
authors: WK
authors: Härdle
mesh_terms: D001290:Attitude; D001921:Brain / Q000000981:diagnostic imaging / Q000502:physiology*; D001931:Brain Mapping; D002540:Cerebral Cortex / Q000502:physiology; D002755:Choice Behavior / Q000502:physiology; D016000:Cluster Analysis; D003657:Decision Making / Q000502:physiology*; D059907:Functional Neuroimaging; D006801:Humans; D016014:Linear Models; D008279:Magnetic Resonance Imaging; D015233:Models, Statistical; D017397:Prefrontal Cortex / Q000502:physiology; D011594:Psychometrics; D012306:Risk
keywords: CEAD method; brain imaging; decision making; fMRI; factor structure; inference on clusters; neuroeconomics; risk; risk attitude; semiparametric model; spatial clustering