Sunk cost effects hinge on the neural recalibration of reference points in mental accounting.

The context of reinforcement history drastically influences human value-based choices. Mental accounting theory concerns how prior outcomes are perceived, combined and assigned into specific "mental" accounts to influence subsequent decisions but remains agnostic about the underlying computational and neural mechanisms. In a two-stage sequential decision-making task, we found previously incurred costs and bonuses biased subjects' choices in the opposite directions with similar magnitudes. Such effects were consistent with a computational model where the reference point was recalibrated by prior gains and losses encoded in the ventral striatum activities. Moreover, individual's susceptibility to prior outcomes was captured by the response of the dorsolateral prefrontal cortex and its functional connectivity with the medial orbitofrontal cortex, whose activity tracked the value of the chosen option. Our findings provide both behavioral and neural evidence of how sunk costs, benefits, and prospects are integrated within the mental accounting framework to influence choice behavior.

Robust and distributed neural representation of action values.

Studies in rats, monkeys, and humans have found action-value signals in multiple regions of the brain. These findings suggest that action-value signals encoded in these brain structures bias choices toward higher expected rewards. However, previous estimates of action-value signals might have been inflated by serial correlations in neural activity and also by activity related to other decision variables. Here, we applied several statistical tests based on permutation and surrogate data to analyze neural activity recorded from the striatum, frontal cortex, and hippocampus. The results show that previously identified action-value signals in these brain areas cannot be entirely accounted for by concurrent serial correlations in neural activity and action value. We also found that neural activity related to action value is intermixed with signals related to other decision variables. Our findings provide strong evidence for broadly distributed neural signals related to action value throughout the brain.

Neural Signals Related to Outcome Evaluation Are Stronger in CA1 than CA3.

We have shown previously that CA1 conveys significant neural signals necessary to update value of the chosen target, namely chosen value and reward signals. To better understand hippocampal neural processes related to valuation, we compared chosen value- and reward-related neural activity between the CA3 and CA1 regions. Single units were recorded with tetrodes from the dorsal CA3 and CA1 regions of rats performing a dynamic foraging task, and chosen value- and reward-related neural activity was estimated using a reinforcement learning model and multiple regression analyses. Neural signals for chosen value and reward converged in both CA3 and CA1 when a trial outcome was revealed. However, these neural signals were stronger in CA1 than CA3. Consequently, neural signals for reward prediction error and updated chosen value were stronger in CA1 than CA3. Together with our previous finding that CA1 conveys stronger value signals than the subiculum, our results raise the possibility that CA1 might play a particularly important role among hippocampal subregions in evaluating experienced events.