When you're making a deal, what's going on in your brain? | Colin Camerer

Summary

This talk explores the strategizing brain using game theory and neuroscience to understand social interactions when value is at stake. It delves into cognitive hierarchy theory and Nash equilibrium analysis, demonstrating how people make decisions in games and real-life scenarios. The speaker presents data from experiments involving number selection games and bargaining, highlighting brain activity patterns in social decision-making. Furthermore, the talk compares human strategic thinking with that of chimpanzees, revealing that chimps may be better competitors according to game theory.

Takeaways

• 🧠 The talk focuses on understanding the strategizing brain using game theory and neuroscience.
• 📊 Game theory provides a mathematical taxonomy of social life, predicting actions and beliefs in competitive and cooperative situations.
• 🎲 A simple game illustrates strategic thinking: players choose numbers, and the winner is closest to two-thirds of the average.
• 🤔 People strategize at different levels, from simple averages to more complex recursive thinking.
• 🧩 Cognitive hierarchy theory explains varying levels of strategic thinking and its limitations.
• 📉 Nash equilibrium is a state where everyone has figured out what others will do, but it's not always practical for first-time players.
• 🧠 Brain activity during strategic games shows specific areas involved in 'theory of mind' and mentalizing.
• ⚖️ A bargaining game reveals how people negotiate over unknown amounts, with brain activity indicating agreement or disagreement.
• 🐒 Chimpanzees outperform humans in strategic games, adhering closely to game theory predictions.
• 🔍 The study of brain activity in strategic contexts can inform about social interactions, development, and resolving conflicts efficiently.

Q & A

What is the main topic of the talk?

The main topic of the talk is the strategizing brain, which combines tools from game theory and neuroscience to understand social interactions when value is at stake.

How is game theory described in the script?

Game theory is described as a branch of applied mathematics, primarily used in economics, political science, and biology, providing a mathematical framework to predict behaviors in social situations where everyone's actions affect each other.

What is the simple game introduced to illustrate strategic thinking?

The simple game involves participants choosing a number from zero to 100, computing the average, and awarding a prize to the person closest to two-thirds of the average. It serves as a model for strategic decision-making in various competitive and cooperative scenarios.

What does the cognitive hierarchy theory suggest about human strategic thinking?

The cognitive hierarchy theory suggests that people think in layers or steps, with each step representing a deeper level of strategic consideration. It also accounts for how many people stop at different levels of thinking.

What is the Nash equilibrium and how does it relate to the simple game?

The Nash equilibrium is a concept in game theory where every player has figured out what the others will do and acts accordingly. In the context of the simple game, the Nash equilibrium would predict that everyone plays zero, as they all want to be below the others.

What does the experiment involving 9,000 people reveal about human behavior in the simple game?

The experiment reveals that people tend to choose numbers around 33 and 22, indicating one or two steps of strategic thinking, rather than the Nash equilibrium prediction of zero. It also shows a minority choosing zero or one, likely adhering to equilibrium analysis.

Which brain areas are activated when people play the simple game against humans versus computers?

When playing against humans, the brain activates areas associated with the 'theory of mind' circuit, including the medial prefrontal cortex, dorsomedial prefrontal cortex, ventromedial prefrontal cortex, and anterior cingulate. These areas are less active when playing against a computer.

What insights can be gained from the bargaining game involving EEG electrodes?

The bargaining game EEG study suggests that early brain activity patterns can potentially predict the likelihood of reaching an agreement or disagreement, which could have applications in conflict resolution and negotiation strategies.

How do chimpanzees perform in the memory test conducted by the Primate Research Institute?

Chimpanzees perform exceptionally well in the memory test, quickly and accurately recalling a sequence of numbers after a brief exposure and using this information to obtain a reward.

What does Tetsuro Matsuzawa's 'cognitive trade-off hypothesis' propose about chimpanzees?

The 'cognitive trade-off hypothesis' suggests that chimpanzees may have developed and preserved strategic thinking abilities that are crucial for negotiating status and winning competitions, even at the expense of other cognitive functions.

How do chimpanzees compare to humans in terms of adhering to game theory predictions in the matching and mismatching game?

Chimpanzees adhere more closely to game theory predictions, adjusting their behavior in response to changes in payoffs more accurately than humans, indicating a stronger competitive instinct in chimpanzees.