In Dr. Sweis’ talk about forms of regret, the main factor being observed where the levels of cortisol that goes through the CREB molecular mediators. This specific mediator regulates responses to pertain to activating rewarding or stressing behaviors in the nucleus accumbens (NAc) and the medial prefrontal cortex (mPFC). While transcription factors that come from CREB are the same, the individual regions account for two different behaviors: the NAc will produce stress response and the mPFC will produce a behavior that allows for resilience in the face of stress. While these tests were conducted on mice, they are model animals that present a high genetic similarity to humans; therefore, making them suitable subjects for the behavioral experiment. Even though the stimulus for the feelings of regret was finding food in a maze with a time limit, there are many applications to this kind of research in daily human activities. Everyday financial decisions are some of the most common ways in which regret and risk tolerance can be observed, whether for a large purchase like a house or car, or deciding whether or not a side dish at a good restaurant is worth spending money for. “Neuroeconomics: Making Big and Small Decisions” by Michael W. Richardson on Brainfact.org explores the growing field of neuroeconomics through the context of hormonal and neurophysiological stimulation from various financial institutions.
One
hormone that has a strong effect towards making riskier decisions is testosterone,
as there is a positive correlation between the stockbrokers that present higher
levels of testosterone and the willingness to invest large sums of money in the
stocks of their choosing. On the other hand, higher levels of cortisol showed a
correlation to making less risky investments based with the same amount of
money. While correlation is not causation, this can point to other key factors
that are in the hormonal pathway of testosterone being the cause for an
increase in tolerance for uncertainty. Furthermore, Oxytocin also plays a large
role when making decisions. More specifically, when the choosing a course of
action with another person present, a spike in oxytocin levels generates higher
feelings of trust and confidence while decreasing those of stress. Oxytocin is
a key hormone that is expressed from the hypothalamus, the cerebral region that
also oversees expression of dopamine: the hormone that directs mood.
Lastly,
the more physiological evaluation of risk taking is mentioned in the article: the
effects of gambling and the risk tolerance that comes with it. Often times in
high-roller games, people are willing to back down from losing their winnings because
they no longer feel that the potential reward is worth putting what they have
in jeopardy. The insular cortex sees stimulation when players gauge whether or
not to continue betting.
In conclusion,
while economics is largely numerical, psychology and neuroscience have started
to gain a foothold in the financial sector, as more and more neuroscientific
findings open up new ways to interpret good or bad decision for humans in financial
contexts.
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