Reference and Preference: How does the Brain Scale Subjective Value?

Commentary on The neurobiology of reference-dependent value computation. Would you be willing to pay more for a new television the same day you bought a new house? Would you be more likely to purchase that television if it was marked on sale? Most individuals respond affi rmatively to questions of this form, likely because they use a " reference point " to help with evaluating their options. A common example is when ownership of an item affects its valuation. This is known as the " endowment effect " , demonstrated by individuals reporting a higher minimum willingness-to-accept (WTA) as a purchase price for an already-owned item than a maximum willingness-to-pay (WTP) to acquire the same item. The importance of understanding reference-point phenomena like the endowment effect has been refl ected in a sizeable number of related behavioral and theoretical papers. While some aspects of the endowment effect can be dissociated with behavioral data (Brenner et al., 2007), neu-roscience can aid in delineating others. To this end, there have already been functional magnetic resonance imaging (fMRI) explorations of the endowment effect and its neurobiological underpinnings (Knutson et al., 2008; Weber et al., 2007). These studies , though, do not obtain fMRI data for within-subject comparisons of buying and selling the same items; a true measure of the endowment effect would demonstrate how a change in reference affected valuation (here, WTA and WTP). Given the large number of value comparisons that go into decisions, it might be the case that the brain determines " relative " preferences using relative value scales instead of computing " absolute " preferences (Seymour and McClure, 2008). The presence of one or more reference points during construction of subjective values could lead to the WTA–WTP disparity. A recent study by De Martino et al. (2009) seeks to fi ll this important gap, using fMRI to identify the neural valuation processes underlying the endowment effect. This goal, though seemingly addressing a specifi c economic phenomenon, reaches a broad set of neuroscience questions. Although the neural mechanisms of subjective value computation – particularly those involving specifi c subregions of the striatum and the prefrontal cortex – have been extensively studied, there remain questions about how these regions represent and integrate individual preferences. Studies also implicate additional regions (e.g., insular cortex and amygdala) in the modulation and computation of subjective value, making it plausible that this set of brain regions …