Economic value in the Brain: A meta-analysis of willingness-to-pay using the Becker-DeGroot-Marschak auction.

Forming and comparing subjective values (SVs) of choice options is a critical stage of decision-making. Previous studies have highlighted a complex network of brain regions involved in this process by utilising a diverse range of tasks and stimuli, varying in economic, hedonic and sensory qualities. However, the heterogeneity of tasks and sensory modalities may systematically confound the set of regions mediating the SVs of goods. To identify and delineate the core brain valuation system involved in processing SV, we utilised the Becker-DeGroot-Marschak (BDM) auction, an incentivised demand-revealing mechanism which quantifies SV through the economic metric of willingness-to-pay (WTP). A coordinate-based activation likelihood estimation meta-analysis analysed twenty-four fMRI studies employing a BDM task (731 participants; 190 foci). Using an additional contrast analysis, we also investigated whether this encoding of SV would be invariant to the concurrency of auction task and fMRI recordings. A fail-safe number analysis was conducted to explore potential publication bias. WTP positively correlated with fMRI-BOLD activations in the left ventromedial prefrontal cortex with a sub-cluster extending into anterior cingulate cortex, bilateral ventral striatum, right dorsolateral prefrontal cortex, right inferior frontal gyrus, and right anterior insula. Contrast analysis identified preferential engagement of the mentalizing-related structures in response to concurrent scanning. Together, our findings offer succinct empirical support for the core structures participating in the formation of SV, separate from the hedonic aspects of reward and evaluated in terms of WTP using BDM, and show the selective involvement of inhibition-related brain structures during active valuation.

Bid outcome processing in Vickrey auctions: An ERP study.

Online retailers often sell products using a socially competitive second-price sealed-bid auction known as a Vickrey auction (VA), an incentivized demand-revealing mechanism used to elicit players' subjective values. The VA presents a situation of risky decision-making, which typically implements value processing and a loss aversion mechanism. Neural outcome processing of VA bids are not known; this study explores this for the first time using EEG. Twenty-eight healthy participants bid on household items against an anonymous, computerized opponent. Bid outcome event-related potentials were predicted to differentiate between three conditions: outbid (no-win), large margin win (bargain), and small margin win (snatch). Individual loss aversion values were evaluated in a separate behavioral experiment offering gains or losses of variable amounts but equal chances against an assured gain. Processing outcomes of VA bids were associated with a feedback-related negativity (FRN) potential with a spatial maximum at the vertex (251-271 ms), where bargain win trials resulted in greater FRN amplitudes than snatch win trials. Additionally, a P300 potential was sensitive to win versus no-win outcomes and to retail price. Individual loss aversion level did not correlate with the strength of FRN or P300. Results show that outcome processing in a VA is associated with FRN that differentiates between relatively advantageous and less advantageous gains, and a P300 that distinguishes between the more and less expensive auction items. Our findings pave the way to an objective exploration of economic decision-making and purchasing behavior involving a widely popular auction.