Spatiotemporal Brain Signatures of Risk and Reward

35 Pages Posted: 29 Aug 2016 Last revised: 31 Aug 2016

See all articles by Anjali Nursimulu

Anjali Nursimulu

Ecole Polytechnique Fédérale de Lausanne

Ulrike Toepel


Peter Bossaerts

University of Cambridge

Micah Murray

University of Lausanne - The LINE (Laboratory for Investigative Neurophysiology); EEG Brain Mapping Core

Date Written: May 30, 2012


Rational economics and finance surmise that choices decree from a conscious arbitration between alternatives based on decision-theoretically computed values. Implicit in the computation of these option values are the perception and integration of different mathematical components (e.g., magnitude, valence, expected value and risk) of monetary rewards. Functional neuroimaging studies have consistently revealed that spatially distributed brain areas encode such mathematical moments that are the cornerstones of modern financial theory. However, the dynamics of the neurophysiological mechanisms whereby these computational parameters influence behavior remains poorly understood. To unravel the spatio-temporal electrophysiological (EEG) correlates of these computational statistics, we devised a novel experimental approach with sequentially presented information. Subjects decided whether or not to buy into a series of independent gambles while 128-channels EEG was acquired. Within a parallel factor (PARAFAC) analytical framework, constrained to take into account the physiological features of EEG signals and financial theoretic structure in the behavioral data, we identified for the first time and within a single experiment the EEG markers of mathematical moments and action values. Specifically, risk-related features - variance and skewness - are extracted within the first 350ms post-stimulus onset. EEG modulations predictive of choice and sensitive to expected value were observed 200ms prior to overt/registered choice. Distinct topographic maps indicate that the different processes are subserved by distinct networks of intracranial sources; the associated time courses occur at times in parallel albeit peaking at different latencies. Importantly, unlike option value computation and decision-making, information retrieval and choice implementation have time-consistent EEG signatures across subjects.

Keywords: Decision-making under risk, Mean-risk theory, Electroencephalography, Event-related potential, PARAFAC

Suggested Citation

Nursimulu, Anjali and Toepel, Ulrike and Bossaerts, Peter L. and Murray, Micah, Spatiotemporal Brain Signatures of Risk and Reward (May 30, 2012). Available at SSRN: or

Anjali Nursimulu (Contact Author)

Ecole Polytechnique Fédérale de Lausanne ( email )

Station 5
BAC 0.01
1015 Lausanne, CH-1015

Ulrike Toepel

Independent ( email )

Peter L. Bossaerts

University of Cambridge ( email )

Faculty of Economics
Cambridge, CB3 9DD
United Kingdom

Micah Murray

University of Lausanne - The LINE (Laboratory for Investigative Neurophysiology) ( email )



EEG Brain Mapping Core ( email )

Quartier Chambronne
Lausanne, Vaud CH-1015

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