The neural dynamics of reward processing during sealed-bid second-price auctions

Newton-Fenner, Alice (2023) The neural dynamics of reward processing during sealed-bid second-price auctions. PhD thesis, University of Liverpool.

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Abstract

During economic decision-making, choice alternatives are evaluated and compared, and the option yielding the greatest expected value is selected. Appraising the resulting decision outcomes, and comparing expected rewards to received rewards, are essential for the updating of subjective values and the adaption of subsequent decision-making behaviours. This thesis synthesised neuroeconomic fMRI research of economic valuation, and examined the spatiotemporal dynamics of value processing in the brain, during incentivised demandrevealing auction environments. Brain processes related to subjective valuation and reward processing were investigated using the Becker-DeGroot-Marschak (BDM) task, a second-price sealed-bid auction common in fMRI research, and the strategically equivalent Vickrey auction (VA), a socially competitive paradigm popular with online retailers. Three experimental chapters combine a meta-analysis of fMRI studies with two primary EEG studies to exploit the methodologies’ respective high spatial and temporal resolutions. A systematic review and activation likelihood meta-analysis was conducted on fMRI studies implementing the BDM task to measure subjective value. Subsequently, EEG recordings and event-related potential (ERP) analysis were used to investigate the neural mechanisms underlying reward processing of decision outcomes. Findings offer succinct empirical support for the ventral striatum and ventral medial prefrontal cortex as the core structures responsible for automatic formation of economic value, separate from the hedonic aspects of reward. The meta-analysis also provided evidence of the selective involvement of inhibition-related brain structures during active economic valuation. Further, reward-related ERPs were selectively elicited during the auction outcome period for both tasks. A feedback-related negativity was elicited in both auctions, and differentiated between more and less relatively advantageous win outcomes. The P300 component showed 12 distinct sensitivities to outcome salience, social context, and value, as defined by market price and subjective willingness-to-pay. The current thesis demonstrated the neural representation of economic valuation and reward processing in incentive-compatible contexts, recorded by means of EEG and fMRI. A subset of the core brain valuation network showed a domain general and automatic increase in BOLD activation in line with willingness-to-pay values. Further, multiple distinct ERPs differentially encoded bid outcomes during the two auction tasks, with distinct cortical responses to valence, motivational significance and social context of auction outcomes.

Item Type:	Thesis (PhD)
Divisions:	Faculty of Health and Life Sciences > Institute of Population Health
Depositing User:	Symplectic Admin
Date Deposited:	11 Aug 2023 15:16
Last Modified:	11 Aug 2023 15:16
DOI:	10.17638/03171186
Supervisors:	Stancak, Andrej
URI:	https://livrepository.liverpool.ac.uk/id/eprint/3171186