So today we will discuss your economics
mechanisms sp far with decisions in
various social context.
We are social animals, and
normally we make decisions in groups.
So for example, our economy is a form
of competitive or cooperative behavior.
So today we'll try to understand,
how do we take into account decisions
of others while making own decisions?
So, during this course, we discussed
the decision-making mechanisms at
various levels of complexity.
So, we first discussed
the role of neurons,
of single neuron in
decision-making process.
We discussed the activity of neurons
in the area LAP, for example.
So next, we discuss the role
of different brain areas, for
example, the functionality of the nucleus
contents of the ventral striatum or
the role of the orbitofrontal cortex and
amygdala in decision-making.
So next,
we moved further up in the levels of
complexity of the mechanism
of decision-making.
And we discussed the role of emotions and
our cognitive functions in
the decision-making process.
So today, we'll make a step further, and
we will discuss the decision
making in various social context.
So, as social animals, we do normally
make decisions in groups and
today we will try to use
a neuro-economics approach to
understand the neuro-biological
mechanism of decision-making in groups.
So, in order to start our discussion,
I would first make one step further and
I would discuss their role of evolution in
our cooperative and competitive behavior.
So according to the modern version of
natural selection theory, multilevel
selection theory, we are affected
by different evolutionary factors.
So first of all, our genes, our different
version of genes, compete with,
with each other.
And also our genomes,
our chromosomes, the sets of genes,
compete with each other at the level
of individuals within the group.
So, the modern version of
the natural selection theory,
multi-level selection theory,
suggests that we,
actually, are affected by
different evolutionary factors.
So, first of all, our genes or
different versions of
the same genes compete with each other
at the level of the single individual.
So, individuals compete with each
other and natural selection here,
promotes competitive behavior,
competitive behavioral pattern.
But at the same time, we have
the members of the social groups and
different groups compete with each other.
So, you do the selection between
groups within the population.
Natural selection can promote
within group cooperation.
So at the same time, we are affected
by two important evolutionary factors.
So first of all,
natural selection promotes
a competition between single individuals,
or the group selection
promotes a cooperation within the group
and competition between groups.
So, we can summarize this idea in,
using the multilevel selection theory.
So selection between individuals
within groups favors cheating
non-cooperative behavior.
While selection between groups within
the total population promotes cooperation
within the group to increase the relative
fitness of the group as a whole group.
so it looks like we are very
well suited for cooperation, so
modern theory suggests that at the group
level cooperation is advantageous.
So when we compete with other groups,
it makes sense to
cooperate within the group because
it brings us additional benefits.
So in our society it is quite easy
to protect the group of altruists,
the group of cooperators from free riders.
So we can actually punish non-cooperators.
And the price for
the punishment is relatively low nowadays.
We can use weapons to punish
non-cooperative people.
So we can reinforce cooperation
within the group quite easily.
We also have quite long childhood.
So we have long socialization.
During the childhood we can internalize
social norms, social norms of cooperation.
So we are very well suited,
to internalize,
group norms of cooperative behavior.
And finally, of course, we are social
animals we live in groups, and
compete with other groups.
This between group competition
stimulates within-group cooperation.
So it is really important to understand
the relatively simple idea suggesting that
our nervous system is
adapted to our social life.
So basically the same way as
we adapted to the environment.
So many studies show that there is
a correlation between the complexity of
the social life and
the complexity of the brain.
So, many studies show that the relative
volume of the neocortex correlates with
the social group size.
It also correlates with their social
skills used in mating behavior.
It also correlates with
the frequency of deception and
with the frequency of social play.
So it looks like the complexity
of our brain correlates with
the complexity of our social behavior.
So perhaps our brain is adapted to
the complex social environment.
In the same way as it is adopted for
the physical environment.
So, here you see a correlation
between there neocortex ratio.
The complexity of the brain and
the mean groups sizes.
And, this picture is plotted for
our relative for monkeys and
apes and you see a strong correlation
between the mean group size, and
the complexity of the brain.
So, our brains are designed by evolution
to cope with very complex social tasks.
So we adapted to a/ very
complex social environment.
And the more complex
the social environment is,
the more complex brains we need.
And this is a simple idea, but
it is important to understand that
our brains are adapted to the social
environment in the same way as they
are adapted to the initial environment.
So indeed, our brains are adapted for
the environment, for
the particular environment of our planet.
So, here you see two
copies of the same image.
And the upper version of
this image is clearly
perceived as a depression of the surface,
as a kind of welling.
As the lower version of the same image,
that these were dated is clearly perceived
as a hill, as an elevation of the surface.
So why does our brain perceive so
differently as the same image?
Simply because perhaps it
assumes that in our planet,
in our environment,
light comes from above.
So, based on this assumption,
brain interprets very differently the same
image, because it focuses on
the distribution of the light, and
shadows, assuming that
light comes from above.
But in the same way, our brain is
adapted to the social environment, so
we are very sensitive to
particular social queues.
So, for example here, I show you a mask.
But pay attention that when,
this mask will be rotated and
you will see the inside
surface of the mask,
your brain will automatically reconstruct
the normal shape of the face.
You would not see the inverted face.
You will see a normal face
that pops out of the surface.
So your brain automatically reconstruct
a normal shape of the face.
Because for millions of years, we were
surrounded by normal face we are not
surrounded by inverted face and our brain
automatically interprets the inside
surface of the mask as a normal face and
So this is a very strong illusion and
it shows that we are particularly
sensitive to some social cues and
the face is very important social cues.
The face contains a lot of
important social information and
our brain is very biased toward faces.
So we can illustrate this sensitivity
to faces by another example.
So here you see my face, I made this
photo more than ten years ago in Finland,
to illustrate the sensitivity
to faces of our brain.
And now I will change
few things in my face.
So do you see anything
unusual on this face?
Actually what I did, I inverted
the position of my eyes and of my mouth.
So I will show you this version.
So, here you see a very ugly face,
but when I rotate this face,
you would not see this very ugly features.
Your brain would automatically reconstruct
this face as more, or less, normal.
But in fact,
this is a very ugly face that is
automatically interpreted as some
say normal while it is rotated.
So, we are particularly
sensitive to faces, and
our brain has a tendency to
reconstruct faces to a normal shape
because we are surrounded by faces
during the millions of our evolution.
And faces are very important social cues.
So I used a photo of my face
to illustrate this tendency,
because I wanted to exchange the classical
photos used in the previous studies.
In the previous studies,
the photos of Margaret Thatcher were used,
but now the students do not
know Margaret Thatcher.
That why I try to illustrate
this effect using my face.
So to finish this story about
our sensitivity to faces,
I would also mention the very
interesting disorder, prosopagnosia.
This is so called face blindness.
So some patients are not
able to recognize faces.
So the recent studies show that there is
a genetical background for this disorder,
and approximately 2.5% of
the population inherit this disorder.
This is a very interesting disorder
when people are not able to see or
recognize faces and
sometimes all the faces.
So they normally recognize objects but
they are face blind,
they do not recognize faces.
So if you would be interested in this
disorder, I recommend you to browse some
diaries or web pages of prosopagnosic
patients, so you will see how these
patients try to explain their recognition
of the relatives of their friends.
And, it's quite difficult to
understand this case when
people are not able to see faces and
only faces.
But, to come back to our main story.
I have to say that our brain
is particularly sensitive to
the social information, we're sensitive
to emotional expressions, for example,
among different cultures, people easily
understand basic emotional expressions.
We can understand the emotional
expressions of the members of
other cultures, of other races.
But we also, perhaps,
are sensitive to more complex cues.
Some ethologists suggest that
we automatically react to
the perceived size of other people.
So perhaps you noticed that the size of
the person quite often indicates
the social status of the person.
So, and some ethologists believe
that perhaps we inherit this
ability to react to the perceived
size of other people.
So the size of the bodies,
not only important for
politicians, but also, for
example, for car manufacturers.
So, very different versions of the car,
different brands,
they actually emphasize your status.
So, the larger car you have, so is
the larger perceived status of the person.
So it looks like we are sensitive to
the particular social information.
So our brain is predesigned
by natural selection to be
very effective in decoding
of the social information.
But let's now try to understand how how do
we make decisions in this social context.
So you'll remember that for individual
decisions, we use the decision matrices.
So here, we see an example
of a very simple decision.
Whether to take an umbrella or not to take
an umbrella, depending on the weather.
[COUGH] So if it rains, perhaps it
makes sense to take an umbrella.
If it doesn't rain, it, perhaps doesn't
make a sense to take an umbrella.
So here we see the matrix that
contains different decisions and
different states of nature.
And we'll also see here
the expected outcomes.
So, our utility assigned
to different outcomes.
So how to study decisions
in the social context.
So perhaps we can simply exchange
the states of nature by social agents.
So instead of rain, we can consider
here a small boy who lives nearby,
who can actually shoot a watergun machine.
And this boy will be
very happy to see us wet.
So we can actually have
the same decision matrix.
We decide was it to take,
take an umbrella.
But we have to add here
decisions of the second player.
And, perhaps we can add to our matrix,
also their utility of the outcomes for
the second player.
And here we actually have an example
of the game played by two players.
And we can use game theory to understand,
how should these two players
behave in such a situation.
So I suggest that we will use game
theory to investigate decisions in
the social context.
It provides us a formal approach
to explain optimal decisions.
So actually game theory would help us to
understand how decision-makers
interact with each other.
So here agin is
a competitive activity where
players compete with each other
according to the set of rules.
So the standard game has two components.
The set of actions and payoff function.
So we can for
example cooperate or defect and
we also can assign certain
utility to different outcomes.
So utility here represents decision makers
preferences for different outcomes.
So to analyze behavior of
two players during the game,
we can use the rule of maximization.
So we basically assume that each player
would select the alternative with
the highest utility.
So today we will use strategic
games to model decisions of
people in different social content.
So, strategic games should
contain a set of players.
Each player would have a set of actions,
each player would have clear
preferences for different outcomes.
So can we explain the real life decisions
using the game theory and strategic games?
Can we, for example, explain what
should be the optimal decision of
the president of the United States.
The president of the country that, for
example, already has the nuclear bomb.
But, president gets an information
that another country, for
example, Soviet Union,
soon will also get a nuclear bomb.
What should the president
of United States do.
Should he preemptively attack,
Soviet Union,
or he has to wait and
try to find a cooperative solution.
So after the break we will see that
the game theory suggests announcer
this dilemma and we will see how
effective is this suggestion