When you're making a deal, what's going on in your brain?
-
0:01 - 0:03I'm going to talk
about the strategizing brain. -
0:03 - 0:06We're going to use
an unusual combination of tools -
0:06 - 0:07from game theory and neuroscience
-
0:07 - 0:10to understand how people interact socially
when value is on the line. -
0:10 - 0:14So game theory is a branch
of, originally, applied mathematics, -
0:14 - 0:16used mostly in economics
and political science, -
0:16 - 0:18a little bit in biology,
-
0:18 - 0:20that gives us a mathematical
taxonomy of social life -
0:20 - 0:23and it predicts
what people are likely to do -
0:23 - 0:24and believe others will do
-
0:24 - 0:27in cases where everyone's actions
affect everyone else. -
0:27 - 0:31That's a lot of things:
competition, cooperation, bargaining, -
0:31 - 0:33games like hide-and-seek and poker.
-
0:34 - 0:36Here's a simple game to get us started.
-
0:36 - 0:38Everyone chooses a number
from zero to 100, -
0:38 - 0:41we're going to compute
the average of those numbers, -
0:41 - 0:45and whoever's closest to two-thirds
of the average wins a fixed prize. -
0:45 - 0:48So you want to be
a little bit below the average number, -
0:48 - 0:49but not too far below,
-
0:49 - 0:50and everyone else wants to be
-
0:50 - 0:53a little bit below
the average number as well. -
0:53 - 0:54Think about what you might pick.
-
0:54 - 0:55As you're thinking,
-
0:55 - 0:58this is a toy model of something
like selling in the stock market -
0:58 - 1:00during a rising market. Right?
-
1:00 - 1:03You don't want to sell too early
and miss out on profits, -
1:03 - 1:04but you don't want to wait too late
-
1:04 - 1:07to when everyone else sells,
triggering a crash. -
1:07 - 1:09You want to be a little bit
ahead of the competition, -
1:09 - 1:10but not too far ahead.
-
1:10 - 1:13OK, here's two theories
about how people might think about this, -
1:13 - 1:15then we'll see some data.
-
1:15 - 1:16Some of these will sound familiar
-
1:16 - 1:18because you probably
are thinking that way. -
1:18 - 1:20I'm using my brain theory to see.
-
1:21 - 1:24A lot of people say, "I really don't know
what people are going to pick, -
1:24 - 1:26so I think the average will be 50."
-
1:26 - 1:28They're not being really strategic at all.
-
1:28 - 1:31"And I'll pick two-thirds of 50.
That's 33." That's a start. -
1:31 - 1:33Other people who are
a little more sophisticated, -
1:33 - 1:35using more working memory,
-
1:35 - 1:36say, "I think people will pick 33
-
1:36 - 1:38because they're going to pick
a response to 50, -
1:39 - 1:41and so I'll pick 22,
which is two-thirds of 33." -
1:41 - 1:44They're doing one extra step
of thinking, two steps. -
1:44 - 1:45That's better.
-
1:45 - 1:48And in principle,
you could do three, four or more, -
1:48 - 1:50but it starts to get very difficult.
-
1:50 - 1:52Just like in language and other domains,
-
1:52 - 1:55we know it's hard for people
to parse very complex sentences -
1:55 - 1:56with a recursive structure.
-
1:56 - 1:58This is called the cognitive
hierarchy theory. -
1:58 - 2:01It's something that I've worked on
and a few other people, -
2:01 - 2:04and it indicates a hierarchy
along with some assumptions -
2:04 - 2:06about how many people
stop at different steps -
2:06 - 2:09and how the steps of thinking are affected
by lots of interesting variables -
2:09 - 2:11and variant people,
as we'll see in a minute. -
2:11 - 2:15A very different theory,
a much more popular one, and an older one, -
2:15 - 2:17due largely to John Nash
of "A Beautiful Mind" fame, -
2:17 - 2:19is what's called equilibrium analysis.
-
2:19 - 2:22So if you've ever taken
a game theory course at any level, -
2:22 - 2:24you will have learned
a little bit about this. -
2:24 - 2:26An equilibrium is a mathematical state
-
2:26 - 2:30in which everybody has figured out
exactly what everyone else will do. -
2:30 - 2:31It is a very useful concept,
-
2:31 - 2:34but behaviorally, it may not
exactly explain what people do -
2:34 - 2:36the first time they play
these types of economic games -
2:36 - 2:38or in situations in the outside world.
-
2:38 - 2:41In this case, the equilibrium
makes a very bold prediction, -
2:41 - 2:43which is everyone wants
to be below everyone else, -
2:43 - 2:45therefore they'll play zero.
-
2:46 - 2:47Let's see what happens.
-
2:47 - 2:49This experiment's been done
many, many times. -
2:49 - 2:51Some of the earliest ones
were done in the '90s -
2:51 - 2:53by me and Rosemarie Nagel and others.
-
2:53 - 2:56This is a beautiful data set
of 9,000 people -
2:56 - 2:59who wrote in to three newspapers
and magazines that had a contest. -
2:59 - 3:01The contest said, send in your numbers
-
3:01 - 3:04and whoever is closer to two-thirds
of the average will win a big prize. -
3:04 - 3:06And as you can see,
there's so much data here, -
3:07 - 3:08you can see the spikes very visibly.
-
3:08 - 3:11There's a spike at 33.
Those are people doing one step. -
3:11 - 3:13There is another spike visible at 22.
-
3:13 - 3:16And notice that most people
pick numbers right around there. -
3:16 - 3:18They don't necessarily pick
exactly 33 and 22. -
3:18 - 3:20There's something
a little bit noisy around it. -
3:20 - 3:22But you can see those spikes.
-
3:22 - 3:23There's another group of people
-
3:23 - 3:26who seem to have
a firm grip on equilibrium analysis, -
3:26 - 3:28because they're picking zero or one.
-
3:28 - 3:30But they lose, right?
-
3:30 - 3:33Because picking a number that low
is actually a bad choice -
3:33 - 3:36if other people aren't
doing equilibrium analysis as well. -
3:36 - 3:37So they're smart, but poor.
-
3:37 - 3:39(Laughter)
-
3:40 - 3:42Where are these things
happening in the brain? -
3:42 - 3:46One study by Coricelli and Nagel
gives a really sharp, interesting answer. -
3:46 - 3:50So they had people play this game
while they were being scanned in an fMRI, -
3:50 - 3:52and two conditions:
in some trials, they're told -
3:52 - 3:54you're playing another person
who's playing right now -
3:54 - 3:57and we're going to match up your behavior
and pay you if you win. -
3:57 - 4:00In the other trials, they're told,
you're playing a computer. -
4:00 - 4:02They're just choosing randomly.
-
4:02 - 4:04So what you see
here is a subtraction of areas -
4:04 - 4:07in which there's more brain activity
when you're playing people -
4:07 - 4:09compared to playing the computer.
-
4:09 - 4:11And you see activity
in some regions we've seen today, -
4:11 - 4:14medial prefrontal cortex,
dorsomedial, up here, -
4:14 - 4:16ventromedial prefrontal cortex,
anterior cingulate, -
4:16 - 4:19an area that's involved
in lots of types of conflict resolution, -
4:19 - 4:21like if you're playing "Simon Says,"
-
4:21 - 4:24and also the right and left
temporoparietal junction. -
4:24 - 4:27And these are all areas
which are fairly reliably known -
4:27 - 4:30to be part of what's called
a "theory of mind" circuit, -
4:30 - 4:31or "mentalizing circuit."
-
4:31 - 4:34That is, it's a circuit that's used
to imagine what other people might do. -
4:34 - 4:37So these were some
of the first studies to see this -
4:37 - 4:38tied in to game theory.
-
4:39 - 4:41What happens with these
one- and two-step types? -
4:41 - 4:43So we classify people by what they picked
-
4:43 - 4:47and then we look at the difference between
playing humans versus playing computers, -
4:47 - 4:49which brain areas
are differentially active. -
4:49 - 4:52On the top you see the one-step players.
Almost no difference. -
4:52 - 4:55They're treating other people
like a computer, and the brain is too. -
4:56 - 4:59The bottom players, you see
all the activity in dorsomedial PFC. -
4:59 - 5:01So those two-step players
are doing something differently. -
5:01 - 5:04You could say, "What can we do
with this information?" -
5:04 - 5:05You might be able to say,
-
5:06 - 5:08"This person's going to be
a good poker player," -
5:08 - 5:09or, "This person's socially naive,"
-
5:10 - 5:11and we might also be able to study things
-
5:11 - 5:13like development of adolescent brains
-
5:13 - 5:16once we have an idea
of where this circuitry exists. -
5:16 - 5:18OK. Get ready.
-
5:18 - 5:20I'm saving you some brain activity,
-
5:20 - 5:23because you don't need
to use your hair detector cells. -
5:23 - 5:26You should use those cells
to think carefully about this game. -
5:26 - 5:27This is a bargaining game.
-
5:28 - 5:31Two players who are being scanned
using EEG electrodes -
5:31 - 5:33are going to bargain
over one to six dollars. -
5:33 - 5:37If they can do it in 10 seconds,
they're going to actually earn that money. -
5:37 - 5:39If they don't make a deal,
they get nothing. -
5:39 - 5:41That's a mistake together.
-
5:41 - 5:43The twist is that one player, on the left,
-
5:43 - 5:46is informed about how much
on each trial there is. -
5:46 - 5:49They play lots of trials
with different amounts each time. -
5:49 - 5:51In this case, they know
there's four dollars. -
5:51 - 5:54The uninformed player doesn't know,
but they know the informed player knows. -
5:54 - 5:57So the uninformed player's
challenge is to say, -
5:57 - 6:00"Is this guy really being fair
or are they giving me a very low offer -
6:00 - 6:01in order to get me to think
-
6:01 - 6:04that there's only one
or two dollars available to split?" -
6:04 - 6:07In which case they might reject it
and not come to a deal. -
6:07 - 6:10So there's some tension
between trying to get the most money -
6:10 - 6:12but trying to goad the other player
into giving you more. -
6:12 - 6:15And the way they bargain
is to point on a number line -
6:15 - 6:17that goes from zero to six dollars,
-
6:17 - 6:20and they're bargaining
over how much the uninformed player gets, -
6:20 - 6:21and the informed player gets the rest.
-
6:22 - 6:24So this is like
a management-labor negotiation -
6:24 - 6:25in which the workers don't know
-
6:25 - 6:28how much profits
the privately held company has, -
6:28 - 6:31and they want to maybe
hold out for more money, -
6:31 - 6:33but the company might want
to create the impression -
6:33 - 6:36that there's little to split:
"I'm giving you the most that I can." -
6:36 - 6:38First some behavior.
-
6:38 - 6:40So a bunch of the subject pairs
play face to face. -
6:40 - 6:43We have other data
where they play across computers. -
6:43 - 6:44That's an interesting difference.
-
6:44 - 6:46But a bunch of the face-to-face pairs
-
6:46 - 6:48agree to divide the money evenly
every single time. -
6:49 - 6:52Boring. It's just
not interesting neurally. -
6:52 - 6:54It's good for them.
They make a lot of money. -
6:54 - 6:56But we're interested in,
-
6:56 - 6:59can we say something about when
disagreements occur versus don't occur? -
7:00 - 7:03So this is the other group of subjects
who often disagree. -
7:03 - 7:04So they have a chance of --
-
7:04 - 7:06they bicker and disagree
and end up with less money. -
7:06 - 7:09They might be eligible
to be on "Real Housewives," the TV show. -
7:10 - 7:12You see on the left,
-
7:12 - 7:15when the amount to divide
is one, two or three dollars, -
7:15 - 7:16they disagree about half the time,
-
7:16 - 7:19and when the amount is four, five, six,
they agree quite often. -
7:19 - 7:21This turns out to be
something that's predicted -
7:21 - 7:23by a very complicated type of game theory
-
7:23 - 7:26you should come to graduate school
at CalTech and learn about. -
7:26 - 7:29It's a little too complicated
to explain right now, -
7:29 - 7:32but the theory tells you
that this shape kind of should occur. -
7:32 - 7:34Your intuition might tell you that too.
-
7:34 - 7:36Now I'll show you
the results from the EEG recording. -
7:36 - 7:39Very complicated. The right brain
schematic is the uninformed person, -
7:40 - 7:41and the left is the informed.
-
7:41 - 7:44Remember that we scanned
both brains at the same time, -
7:44 - 7:46so we can ask about time-synced activity
-
7:46 - 7:49in similar or different
areas simultaneously, -
7:49 - 7:51just like if you wanted
to study a conversation -
7:51 - 7:54and you were scanning
two people talking to each other -
7:54 - 7:56and you'd expect common activity
in language regions -
7:56 - 7:59when they're actually
listening and communicating. -
7:59 - 8:02So the arrows connect regions
that are active at the same time, -
8:02 - 8:04and the direction of the arrows flows
-
8:04 - 8:06from the region
that's active first in time, -
8:06 - 8:10and the arrowhead goes
to the region that's active later. -
8:10 - 8:12So in this case, if you look carefully,
-
8:12 - 8:14most of the arrows
flow from right to left. -
8:14 - 8:19That is, it looks as if the uninformed
brain activity is happening first -
8:19 - 8:23and then it's followed
by activity in the informed brain. -
8:23 - 8:26And by the way, these were trials
where their deals were made. -
8:26 - 8:28This is from the first two seconds.
-
8:28 - 8:31We haven't finished analyzing this data,
we're still peeking in, -
8:31 - 8:35but the hope is that we can say
something in the first couple of seconds -
8:35 - 8:37about whether they'll make a deal or not,
-
8:37 - 8:39which could be useful
in avoiding litigation, -
8:39 - 8:41ugly divorces and things like that.
-
8:41 - 8:42Those are all cases
-
8:42 - 8:45in which a lot of value
is lost by delay and strikes. -
8:47 - 8:49Here's the case
where the disagreements occur. -
8:49 - 8:51You can see it looks different
than the one before. -
8:51 - 8:53There's a lot more arrows.
-
8:53 - 8:54That means that the brains are synced up
-
8:55 - 8:57more closely in terms
of simultaneous activity, -
8:57 - 8:59and the arrows flow clearly
from left to right. -
8:59 - 9:01That is, the informed brain
seems to be deciding, -
9:01 - 9:04"We're probably
not going to make a deal here." -
9:04 - 9:06And then later there's activity
in the uninformed brain. -
9:07 - 9:09Next I'm going to introduce you
to some relatives. -
9:09 - 9:11They're hairy, smelly, fast and strong.
-
9:11 - 9:14You might be thinking back
to your last Thanksgiving. -
9:14 - 9:15(Laughter)
-
9:15 - 9:17Maybe if you had a chimpanzee with you.
-
9:17 - 9:21Charles Darwin and I and you broke off
from the family tree, from chimpanzees, -
9:21 - 9:23about five million years ago.
-
9:23 - 9:25They're still our closest genetic kin.
-
9:25 - 9:26We share 98.8 percent of the genes.
-
9:27 - 9:29We share more genes with them
than zebras do with horses. -
9:29 - 9:31And we're also their closest cousin.
-
9:31 - 9:34They have more genetic relation
to us than to gorillas. -
9:34 - 9:37So how humans and chimpanzees
behave differently -
9:37 - 9:39might tell us a lot about brain evolution.
-
9:39 - 9:42So this is an amazing memory test
-
9:42 - 9:44from Nagoya, Japan,
Primate Research Institute, -
9:44 - 9:46where they've done a lot of this research.
-
9:47 - 9:48This goes back quite a ways.
-
9:48 - 9:50They're interested in working memory.
-
9:50 - 9:53The chimp is going to see
200 milliseconds' exposure -- -
9:53 - 9:55that's fast, that's eight movie frames --
-
9:55 - 9:57of numbers one, two, three, four, five.
-
9:57 - 9:59Then they disappear
and they're replaced by squares, -
9:59 - 10:01and they have to press the squares
-
10:01 - 10:04that correspond to the numbers
from low to high to get an apple reward. -
10:04 - 10:06Let's see how they can do it.
-
10:16 - 10:18This is a young chimp.
-
10:18 - 10:21The young ones are better
than the old ones, just like humans. -
10:21 - 10:22And they're highly experienced,
-
10:22 - 10:25so they've done this
thousands and thousands of time. -
10:25 - 10:28Obviously there's a big training effect,
as you can imagine. -
10:28 - 10:29(Laughter)
-
10:29 - 10:32You can see they're very blasé
and kind of effortless. -
10:32 - 10:35Not only can they do it very well,
they do it in a sort of lazy way. -
10:35 - 10:37Who thinks you could beat the chimps?
-
10:37 - 10:39(Laughter)
-
10:39 - 10:40Wrong.
-
10:40 - 10:41(Laughter)
-
10:41 - 10:43We can try. Maybe we'll try.
-
10:43 - 10:47OK, so the next part of this study
I'm going to go quickly through -
10:47 - 10:50is based on an idea of Tetsuro Matsuzawa.
-
10:50 - 10:51He had a bold idea --
-
10:51 - 10:53what he called the cognitive
trade-off hypothesis. -
10:54 - 10:57We know chimps are faster and stronger.
They're also very obsessed with status. -
10:57 - 11:00His thought was, maybe
they've preserved brain activities, -
11:00 - 11:02and they practice them in development,
-
11:02 - 11:05that are really important to them
to negotiate status and to win, -
11:05 - 11:08which is something like strategic thinking
during competition. -
11:08 - 11:12So we're going to check that out
by having the chimps actually play a game -
11:12 - 11:14by touching two touch screens.
-
11:14 - 11:17The chimps are interacting
with each other through the computers. -
11:18 - 11:21They're going to press left or right.
One chimp is called a matcher. -
11:21 - 11:22They win if they press left, left,
-
11:22 - 11:26like a seeker finding someone
in hide-and-seek, or right, right. -
11:26 - 11:27The mismatcher wants to mismatch.
-
11:27 - 11:30They want to press
the opposite screen of the chimp. -
11:30 - 11:32And the rewards are apple cube rewards.
-
11:32 - 11:35So here's how game theorists
look at these data. -
11:35 - 11:39This is a graph of the percentage of times
the matcher picked right on the x-axis, -
11:39 - 11:41and the percentage of times
they predicted right -
11:41 - 11:43by the mismatcher on the y-axis.
-
11:43 - 11:47So a point here is the behavior
by a pair of players, -
11:47 - 11:49one trying to match,
one trying to mismatch. -
11:49 - 11:52The NE square in the middle --
actually NE, CH and QRE -- -
11:52 - 11:56those are three different theories
of Nash equilibrium, and others -- -
11:56 - 11:57tells you what the theory predicts,
-
11:57 - 11:59which is that they should match 50-50,
-
11:59 - 12:02because if you play
left too much, for example, -
12:02 - 12:05I can exploit that if I'm the mismatcher
by then playing right. -
12:05 - 12:08And as you can see, the chimps --
each chimp is one triangle -- -
12:08 - 12:10are circled around,
hovering around that prediction. -
12:11 - 12:13Now we move the payoffs.
-
12:13 - 12:16We're going to make the left, left payoff
for the matcher higher. -
12:16 - 12:17Now they get three apple cubes.
-
12:18 - 12:21Game theoretically, that should
make the mismatcher's behavior shift, -
12:21 - 12:22because the mismatcher will think,
-
12:22 - 12:24this guy's going to go for the big reward,
-
12:25 - 12:27so I'm going to go to the right,
make sure he doesn't get it. -
12:27 - 12:29And their behavior moves up
-
12:29 - 12:32in the direction of this change
in the Nash equilibrium. -
12:32 - 12:34Finally, we changed
the payoffs one more time. -
12:34 - 12:36Now it's four apple cubes,
-
12:36 - 12:38and their behavior again
moves towards the Nash equilibrium. -
12:38 - 12:41It's sprinkled around,
but if you average the chimps out, -
12:41 - 12:43they're really close, within .01.
-
12:43 - 12:45They're actually closer
than any species we've observed. -
12:46 - 12:47What about humans?
-
12:47 - 12:49You think you're smarter
than a chimpanzee? -
12:49 - 12:52Here's two human groups in green and blue.
-
12:53 - 12:54They're closer to 50-50.
-
12:54 - 12:56They're not responding
to payoffs as closely, -
12:56 - 12:58and if you study their learning,
-
12:58 - 13:00they aren't as sensitive
to previous rewards. -
13:00 - 13:02The chimps are playing better
than the humans, -
13:02 - 13:04in the sense of adhering to game theory.
-
13:04 - 13:07These are two different groups
of humans from Japan and Africa. -
13:07 - 13:08They replicate quite nicely.
-
13:08 - 13:11None of them are close
to where the chimps are. -
13:11 - 13:13OK, so here are some things
we learned today. -
13:13 - 13:15People seem to do a limited
amount of strategic thinking -
13:15 - 13:17using theory of mind.
-
13:17 - 13:18We have some evidence from bargaining
-
13:19 - 13:21that early warning signs in the brain
might be used to predict -
13:21 - 13:24whether there will be
a bad disagreement that costs money, -
13:24 - 13:26and chimps are better
competitors than humans, -
13:26 - 13:28as judged by game theory.
-
13:28 - 13:29Thank you.
-
13:29 - 13:32(Applause)
- Title:
- When you're making a deal, what's going on in your brain?
- Speaker:
- Colin Camerer
- Description:
-
When two people are trying to make a deal -- whether they’re competing or cooperating -- what’s really going on inside their brains? Behavioral economist Colin Camerer shows research that reveals just how little we’re able to predict what others are thinking. And he presents an unexpected study that shows chimpanzees might just be better at it than we are. (Filmed at TEDxCalTech.)
- Video Language:
- English
- Team:
- closed TED
- Project:
- TEDTalks
- Duration:
- 13:49
Camille Martínez commented on English subtitles for When you're making a deal, what's going on in your brain? | ||
Camille Martínez edited English subtitles for When you're making a deal, what's going on in your brain? | ||
Camille Martínez edited English subtitles for When you're making a deal, what's going on in your brain? | ||
Camille Martínez edited English subtitles for When you're making a deal, what's going on in your brain? | ||
Joanna Pietrulewicz edited English subtitles for When you're making a deal, what's going on in your brain? | ||
Joanna Pietrulewicz edited English subtitles for When you're making a deal, what's going on in your brain? | ||
Joanna Pietrulewicz edited English subtitles for When you're making a deal, what's going on in your brain? | ||
Brian Greene edited English subtitles for When you're making a deal, what's going on in your brain? |
Camille Martínez
Hello,
The English transcript was updated on 5/3/20. In addition to other edits, please note the following change:
09:42 from Nagoya, Japan, Primate Research Institute ---> from [Kyoto], Japan, the Primate Research Institute
Thank you!