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First Derivative Test: Problem Solving

Imagine an asset price that crashes to a low point, rebounds sharply as bargain-hunters step in, and then gradually declines. Such behavior can be modeled with a smooth function whose turning points represent locally overvalued and undervalued regions. A convenient example that captures rebound followed by decay is:The high and low points of this curve are identified using the first derivative test, which determines where the function changes from increasing to decreasing or vice versa. To...
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Related Experiment Video

Updated: Jun 8, 2026

Measuring the Subjective Value of Risky and Ambiguous Options using Experimental Economics and Functional MRI Methods
13:04

Measuring the Subjective Value of Risky and Ambiguous Options using Experimental Economics and Functional MRI Methods

Published on: September 19, 2012

Differentiable neural substrates for learned and described value and risk.

Thomas H B Fitzgerald1, Ben Seymour, Dominik R Bach

  • 1Wellcome Trust Centre for Neuroimaging, 12 Queen Square, London, UK. thomas.fitzgerald@iop.kcl.ac.uk

Current Biology : CB
|October 5, 2010
PubMed
Summary

Human decision-making differs when choices are based on experience versus explicit descriptions. Brain activity reveals distinct neural processing for learned versus described values and risks during financial decisions.

Related Experiment Videos

Last Updated: Jun 8, 2026

Measuring the Subjective Value of Risky and Ambiguous Options using Experimental Economics and Functional MRI Methods
13:04

Measuring the Subjective Value of Risky and Ambiguous Options using Experimental Economics and Functional MRI Methods

Published on: September 19, 2012

Area of Science:

  • Neuroscience
  • Behavioral Economics
  • Cognitive Psychology

Background:

  • Human decision-making research stems from learning theory (experience-based choices) and behavioral economics (explicitly stated variables).
  • Evidence suggests separate mechanisms for valuing information from experience versus description, but neural underpinnings remain unclear.
  • Understanding these differences is crucial for choices involving mixed information types.

Purpose of the Study:

  • To investigate the behavioral and neural differences in decision-making when options are evaluated based on learned experience versus explicit description.
  • To identify the neural substrates underlying the processing of experienced versus described value and risk.

Main Methods:

  • Subjects made decisions between risky financial options with utilities either learned through experience or explicitly described.
  • Behavioral data on choice patterns were collected.
  • Brain activity was measured using neuroimaging techniques during decision-making tasks.

Main Results:

  • A distinct behavioral pattern emerged when comparing experienced versus described information, indicating differential treatment.
  • This behavioral difference was mirrored neurally, with specific brain regions showing varied sensitivity to learned and described value and risk.
  • Neural encoding of decision variables was influenced by how value information was presented.

Conclusions:

  • The manner in which value information is presented significantly influences both behavior and neural processing during decision-making under risk.
  • Separate neural mechanisms likely support the valuation of information acquired through experience versus description.
  • This highlights the importance of information presentation in understanding human financial decision-making and its neural basis.