Abstract

http://ssrn.com/abstract=2143215
 


 



Neural Random Utility and Measured Value


Ryan Webb


New York University (NYU) - Center for Neuroeconomics

Paul W. Glimcher


New York University (NYU) - Center for Neuroeconomics

Ifat Levy


Yale University - School of Medicine

Stephanie C. Lazzaro


University College London - Institute of Cognitive Neuroscience

Robb B. Rutledge


University College London - Wellcome Trust Centre for Neuroimaging

October 30, 2013


Abstract:     
We present a method for relating neural measurements of value to choice behaviour. In a previous study, precisely targeted measurements of brain activity were made in the medial prefrontal cortex of subjects while they considered individual consumer goods. We present here two advances. First, we develop an empirical framework for relating this class of measured value data to choice prediction. Second, we apply a benchmarking tool to compare the predictive power of a measured value dataset with established techniques. We find that our measured neural activity cardinally encodes valuations and predicts choice behaviour, though a significant degree of measurement error affects prediction rates. Accounting for measurement error and combining neural data with standard observables improves predictive performance. We also note some potential normative implications of our measured value approach.

Number of Pages in PDF File: 36

Keywords: Neuroeconomics, Measured Value Methods, Random Utility, fMRI, BOLD, Stochastic Choice

JEL Classification: D87

working papers series


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Date posted: September 7, 2012 ; Last revised: October 31, 2013

Suggested Citation

Webb, Ryan and Glimcher, Paul W. and Levy, Ifat and Lazzaro, Stephanie C. and Rutledge, Robb B., Neural Random Utility and Measured Value (October 30, 2013). Available at SSRN: http://ssrn.com/abstract=2143215 or http://dx.doi.org/10.2139/ssrn.2143215

Contact Information

Ryan Webb (Contact Author)
New York University (NYU) - Center for Neuroeconomics ( email )
4 Washington Place, Room 809
New York, NY 10003
United States
Paul W. Glimcher
New York University (NYU) - Center for Neuroeconomics ( email )
4 Washington Place, Room 809
New York, NY 10003
United States
Ifat Levy
Yale University - School of Medicine ( email )
Department of Psychiatry
New Haven, CT 06520-8034
United States
Stephanie C. Lazzaro
University College London - Institute of Cognitive Neuroscience ( email )
17 Queen Square
London WC1N 3AR
United Kingdom
Robb B. Rutledge
University College London - Wellcome Trust Centre for Neuroimaging ( email )
London, WC1N3BG
United Kingdom
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