Anterior cingulate activity modulates nonlinear decision weight function of uncertain prospects

Prospect theory developed by Kahneman and Tversky has been among the most influential psychological models and explains many nonnormative decision-making phenomena, e.g. why people play the lottery or bet on long-shots. A Certainty Equivalent procedure was used during functional magnetic resonance imaging to identify the neural substrates that are important for nonlinear transformation of probabilities to decision weights. Differential activation in the anterior cingulate cortex during high versus low probability prospects correlated (r = 0.84, P < 0.01) with the degree of the nonlinearity of the transformation of probabilities to decision weights, which indicates that risk-seeking behavior for low probability prospects and risk-averse decision-making for mid to high probability prospects may be due to a lack of controlled processing by the anterior cingulate cortex. (c) 2005 Elsevier Inc. All rights reserved.