Coricelli and Nagel (2008)

1. Coricelli and Nagel (2008) • Introduction • Methods • Results • Conclusion

2. John Maynard Keynes • “… Professional investment may be likened to those newspaper competitions [beauty contest] in which the competitors have to pick out the six prettiest faces from a hundred photographs, the prize being awarded to the competitor whose choice most nearly corresponds to the average preferences of the competitors as a whole ... It is not a case of choosing those which ... are really the prettiest, nor even those which average opinion genuinely thinks the prettiest. We have reached the third degree ... To anticipating what average opinion expects the average opinion to be. And there are some, I believe, who practice the fourth, fifth and higher degrees.”

3. Behavioral model and Subjects classifications M=2/3

4. Cognitive hierarchy theory • Assumption: iterated reasoning is limited in the human and heterogeneous across players.

5. Low levels of reasoning • self referential thinking (choosing what you like without considering other’s behavior). • High levels of reasoning • taking into account the thinking of others about others.

6. Theory of mind/mentalizing • The ability to think about others’ thoughts and mental states in order to predict their intentions and actions. • Iterated steps of thinking • What you think the others think about what you think.

7. Why do people use different and limited numbers of steps of reasoning? • Cognitive limitations • Individual characteristics: Overconfidence • What does higher level of reasoning need? • Computation demand • Strategic behavior with belief that other players are also more strategic

8. Methods • Subjects: 20 • Experimental design and task • Human condition: each participant of a group of 10 was asked to choose an integer between 0 and 100. • Computer condition: one participant chose one number and a computer algorithm chose randomly.

9. Experimental design and task 39 trials M=1/8, 1/5, 1/3, 1/2, 2/3, 3/4, 1, 9/8, 6/5, 4/3, 3/2, 5/3, 7/4 60 trials

10. Results • Behavioral results • fMRI data

11. Behavioral types • Categories: random, level 1, and level 2 or higher reasoning • Criterion: smallest quadratic distance • We categorized a player as level 1(or 2) if at least 7 out of 13 cases were identified as level 1(or 2) behavior.

12. Two representative subjects

13. Behavioral results • The high-level reasoning subjects clearly differentiated their behavior in the human condition compared to the computer condition. • The subjects classified as low level behaved similarly against the computer or the humans.

14. fMRI data Mentalizing network activaed

15. High versus low level of reasoning

16. Medial prefrontal cortex dissociates between high and low level of strategic reasoning • High level reasoning • Dorsal mPFC: third person perspective taking (put yourself in the shoes of the other) • Ventral mPFC: thinking about others as like minded and similar to self. • Low level reasoning • ACC: an area attributed to self referential thinking in social cognitive tasks.

17. High level reasoning • Right and left lateral orbitofrontal cortex and left and right dorsalateral prefrontal cortex: areas likely related to performance monitoring and cognitive control.

18. Human-human interaction • Temporo-parietal junction (TPJ): theory of minds tasks. • Superior temporal sulcus (STS): intentions and causality.

19. Mental calculation • Angular gyrus and inferior parietal lobule both in C1 and C2 condition: number processing and calculation. • No activity of the medial prefrontal cortex was related to any kind of calculation.

20. Strategic IQ • Definition:the subject’s ability to guess a number that could potentially win against a large population of human opponents, thus against any possible combination of types of level of reasoning. • Score: Quadratic distance of the actual choice to the winning number.

21. Strategic IQ • Strategic IQ was not correlated with accuracy in the calculation task so it is independent of cognitive or calculation skills.

22. Conclusion and Disussion • Main finding: mPFCdistinguishes high- versus low-level of strategic reasoning, thus encoding the complexity underlying human interactive situations. • TPJ and STS have a more general function in the recognition of social cues or in the ascription of generic features of human-human interaction.

23. Conclusion and Dicussion • A dissociation in the dorsal and ventral anterior mPFC for similar- versus dissimilar to self-mentalizing activity. • The focus of activity in the mPFC coincides with the focus of activity related to degree of thinking about how own behavior can influence other’s behavior (Hampton et al. 2008).

24. Conclusion and Dicussion • The main difference between these two studies are that in Hampton et al. (2008) subjects observed others’ behavior over time and need to respond to it, while in our study the subjects need to model also the choices of the others. The brain does not seem to distinguish between these two data sources. • Taken together, the results of these two studies represent the first close link between learning and levels of reasoning.

25. Conclusion and Dicussion • A dissociation between Strategic (social) IQ and computational skills (general IQ). • No correlation between Strategic IQ and accuracy in calculation tasks. • No activity of the mPFC was related to the mental calculation.

26. One of the brain structures involved in creating these metarepresentations would be the inferior parietal lobe, which is one of the youngest regions in the brain, in terms of evolution. In humans, this lobe is divided into the angular gyrus and the supramarginal gyrus, and both of these structures are fairly large. Just beside them is Wernicke’s area, which is unique to human beings and is associated with understanding of language.

27. Question • In their calculation task, cognitive heterogeneity may not be manifested. • It may be too easy to differentiated cognitive ability. • We are still interested about the significance of cognitive ability.