Value Functions Incorporating Disappointment and Regret
Published Online: 14 JAN 2011
Copyright © 2010 John Wiley & Sons, Inc. All rights reserved.
Wiley Encyclopedia of Operations Research and Management Science
How to Cite
Moretti, L., Cristofori, I. and Sirigu, A. 2011. Value Functions Incorporating Disappointment and Regret. Wiley Encyclopedia of Operations Research and Management Science. .
- Published Online: 14 JAN 2011
How humans make decisions is attracting more and more interest of neuroscientists. The understanding of neural mechanisms underlying the way people choose, attach value to things, set preferences, enjoy reward, or fear punishement is now possible using an array of methods. Game theory, a highly influential view in economics, can predict choices made in various situations involving strategic thinking or competitive interactions among individuals. Its assumption is that under most circumstances people will act as rational decision makers. Recent neuroscientific findings, however, have shown that emotions such as regret, interact with utility-maximization in ways that challenge the theory. Interestingly, the intensity of regret has been found to be a better predictor of subsequent choices than expected utility alone. Specific brain regions such as the orbitofrontal cortex and the amygdala seem crucial for experiencing the complex emotion of regret.
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