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When is a loss a loss? Excitatory and inhibitory processes in loss-related decision-making

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Ben Seymour1,2,3,4, Masaki Maruyama2,3 and Benedetto De Martino4 One of the puzzles in neuroeconomics is the inconsistent pattern of brain response seen in the striatum during evaluation of losses. In some studies striatal responses appear to represent loss as a negative reward (BOLD deactivation), while in others as positive punishment (BOLD activation). We argue that these discrepancies can be explained by the existence of two fundamentally different types of loss: excitatory losses signaling the presence of substantive punishment, and inhibitory losses signaling cessation or omission of reward. We then map different theories of motivational opponency to loss related decision-making, and highlighting five distinct underlying computational processes. We suggest that this excitatory–inhibitory model of loss provides a neurobiological framework for understanding reference dependence in behavioral economics.

Addresses 1 Computational and Biological Learning Laboratory, Department of Q2 Engineering, University of Cambridge CB2 1PZ, United Kingdom 2 Center for Information and Neural Networks, National Institute for Information and Communications Technology, 1-4 Yamadaoka, Suita City, Osaka 565-0871, Japan 3 Immunology Frontier Research Center, Osaka University, 3-1 Yamadaoka, Suita, Osaka 565-0871, Japan 4 Department of Psychology, University of Cambridge, Downing Street, Cambridge CB2 3EB, United Kingdom Corresponding author: Seymour, Ben ([email protected])

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Introduction Over the past decade a set of divergent observations have emerged in human neuroimaging studies of monetary loss. In studies of the receipt (or prospect) of financial loss, neuroimaging responses sometimes exhibit deactivation in BOLD signal of striatal brain areas associated with motivation and decision-making (caudate, putamen, and nucleus accumbens) [1,2,3,4], or little change at all www.sciencedirect.com

[5]. This has often been seen as consistent with a primary role of these regions in reward-related processing, and these negative responses are usually seen in the same regions showing activation to monetary gains. With emerging evidence that striatal BOLD responses to reward were well described by prediction error activity in the context of passive prediction tasks (Pavlovian learning), it was generally assumed that this activity represented a single reward-specific and putatively dopamine-related signal [6,7]. However, this theory suffered when other studies involving loss, and especially involving primary punishments such as pain, revealed positive activation in the striatum, in very similar regions to those that showed deactivations to financial loss [8,9]. Furthermore, the pattern of activity resembled a prediction error, just like a reward prediction with the opposite sign. This suggested that either the striatum was encoding a more complex signal than originally thought — perhaps some sort of selective salience signal [10], or that there was a second system for encoding aversive outcomes that comes online with physical, but less so financial, punishment. Why financial loss might less reliably activate this system was unclear, but one could posit it might be related to the fact that physical punishments are primary outcomes ‘consumed’ immediately, whereas money is a secondary outcome whose real outcome is fulfilled at a later date. A more reliable way to ‘activate’ the striatum to loss was introduced with a clever design from Delgado and colleagues: they had subjects begin the experiment with a task in which subjects could earn a decent sized money pot. Then in a second, seemingly unrelated experiment, they underwent a loss-conditioning study, which revealed positive activation to monetary loss [11]. This result, together with a more recent one [12], suggest that losing money that had been earned on a previous task in some way rendered it sufficient to reliably activate positive aversive coding. This raises the question as to what makes a loss look sometimes primarily like a negative reward, and at other times like a positive punishment. This is important, because if there are substantially different ways of representing losses in the brain, then the associated loss behavior may have very different characteristics. To make matters more complex, subsequent studies involving the capacity to make active choices over monetary loss or pain, that is, reducing or avoiding punishment, did Current Opinion in Behavioral Sciences 2015, 5:x–x

Please cite this article in press as: Seymour B, et al.: When is a loss a loss? Excitatory and inhibitory processes in loss-related decision-making, Curr Opin Behav Sci (2015), http://dx.doi.org/10.1016/ j.cobeha.2015.09.003

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Excitatory and inhibitory loss Animal learning theory provides a structured approach to understanding the relationship between gains and losses, and there is good evidence of the existence of two separate motivational pathways for outcome prediction: one governing rewards, and the other governing punishments [17]. In particular, accounts of interaction between the two systems yield two distinct types of punishment: excitatory, and inhibitory, depending on the context that defines the nature of punishment. Accordingly, inhibitory values emerge from two different instances for appetitiveaversive opponency: omission (Konorskian [18]) opponency, and offset (Solomon–Corbit [19]) opponency (Figure 1). Omission opponency describes the frustrative loss that occurs when an expected reward does not occur. Here, excitatory losses are due to the positive presence of a punishment, and inhibitory losses due to absence of an expected gain. A slightly different type of frustrative loss occurs when a tonically presented reward terminates. In this case, Solomon and Corbitt proposed the accrual of a slow adaptive process from which acute changes were compared. Both processes illustrate the clear distinction between excitatory and inhibitory losses, with the inhibitory type being generated either comparison of neutral outcome with an expectation of or tonic baseline level of reward. This is exactly mirrored in the opposite valence: inhibitory reward being evoked with the relief at the termination or omission of punishment [20]. The existence of different types of loss offers an explanation into the pattern of brain responses seen above. In most experiments, for ethical and practical reasons, loss is operationalized by a reduction in the participant monetary compensation (future expected reward). This procedure would augment the inhibitory loss representation and therefore tend toward a deactivation in striatal areas. However, for primary punishments and financial outcomes that were already considered ‘owned’, we would expect a dominant excitatory loss representation, and activation of an aversive system observable in the striatum. In many situations, it may be that excitatory and Current Opinion in Behavioral Sciences 2015, 5:x–x

Figure 1

Excitatory and Inhibitory Losses excitatory

Lose $ (excitatory loss) Win $ (excitatory reward)

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not fit either pattern simply. Here, for both money and pain, striatal activity shows positive activation for avoidance actions and avoided outcomes [13,14]. Rather than representing the magnitude of the expected punishment (in probabilistic avoidance), it seemed to represent the relative positive value of avoidance [15]. That is, activity again looks like a reward signal — this time for actions, with no consistent evidence of an aversive striatal system in operation, even for painful outcomes. A positive aversive signal is sometimes seen elsewhere, such as the anterior insula cortex [16], but its contribution to decision making was less clear.

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Excitatory and inhibitory processes underlying reward and punishment. Excitatory values occur with the receipt, or prediction of receipt, of a primary reward or punishment. Inhibitory values occur with either the omission of an expected outcome (e.g. requiring, of course, an expectation to be generated by some process, such as Pavlovian Conditioning), or with the termination of a tonic or repetitively received outcome.

inhibitory processes co-occur [21], and hence partially or fully cancel out the subsequent fMRI BOLD response.

From loss prediction to decision-making How then, is loss-related computation related to decisionmaking? Clearly, what motivates choice in the context of any type of loss is a desire to reduce it, and this can be used to define loss or punishment. The Konorskian and Solomon–Corbitt framework deals with passive (Pavlovian) predictions, but are conventionally thought to govern two distinct types of aversive decision: avoidance, and escape [22,23]. The control of escape and avoidance may be different, because the nature by which information about outcomes is garnered is different, but in both cases it is the absence of punishment that motivates behavior. The paradox created by the ability of ‘nothing’ to act as an incentive and reinforce actions has stimulated considerable research and debate [24]. Two putative solutions to the avoidance problem are provided by inhibitory rewards: in the one case (two-factor theory), behavior is driven by the escape from fear (i.e. offset relief) elicited by any signal that predicts punishment [25]. In a second case (safety signal hypothesis), behavior is driven by the www.sciencedirect.com

Please cite this article in press as: Seymour B, et al.: When is a loss a loss? Excitatory and inhibitory processes in loss-related decision-making, Curr Opin Behav Sci (2015), http://dx.doi.org/10.1016/ j.cobeha.2015.09.003

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(conditioned) reinforcement provided by the inhibitory outcome state that signals the absence of punishment (omission relief) [26,27,28]. There is good evidence for both these processes [29], but they lead to a problem: can they sustain behavior after repeated avoidance success, because the inhibitory learning process should extinguish? One possibility is that a simple habit-based system might take over, which stamps in the repetitive behavior as if it were a reward [30]. However, these theories struggle to account for avoidance in the absence of any signals (‘free-operant’ avoidance), such as when a minimum baseline rate of action execution is required to ensure no punishments are presented [31] (e.g. pressing a lever every 20 s to ensure no electric shock is delivered). This has led to theories of cognitive avoidance that appeal to the remembered representation of avoided outcomes in the brain [32]. Similar to ‘modelbased’ control for reward-based decision-making [33], this type of behavior relies on some sort of internal model of the environmental structure and contingencies. Together, this illustrates the fundamental difference between reward-based and avoidance-based reinforcement, with avoidance being driven by a relief processes generated through inhibitory interactions, and not through a primary excitatory process. However, this should only be manifest in avoidance tasks in which stimulus driven learning is possible. In explicit tasks (verbal or written), in which learning is not required or possible, we would expect simply a model-based system evaluating the best actions. In addition, during either type of task, we would expect a reward-like habit system to take control as soon as a clear pattern of avoidance becomes successful. Importantly, therefore, in the case of learned or explicit loss avoidance, one would predict an overall similar reward-dominant pattern of brain activity for both reward acquisition and loss avoidance — as is typically seen. However, the difference between the reward seeking and avoidance should be observable early in learning, when we would expect relief driven reinforcement to be represented as a negative punishment — a striatal deactivation preceded by aversive activation induced by the pre-action state, as occurs for negative Pavlovian prediction errors for excitatory losses. However, to our knowledge previous studies have not explicitly looked specifically at the earliest versus later stages of learning. One reason may be the methodological problems of doing extended training in fMRI studies, with confounding effects of time and attention. In the case of inhibitory losses, a plausible prediction is that an aversively motivated avoidance system is not required at all: since avoidance would require inhibition of inhibition (e.g. an inhibitory safety signal reflecting the www.sciencedirect.com

absence of loss that itself signaled the absence of reward). Therefore, inhibitory loss avoidance problems could be solved with just a reward system, by contrast to the complex Pavlovian-instrumental interactions required for excitatory loss avoidance. A further difference comes from the responses directly associated with the (excitatory or inhibitory) loss prediction itself. In particular, excitatory losses would be expected to evoke much stronger innate responses (‘species-specific defence responses’ (SSDRs)) which directly interfere with behavior [34]. In animal studies of primary punishments, this direct Pavlovian response can exert powerful control of behavior — sometimes called ‘Pavlovian warping’ [35,36]. Again, however, we would only expect this excitatory Pavlovian response (a positive striatal signal) early in avoidance behavior, because it would extinguish as successful avoidance becomes the norm [37]. In summary, based on good evidence primarily from animal studies, it seems probably that loss-related decision-making is under the control of at least five separate mechanistic processes (Figure 2). As a result, the pattern of behavior and accompanying neural activity depends critically on a number of factors, in particular the level of controllability over loss [38], the amount of experience, Figure 2

Architecture of excitatory loss avoidance Intemal model

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The architecture of loss avoidance. A set of coordinated processes mediate the acquisition and maintenance of avoidance learning, and similarly, any decision over options involving choosing the lesser of two punishments. The processes include first, an innate Pavlovian response to anticipated loss (including species specific defence reactions (‘SSDR’s), second, escape from fear associated with the loss predictive pre-action state, third, conditioned reinforcement of a safety signal, generated through conditioned reinforcement of the relief state, fourth, goal-directed (model-based) internal model and cognitive decision system, and fifth, habitization of the avoided action, after prolonged experience. Current Opinion in Behavioral Sciences 2015, 5:x–x

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the presence of cues signally the requirement to avoid, the schedule of loss delivery, the tonic level of reward or loss, conditioned and explicitly expected outcomes, the presence of signals indicating the success of behavior, and the nature of the loss itself (inhibitory or excitatory). However, quite which systems are active in any task might not readily apparent from basic analysis of neuroimaging data.

Relation to economic theories of loss behavior In the standard formulation of Expected Utility Theory [39] the agents maximize their utility over a concave utility-of-wealth. In this framework losses are just lower levels of (positive) wealth. As the local curvature (concavity) of the utility function increases, agents behave in a more risk-averse manner. Importantly Prospect Theory [40] introduced a different functional form of utility in which losses are conceptually different from gains, since they are evaluated relative to a reference point. Notably ventral striatum computations have been shown to be sensitive to the manipulation in the reference-point through market transactions [41]. Around the reference point, the Prospect Theory utility function is S-shaped and asymmetrical. The S-shape reflects concavity for potential gains (risk adverse behavior for prospective gains) and convexity for potential losses (risk seeking behavior for prospective losses). The asymmetry relative to the reference point reflects the fact that the function is steeper in the loss domain. The magnitude of this asymmetry is characterized by a parameter called lambda (l) that neatly account for loss averse behavior (the widespread evidence people strongly prefer avoiding losses to acquiring gains). Therefore in Prospect Theory how the reference-point is set is crucial to distinguish a gain from a loss. However, how the reference-point should be derived is unclear. Tversky and Kahneman originally proposed that the reference point is set by the status quo, a subject’s wealth level at the time of each decision. Other alternative proposed are the mean of the chosen lottery [42] or a lagged status quo [43], which predicts the willingness to take unfavorable risks to regain the previous status quo. A more recent proposal from Koszegi and Rabin [44,45] suggest that subject’s expectations (and not the status quo) shapes the reference point and determines what an agent would perceived as loss. In this model the decisionmaker maximizes a linear combination of a consumption utility m(w) that is the riskless intrinsic consumption utility associated with a given level of wealth w and m(r) the utility associated with a given reference level of wealth: uðwjrÞ ¼ mðwÞ þ mðmðwÞ  mðrÞÞ The reference dependent component of this account of utility ðmðmðwÞ  mðrÞÞÞ strongly resonates with the concept of inhibitory loss described we highlighted here. For Current Opinion in Behavioral Sciences 2015, 5:x–x

example, a CEO that expect a profit for her company of 1.3 millions dollars (for the current year) will perceive a profit of one million as a loss even if the company profit for previous years were below one million. Similarly if the same CEO expects that the company will produce a net loss of one million at the end of the year, will perceive a loss of half-million as a gain. Critically in this framework the final utility is not only function of the reference dependent component but it is also function of consumption utility (m(w)) that is the intrinsic utility for a given level of wealth w. This other component of utility could be mapped on what we have described here as an excitatory loss and would elicit an active averse representation since it will impact directly on the wealth of the agent. Therefore an intriguing possibility is that discrepancies observed in previous studies arise from a manipulation have impacted more or less on one of these two components that give rise to the final utility; that (as we propose here) have a segregated computational representation in the brain. One can imagine, for example, that the method used in most experiments to generate losses by reducing the participant monetary compensation by small amounts might impact significantly on the reference dependent component of utility (the participant expectation prior the beginning of the experiment) but might have a negligible impact on the overall level of the participant’s wealth dependent utility Further studies should directly and orthogonally manipulate these two components of utility to test empirically this hypothesis. Finally, an interesting view has recently emerged in behavioral economics suggesting that reference-dependent behavior arises from modulation of attentional resources. In this framework, loss averse behavior arises naturally if one assumes that a loss (a reduction in consumption) has a stronger impact on an attention-biased utility than a corresponding gain [46] without assuming an asymmetry in the value function. Consistent with this hypothesis it has been recently shown that losses have a distinct effect on attention but do not lead to an asymmetry in subjective value [47]. However, the exact role played by attention in shaping response to losses is still unclear and further empirical investigation is required. However, according to the framework proposed here it is tempting to suggest that excitatory losses should be more salient than inhibitory losses and therefore differentially engage the decision-maker attentional resources.

Conclusions and predictions Loss related behavior is both neurobiologically complex and fundamentally different from reward-related behavior — a fact that is sometimes overlooked. Importantly the experimental conditions under which loss behavior is studied critically determines the recruitment of different brain systems. Here, we propose that the relative contribution of two types of loss: excitatory and inhibitory losses, and that their relative representation www.sciencedirect.com

Please cite this article in press as: Seymour B, et al.: When is a loss a loss? Excitatory and inhibitory processes in loss-related decision-making, Curr Opin Behav Sci (2015), http://dx.doi.org/10.1016/ j.cobeha.2015.09.003

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determines the nature of the brain response in the striatum in passive receipt of loss, and together with the recruitment of inhibitory rewards, determines to some extent the nature of loss related decision-making (avoidance). It is important to note that other structures aside from the striatum are also strongly implicated in the representation and control over losses, in particular the amygdala and insula cortex. The amygdala also represents distinct integrated reward and loss signals [48,49], but is typically a little harder to charactise in imaging studies because of its smaller size and susceptibility to artifact. The insula cortex appears to have a more complex role in both value-sensitive functions and ‘interoceptive’ sensory processing [50], making interpretation even more difficult. Our model makes several testable predictions. First, in the case of passive loss prediction of simultaneous reward money and loss, the striatum is known to code a net reward signal. But for simultaneous pain and reward, evoking both positive reward and positive aversive systems, we would expect an amplified signal, even though the net value would be close to zero. Second, in purely aversive contexts in which subjects genuinely felt they could only lose their own money during an experiment, gains of money should be represented by negative responses of a dominant aversive system in striatum. Third, during excitatory but not inhibitory signaled loss avoidance (but not free operant avoidance), we would expect a positive striatal loss signal during very early learning, that extinguishes along with cue-driven Pavlovian responses, and switches to becomes a positive signal as successful avoidance is learned.

Conflict of interest statement All authors declare that we have no conflicts of interest.

Acknowledgements Q3 National Institute for Information and Communications Technology of Japan, Japanese Society for the Promotion of Science, The Wellcome Trust (UK).

References and recommended reading Papers of particular interest, published within the period of review, have been highlighted as:  of special interest  of outstanding interest

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