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Higher Mental Functions of Brain: Learning and Memory01:26

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Memory is one of the most vital higher mental functions of the brain. Memory is closely related to learning because it enables us to retain information and experiences from our past to use them in our present life. It also helps us to remember facts, events, and skills, such as riding a bike or swimming. There are two types of memory — declarative memory, which involves memorizing facts or events, and procedural memory, which enables us to remember how to do something like writing or...
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Hindsight bias leads you to believe that the event you just experienced was predictable, even though it really wasn’t. In other words, you knew all along that things would turn out the way they did. Can you relate this to the phrase "Hindsight is 20/20" now? 
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Forgetting is an intrinsic aspect of human memory, characterized by the gradual loss or inaccessibility of information over time. Hermann Ebbinghaus, a pioneering psychologist, extensively studied this phenomenon and formulated the forgetting curve. This curve illustrates that memory loss occurs rapidly immediately after learning and then decelerates over time. Several mechanisms contribute to forgetting, including encoding failure, storage decay, retrieval failure, and interference.
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Reason and Intuition01:37

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The human brain processes information for decision-making using one of two routes: an intuitive system and a rational system (Epstein, 1994; popularized by Kahneman, 2011 as System 1 and System 2, respectively). The intuitive system is quick, impulsive, and operates with minimal effort, relying on emotions or habits to provide cues for what to do next, while the rational system is logical, analytical, deliberate, and methodical. Research in neuropsychology suggests that the...
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In order to make good decisions, we use our knowledge and our reasoning. Often, this knowledge and reasoning is sound and solid. However, sometimes, we are swayed by biases or by others manipulating a situation. For example, let’s say you and three friends wanted to rent a house and had a combined target budget of $1,600. The realtor shows you only very run-down houses for $1,600 and then shows you a very nice house for $2,000. Might you ask each person to pay more in rent to get the...
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Counterfactual thinking is a cognitive process wherein individuals mentally reconstruct alternative versions of past events, often beginning with “what if” or “if only.” This reflective mechanism plays a significant role in shaping emotional experiences and guiding future behavior. Though typically triggered by unfavorable or unexpected outcomes, counterfactual thinking can also emerge in mundane, everyday decisions and experiences, revealing its deep entrenchment in...
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Related Experiment Video

Updated: May 1, 2026

The Adventures of Fundi Intervention Based on the Cognitive and Emotional Processing in Attention Deficit Hyperactive Disorder Patients
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The Adventures of Fundi Intervention Based on the Cognitive and Emotional Processing in Attention Deficit Hyperactive Disorder Patients

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Sunk costs in the human brain.

Ariane Haller1, Lars Schwabe2

  • 1Institute of Experimental Psychology, Department of Biological Psychology, Heinrich-Heine University Düsseldorf, 40225 Düsseldorf, Germany.

Neuroimage
|April 23, 2014
PubMed
Summary
This summary is machine-generated.

Humans often fall prey to the sunk cost effect, letting past investments influence current decisions. This study reveals that reduced ventromedial prefrontal cortex (vmPFC) activity correlates with this bias, influenced by the dorsolateral prefrontal cortex (dlPFC).

Keywords:
Decision-makingNormsPrefrontal cortexSunk costsdlPFCvmPFC

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Area of Science:

  • Neuroscience
  • Cognitive Psychology
  • Behavioral Economics

Background:

  • Rational decision-making excludes irrecoverable past costs, yet humans exhibit a 'sunk cost effect' by considering them.
  • This bias can lead to significant political, financial, and personal consequences.
  • The neural underpinnings of the sunk cost effect remain largely unexplored.

Purpose of the Study:

  • To investigate the neural basis of the sunk cost effect in human decision-making.
  • To identify brain regions involved in biasing decisions based on past investments.

Main Methods:

  • Functional magnetic resonance imaging (fMRI) was employed.
  • A novel financial decision-making task was designed to elicit the sunk cost effect.

Main Results:

  • Previous investments reduced the contribution of the ventromedial prefrontal cortex (vmPFC) to current decision-making.
  • This reduction in vmPFC activity positively correlated with the magnitude of the sunk cost effect.
  • Activity in the dorsolateral prefrontal cortex (dlPFC) was linked to resource conservation norms and negatively correlated with vmPFC activity.

Conclusions:

  • Past investments can bias decision-making through neural mechanisms in the human brain.
  • The interaction between vmPFC and dlPFC may underlie the tendency to continue investing in failing ventures ('throwing good money after bad').