We're going to use an unusual combination of tools from game theory and neuroscience to understand how people interact socially when value is on the line.
So Game theory is a branch of originally applied mathematics used mostly in economics, political science, a little bit biology that gives us a mathematical taxonomy of social life.
And it predicts what people are likely to do and believe others will do in cases where everyone's actions affect everyone else.
That's a lot of things.
Competition, cooperation, bargaining, games like hide and seek and poker.
Here's a simple game to get us started.
Everyone chooses a number from 0 to 100.
We're going to compute the average of those numbers, and whoever's close to 2/3 of the average wins a fixed price.
So you want to be a little bit below the average number, but not too far below, and everyone else wants to be a little bit below the average number as well.
I think about you.
Want what you might pick as you're thinking.
This is a toy model of something like selling in the stock market during a rising market right you don't so too early because you miss out on profits.
But you want to sell way too late when everyone else sells Trigger your crash.
You wanna be a little bit ahead of the competition, but not too far ahead.
Okay, here's two theories about how people might think about this.
Then we'll see some data.
Some of these will sound familiar because you probably are thinking that way.
I'm using my brain theory to see a lot of people say, I really don't know what people gonna pick.
So I think the average will be 50.
They're not being really strategic at all, and I'll pick 2/3 of 50.
That's a start.
Other people are a little more sophisticated using more working memory.
Say, I think people will pick 33 because they're going to pick a response to 50.
And so I'll pick 22 which is 2/3 of 33.
One extra step of thinking two steps.
And of course, in principle you could do 34 or more, but it starts to get very difficult, just like in language and other domains.
We know that it's hard for people to parse very complex sentences with a kind of recursive structure.
This is called the cognitive hierarchy theory.
By the way, if something I've worked on a few other people, that indicates that kind of hierarchy and along with some assumptions about how many people stop in different steps and how the steps of think you're affected by lots of interesting variables and variant people, as we'll see in a minute a very different theory, a much more popular one and are older one, due largely to John Nash of A Beautiful Mind.
Fame eyes what's called equilibrium analysis.
So if you've ever taken a Game three course at any level, you'll have learned a little bit about this.
And equilibrium is a mathematical state in which everybody has figured out exactly what ever else will do.
It is a very useful concept, but behavior Lee.
It may not exactly explain what people do the first time they play these types of economic games or in situations in the outside world.
In this case, the ACLU brain makes a very bold prediction, which is everyone wants to be below everyone else.
Therefore, they'll play zero.
Let's see what happens.
This is This experiment's been done many, many times.
Some of the earliest ones were done in the nineties by me and Rosemarie Nagel and others.
This is a beautiful data set of 9000 people who wrote in to three newspapers and magazines that had a contest the contest had send in your numbers, and whoever is close to 2/3 of the average will win a big price.
And as you can see, there's so much data here you can see the spikes very visibly.
There's a spike it 33 those air people doing one step there is another spike visible a 22.
I noticed, by the way, that most people pick numbers right around that they don't actually pick exactly 33 22.
There's something a little bit noisy around it, but you can see those spikes on their head.
There's another group of people who seem to have a firm grip on equilibrium analysis because they're picking zero or one.
But they lose right because picking a number that low is actually a bad choice.
If other people aren't doing that global analysis as well, so they're smart but poor check.
Where are these things happening in the brain?
One study, by course, Saline able gives a really sharp, interesting answer.
So they had people play this game while they were being scanned in F.
M R I.
And to conditions in some trials, they're told you're playing another person who's playing right now, and we're gonna match up your behavior at the end and pay you if you win.
And the other trials, they're told you're playing computer, just choosing randomly.
So what you see here is a subtraction of areas which there's more brain activity when you're playing people compared to playing the computer, you see activity in some regions we've seen today.
Medial prefrontal cortex, Dorsa, medial, however, up here ventral medial prefrontal cortex and entered a single it an area that's involved in lots of types of conflict resolution like if you're playing, Simon says.
And also there, right and left Temporal parietal Junction and these rural areas, which are fairly reliably known to be part of a what's called a theory of mind circuit or mental izing circle, that is, it's a circuit that's used to imagine what other people might do.
So it's some of the first studies to see this tied in to game theory.
What happens with these one and two step types?
So we classify people by what they pit.
And then we look at the difference between playing humans vs plan computers.
Which brain areas are differentially active on the top.
You see the one step players.
There's almost no difference.
The reasons they're treating other people like a computer and the brain is to the bottom players.
You see all the activity endorsing media PFC.
So we know that those two step players are doing something differently now.
If you were to step back and say, What do we do with this information?
You might be able to look at brain activity and say, This person's gonna be a good poker player or this person's socially naive And we might also be able to study things like development of adolescent brains once we have a new idea of where this circuitry exists.
Okay, get ready.
This I'm gonna say I'm saving you some brain activity because you don't need to use your hair detector cells.
You should use those cells to think carefully about this game.
This is a bargaining game.
Two players who are being scanned using EEG electrodes are gonna bargain over 1 to $6.
If they can do it in 10 seconds, they're actually earn that money.
If 10 seconds goes by and they haven't made a deal, they get nothing.
That's kind of a mistake together.
The twist is that one player on the left is informed about how much on each trial there is.
They play lots of trials with different amounts of time.
In this case, they know there's $4.
The uninformed player doesn't know, but they know that the in form player knows.
So the uninformed player's challenge is to say, Is this guy really being fair?
Or they giving a very low offer in order to get me to think that there's only one or $2 available to split, in which case they might reject it and not come to a deal?
So there's some tension here between trying to get the most money but trying to go the other player and to give you more and the way they bargain is two point on a number line that goes from 0 to $6 they're bargaining over how much the uninformed player gets and the in form player is going to get the rest.
So this is like a management labor negotiation in which the workers don't know how much profits the privately held company has, right, and they want to maybe hold out for more money.
But the company might want to create the impression that there's very little to split.
I'm giving you the most that I can first, some behavior.
So a bunch of the subject pairs they play face to face.
We have some other data where they play across computers.
That's an interesting difference, says You might imagine, but a bunch of the face to face pairs agree to divide the money evenly every single time.
It's just not interesting early.
It's good for that.
They make a lot of money, but we're interested in Can we say something about when disagreements occur versus don't occur?
So this is the other group of subjects who often disagree, so they have a chance of bicker and disagree and end up with less money.
They might be eligible to be on real housewives.
The TV show.
Okay, you see, on the left when the amount to divide is 12 or $3.
They disagree about half the time, and when the amount is 456 they agree.
Quite often, this turns out to be something that's predicted by a very complicated type of game theory.
You should come to graduate school at Caltech and learn about it's a little too complicated.
Explain right now, but the theory tells you that this shape kind of should occur.
Your intuition might tell you that, too.
Now I'm gonna show you the results from the A G recording.
The right brain schematic is the uninformed person on the left is the informed.
Remember that we scanned both brains at the same time so we can ask about time sync activity in similar or different areas simultaneously.
Just like if you wanted to study a conversation and you were scanning two people talking to each other, you'd expect common activity of language regions when they're actually kind of listening and communicating.
So the arrows connect regions that are active at the same time, and the direction of the arrows flows from the region that's active first in time, and the arrowhead goes to the region that's active later.
So in this case, if you look carefully, most of the arrows flow from right to left.
That is, it looks as if the uninformed brain activity is happening kind of first, and then it's that it's followed by activity in the informed brain.
And, by the way, these air these air trials where their deals were made.
This is from the 1st 2 seconds.
We haven't finished analyzing this data, so we're still peeking in.
But the hope is that we should say something in the first couple of seconds about whether they'll make a deal or not, which could be very useful in thinking about avoiding litigation and ugly divorces and things like that.
Those are all cases in which a lot of value is lost by delay and strikes.
Here's the case where the disagreements occur.
You can see it looks different than the one before.
There's a lot more arrows.
That means that the brains air kind of sync up more closely in terms of simultaneous activity, and the arrows flow clearly from left to right.
That is, the in form brain seems to be kind of deciding.
We're probably not gonna be gonna make a deal here.
And then later there's activity in the uninformed brain next to introduce you to some relatives there.
Hairy, smelly, fast and strong.
You might be thinking back to your last Thanksgiving.
Maybe if you had a chimpanzee with you.
Charles, Darwin and I and you broke off in the family tree from chimpanzees about five million years ago.
They're still our closest genetic kin.
We share 98.8% of the genes we share.
More genes within the zebras do with horses, and there were also their closest cousin.
They have more genetic relation.
Dust into guerrillas.
So how humans and chimpanzees behave differently might tell us a lot about brain evolution.
So this is an amazing memory test from Nagoya, Japan Primate Research Institute.
They've done A lot of this research.
This goes back quite a ways.
They're interested in working memory, the champions going to see, watch carefully and we're going to see 200 milliseconds exposure.
That's eight movie frames of numbers.
12345 Then they disappear and they're replaced by squares, so they have to press the squares that correspond to the numbers from low to high to get an apple reward.
Let's see how we can do it.
This is a young chimps.
The young ones are better in the old ones, just like humans.
And they're highly experienced.
They done this 1,000,000 times.
So there's a big training effect.
As you can imagine, you can see they're very blase and kind of effortless.
Not only can they do it very well, they do it.
It's a lazy way, all right, Who thinks Who thinks you could beat the chimps?
Maybe we'll try.
Okay, so the next part of the study about a quick go quickly through is based on an idea of its whereabouts is Allah.
He had a bold idea that what he called the cognitive trade off hypothesis.
We know chimps are faster, stronger.
They're also very obsessed with status.
His thought was maybe they've preserved brain activities and they practice them in development that are really, really important to them to negotiate status and to win, which is something like strategic thinking during competition.
So we're gonna check that out by having the chimps actually play a game by touching up a touch to touch grains.
The chimps are actually interacting with each other through the computers.
They're going to press left or right.
One chip is called a match.
Er, they win.
If they press left left like a high seeker finding someone in hide and seek or right?
The mismatched wants to mismatch.
They want to press the opposite screen of the chimp, and the rewards are Apple Cube rewards.
So here's how game theorists look at these data.
This is a graph of the percentage of times the mattress picked right on the X axis and the percentage of times they pick right by the mismatch on the Y axis.
Okay, so a point here is the behavior by a pair of players one trying to match one, trying to mismatch the n E Square in the middle.
Actually, any ch curie there's are three different theories.
Nash, Equilibrium and others tells you.
What the theory predicts is that they should match 50 50 is if you match.
If you play left too much, for example, I can exploit that if on the mismatch or by then playing right.
And as you can see, the chimps each chimp is one triangle are kind of circled around, hovering around that prediction.
Now we move the payoffs, we're actually gonna make the left left payoff for the match or a little bit higher.
Now they have three apple cubes game.
Theoretically, that should actually make the mismatches behavior shift.
Because what happens is the mismatch will think, Oh, this guy's gonna go for the big reward.
And so I'm gonna go to the right, make sure he doesn't get it, okay?
And as you can see, their behavior moves up in the direction of this change in the Nash equilibrium.
Finally, we changed the past one more time.
Now it's four apple cubes and their behavior again moves toward the Nash equilibrium.
It's sprinkled around.
But if you average the chimps out, they're really, really close within point a one.
They're actually closer than any species we've observed.
What about what about humans?
You think you're smarter than the chimpanzee?
Here's two human groups in green and blue.
They're closer to 50 50.
They're not responding to payoffs is closely.
And also, if you study their learning in the game, they aren't as sensitive to previous rewards.
The chimps are playing better than the humans better in the sense of adhering to game theory.
And these are two different ways of humans from Japan and Africa.
They replicate quite nicely.
None of them are close to where the chimps are.
Okay, so here's some things we learned today.
People similar to a limited amount of strategic thinking using theory of mind.
It was some preliminary evidence from bargaining that early warning signs in the brain might be used to predict whether there'll be a bad disagreement that costs money.
And chimps are better competitors than humans, as judged by game theory, Thank you.