Natural Rationality | decision-making in the economy of nature


The neural basis of risk sensitivity and temporal discounting

An agent is risk-sensitive if she is risk-averse or risk-prone in certain decision-making. Most people are risk-averse in gain but risk-prone in lost ("When you got nothing, you got nothing to lose" dixit Dylan). "Temporal discounting" refers to the weakening of consequence effects due to delay; you know, that bird in the hand that is better than two in the bush?. According to a new study by Hayden and Platt in the January issue of Current Biology, these two phenomena share the same neural mechanisms. Evaluating risky prospects and evaluating prospects in a temporal dimension would then be two sides of the same coin.