Gamblers (and other risk takers) are likely to make larger bets and engage in riskier behavior when they are given a sense of agency or control over the peril. In a recent study entitled, “Agency modulates the lateral and medial prefrontal cortex responses in belief-based decision making”, scientists tested this theory through a specially devised card game, in which players were presented two face-down cards and had to make a bet on which card would have the larger value. In one condition, the players both selected the card and the bet. In the other, the computer randomly selected the card and the user chose the value of the bet. The entire game was rigged and the two conditions differed only in whether the player could select the card himself. Players were artificially given winning and losing streaks to test how this concept of agency affects user’s response, and their brains were examined using as fMRI machine.
Players would place a bet, choose the side of the winning card (the SG condition) or confirm the computer’s random decision (the CG condition), and then receive feedback. The experimenters systematically manipulated users’ winning and losing streaks in order to examine the influence prior outcomes and agency have on subsequent decisions. Under the CG condition, participants were specifically told that the computer made random guesses and were thus expected to have more agency under SG conditions. This set-up allowed the experimenters to successfully manipulate the degree of agency. The scientists’ model was excellent because they took into consideration the participants’ attribution style, that is, whether or not they are pessimistic. Subjects answered a questionnaire to evaluate their level of pessimism. Pessimism did indeed decrease a player’s wagers in both gaming conditions.
When on a winning streak, users in both conditions kept their bets rather constant but when faced with a losing streak, players for which the computer selected the card raised their bets as the streak continue. Players who selected their own cards, however, had a higher baseline bet. This is consistent with what is known about two common gambling behaviors: the hot hand fallacy and gambler’s fallacy. Players with agency are more likely to ascribe winning to having a hot hand and are likely to continue in that successful behavior. Players without agency are more likely to ascribe winning to fate and chance and are wary that the tide of prolonged winnings will soon recede.
Casino owners have the most obvious path to profit through this study. By increasing the agency of a player, gamblers will bet more. When losing streaks are concerned, however, players will tend to increase their bets. Additionally, the casinos should keep the player optimistic since pessimism due to a losing streak reduces a person’s propensity towards gambling in the long run.
Less obvious fields can also benefit from this study. If one considers that every activity and transaction is essentially a wager of attention or resources in exchange for gain or enjoyment, groups wanting to “sell” risk to consumers should also increase the agency afforded to them. A restaurant could offer customers more customization options, an insurance agency would want to offer many small supplements to a policy, and a car dealership may want to have several models of similar vehicle. Companies seeking to raise their stock price or attract venture money may even adopt a facade of accepting investor input in company affairs to entice investors to invest in them.
The two potential regions of interest in these situations are the lateral and medial prefrontal cortex of the brain. The medial prefrontal cortex (MPFC) plays a role in programming the recent response outcomes and the lateral prefrontal cortex (LPFC) is involved in decision-making— especially when self-control is a crucial part of that decision.
With respect to imaging, the scientists predicted that the LPFC and MPFC would demonstrate different patterns of activity under varying conditions of agency and previous outcomes. In the fMRI, the brain regions that exhibited the most difference between the conditions were the rostral anterior cingulated cortex and the left inferior frontal gyrus; regions that are known to participate in decision making, particularly decision-making involving self-control. Interestingly, this activity was found to be heightened for decisions following a loss than a win under the CG condition, and the opposite trend was shown for the SG condition. These new findings brings the scientific community one step closer to understanding the neural mechanisms behind the “illusion of control” in belief-based decisions.