Neuroeconomics: Ambiguity and Pessimism Bias

Ambiguity and Pessimism Bias

Although Saturday Night Live may be in the midst of a prolonged rough stretch, Debbie Downer is one of my all-time favorite characters (see a video or the Wikipedia entry). For those who are unfamiliar, the central figure in these sketches is a miserable cynic who constantly rains pessimism on others’ parades. A recent study, published in NeuroImage, examines if this type of behavior has neural underpinnings:

Based on the assumption that information processing is biased towards potentially negative events in order to prepare response strategies efficiently for coping with unfavorable consequences, we hypothesized that emotion processing brain areas are activated during ‘unknown’ expectation which are also activated during expectation of negative events.

Here is the authors’ main result:

Taken together, we found evidence for a ‘medial-thalmic-insular-inferior-frontal-rubral’ circuit associated with expecting events of unknown emotional valence, the activity of which resembled the expectation of negative events and also correlated with individual depressiveness. The revealed areas are consistent with the proposed ‘ventral system’ of emotion processing for identification of the emotional significance of a stimulus, production of affective state, and autonomic response regulation…Our results are consistent with the view of brain activity reflecting a ‘pessimistic’ or ‘cautious’ bias toward future events.

Apparently, we’re all wired to be downers in a world characterized by pervasive ambiguity. Somewhere in the course of human evolution, though, people’s views toward their pessimistic peers have changed – whereas downers of the distant past likely served to possess and distribute valuable information, they’re a drag in 21^st-century America. What used to be an advantageous survival strategy is now, at least in well-off societies, a social nuisance and an object of mockery. Is this transformation not a testament to how well off we have become?

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Very very interesting piece. I posted some comments on http://www.capyblanca.com/2007/02/what-me-paranoid.html

Posted by:Alex Linhares | February 20, 2007 at 12:16 PM

Very cool post,thanks.

Posted by:MarkT | August 03, 2007 at 03:24 PM

This makes me think of the idea I have for an article on the origins of anti-economic and economic thinking, including why economic thinking appears to be counter-intuitive. I think it has something to do with our evolution as a social species. The recent article in Science showing that chimapnzees play the ultimatum game more rationally (from an economist's POV), but less socially, than do humans is itself interesting, and quite suggestive.

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Posted by:James J | November 25, 2007 at 12:24 AM

"What used to be an advantageous survival strategy is now, at least in well-off societies, a social nuisance and an object of mockery. Is this transformation not a testament to how well off we have become?"

I'd have to say: No, by no means a testament to anything. In fact, I would wager that doom and gloomers were considered just as much of a social nuisance in every culture throughout history.

A little social anthropological reading would most likely back me up. But as I'm much too lazy to suggest links today, I'll try to reconstruct some of my readings into a coherent thesis.

In aboriginal tribes the shaman, wise (wo)man, tribal healer, etc. was the entity that guided the tribe to safety, foretold of danger and was generally the social "critic"; someone who could point out dangerous systemic flaws without fear of expulsion or retribution. In some cultures (even ours if you are flexible re: definitons), they still perform this function. For us they are comedians, artists, even potentially reporters (although I can't think of one that fits the bill offhand).

What anthropologist have found, fairly consistantly, is that these people are almost always shunted to the edges of society, lacking social and physical integration into the tribe. They are revered and powerful, but very often feared. They perform valuable services to their kinspeople; but in the end, we are above all social creatures. We want to sit and chat, not ponder scary potentials. So we don't want Bill Maher nagging us about how blind and stupid we are 24/7. It beomes grating, even though you can accept it in small doses and even agree with it.

I would say that the only thing that has changed is the job title. Untouchable to PoopSmith to Stable Boy to Chamber Maid to Janitor. They all deal with the things we don't want to think about. Our denial systems have become more fine tuned, but they system is still firmly in place.

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Posted by:Dr.Paul Smith | March 12, 2008 at 05:07 PM

Great post. Thank you for your insight of knowledge on this subject.

Posted by:Brad Quick | April 23, 2008 at 02:01 AM

Robert J. Ringer used to refer to this type of person as the contract killer. Just try to buy or sell a house, and out comes a legal self-styled expert who will try to kill the contract by pointing out all the dangerous potentials. Rather than trying to make something successful, he prefers to influence events to emulate his own failure of a life. Recognize the person and avoid him like the plague. http://www.cathetel.com

Posted by:Angel | May 02, 2008 at 04:43 PM

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