Abstract
Humans exhibit a number of suboptimal behaviours in the wake of a loss. For
example, gamblers often 'chase' their losses in an attempt to break even.
Similarly, investors tend to hold on to losing stocks too long in the hope that the
declining share price might make a recovery. However, the neural mechanisms
that instantiate such behaviour are poorly understood. I begin the introductory
chapter with a basic historical overview of fundamental economic concepts,
interleaving intersecting ideas from psychology and neuroscience. This leads to
a more in-depth exploration of the notion that loss-related behavioural biases
might provide insight into the neural mechanisms that underlie risky choice.
From this, I argue that rats represent a viable animal model of risky decision-
making for neuroeconomic research. The original research presented in
Chapters 2 - 5 pave the way toward advancing our current understanding of
loss-related biases in behaviour with rat models of risky decision-making. By
employing insight from psychology and economics, I developed two models of
rat behaviour that can be used to study the neural substrates of loss valuation. I
presented the experimental paradigms in Chapters 2 and 5, while
demonstrating novel loss-related correlations between the midbrain dopamine
system and observed loss behaviour in Chapters 3 and 4. The results
presented in Chapter 5 demonstrate that rats are capable of producing
behavioural patterns akin to loss aversion and the disposition effect. This work
has also highlighted a number of areas for future research. In Chapter 6, I
explore potential theoretical implications of the results discussed in previous
chapters. In summary, this thesis uses experimental risky decision-making
tasks in rats to advance our current knowledge of the ways in which concepts
such as loss aversion critically influence our internal representation of value.
Table of Contents
Declarations ii
Dedications vii
Abstract 1
Chapter 1
2
General Introduction 2
Abstract 3
Introduction 4
Homo Economicus: Rational Economics 5
Expected Value 5
Expected Utility 9
General Axiom of Revealed Preferences (GARP) 11
Subjective Expected Utility 13
Homo Sapiens: Irrational Economics 15
Prospect Theory 17
Efficient Markets: Rational Finance 22
Risk-Return Models 24
Efficient Markets 25
Inefficient Markets: 'Noise Traders' 28
The Disposition Effect 29
Economic Animals 32
Reward Learning and Expectation in the Brain 35
Value Representation in the Brain 40
Encoding Risk in the Brain 49
Discussion 52
Chapter 2 55
A novel gambling task to capture resource loss in rats 55
Abstract 56
Introduction 57
Methods 62
Animals 62
Apparatus 62
Task Design 63
Discrimination task 66
Mixed contingencies 67
Behavioural measurements 67
Data Analysis 67
Results 69
Discrimination Task 69
Baseline Behaviour - Mixed Risk And Reward 70
Loss-related behaviour 73
Stay-shift behaviour 74
Effect of losing on poke duration 79
Discussion 82
Chapter 3 89
Loss-stay behaviour in rats with more Substantia Nigra pars compacta
neurons is mitigated by dopamine antagonism 89
Abstract 90
Introduction 91
Methods 92
Pharmacological Manipulation 92
Histology 93
Data Analysis 94
Results 96
Effects of Flupenthixol on behaviour 96
Effects of DA antagonism on poke duration 98
Effects of DA antagonism on choice 99
Discussion 106
Stay-shift pattern of behaviour 106
Dopamine Antagonism 107
Chapter 4 112
Disassociating effects of dopamine neurons, probability and reward in a
rat gambling task 112
Abstract 113
Introduction 114
Methods 116
Animals 116
Apparatus 116
Training 117
Task Outline 117
Behavioural measurements 120
Histology 120
Data analysis 122
Results 123
Contingency 123
Stay-Shift Strategy 129
Neuron counts and behaviour 130
Discussion 133
Chapter 5 140
Rats exhibit anchoring, loss aversion and the disposition effect in an
experimental stock market task 140
Abstract 141
Introduction 142
Methods 145
Animals 145
Apparatus 146
Training 146
Testing 147
Task Outline 147
Block 1 148
Block 2 148
Pricing 150
Selling 150
Buying 151
Holding 152
Data Analysis 152
Summary Measures 153
Proportion of Realized Gains & Losses 153
Cox Proportional-Hazard Modelling 154
Results 156
Descriptive Statistics 156
Manipulation check: Trading payoffs are greater than dividend payoffs 158
The transaction cost of trading within the task 159
Rats exhibit reference-dependent behaviour 161
Rats are more risk-seeking after a loss than after a gain (loss-aversion) 163
Rats perform suboptimally when trading 165
Rats exhibit the disposition effect 172
Discussion 179
Reference Dependence (Anchoring) 180
Loss Aversion 181
Disposition Effect 181
Information salience & content 184
Future directions 186
General Discussion 189
Summary 190
Operationalizing Resource Loss 191
Loss-dependent behaviour 192
Brain and behaviour 196
Conclusions 201
Appendices 202
Appendix 1 202
Appendix 2 203
Appendix 3 206
Appendix 4 207
