Neural underpinnings of value-guided choice during auction tasks: An eye-fixation related potentials study

A comparison of reward processing during Becker-DeGroot-Marschak and Vickrey auctions: An ERP study

Vickrey auctions (VA) and Becker-DeGroot-Marschak auctions (BDM) are strategically equivalent demand-revealing mechanisms, differentiated only by a human opponent in the VA, and a random-number-generator opponent in the BDM. Game parameters are such that players are incentivized to reveal their private subjective values (SV) and behavior should be identical in both tasks. However, this has been repeatedly shown not to be the case. In this study, the neural correlates of outcome feedback processing during VA and BDM were directly compared using electroencephalography. Twenty-eight healthy participants bid for household products which were then divided into high- and low-SV categories. The VA included a human opponent deception to induce a social environment, while in reality a random-number-generator was used in both tasks. A P3 component peaking at 336 ms over midline parietal sites showed more positive amplitudes for high bid values, and for win outcomes in the VA but not the BDM. Both auctions also elicited a Reward Positivity potential, maximal at 275 ms along the central midline electrodes, that was not modulated by auction task or SV. Further, an exploratory N170 potential in the right occipitotemporal electrodes and a vertex positive potential component were stronger in the VA relative to the BDM. Results point to an enhanced cortical response to bid outcomes during VA task in a potential component associated with emotional control, and to the occurrence of face-sensitive potentials in VA but not in BDM auction. These findings suggest modulation of bid outcome processing by the social-competitive aspect of auction tasks. Directly comparing two prominent auction paradigms affords the opportunity to isolate the impact of social environment on competitive, risky decision-making. Findings suggest that feedback processing as early as 176 ms is facilitated by the presence of a human competitor, and later processing is modulated by social context and subjective value.

Episodic memory formation in unrestricted viewing

The brain systems of episodic memory and oculomotor control are tightly linked, suggesting a crucial role of eye movements in memory. But little is known about the neural mechanisms of memory formation across eye movements in unrestricted viewing behavior. Here, we leverage simultaneous eye tracking and EEG recording to examine episodic memory formation in free viewing. Participants memorized multi-element events while their EEG and eye movements were concurrently recorded. Each event comprised elements from three categories (face, object, place), with two exemplars from each category, in different locations on the screen. A subsequent associative memory test assessed participants' memory for the between-category associations that specified each event. We used a deconvolution approach to overcome the problem of overlapping EEG responses to sequential saccades in free viewing. Brain activity was time-locked to the fixation onsets, and we examined EEG power in the theta and alpha frequency bands, the putative oscillatory correlates of episodic encoding mechanisms. Three modulations of fixation-related EEG predicted high subsequent memory performance: (1) theta increase at fixations after between-category gaze transitions, (2) theta and alpha increase at fixations after within-element gaze transitions, (3) alpha decrease at fixations after between-exemplar gaze transitions. Thus, event encoding with unrestricted viewing behavior was characterized by three neural mechanisms, manifested in fixation-locked theta and alpha EEG activity that rapidly turned on and off during the unfolding eye movement sequences. These three distinct neural mechanisms may be the essential building blocks that subserve the buildup of coherent episodic memories during unrestricted viewing behavior.

Bid outcome processing in Vickrey auctions: An ERP study

Online retailers often sell products using a socially competitive second-price sealed-bid auction known as a Vickrey auction (VA), an incentivized demand-revealing mechanism used to elicit players' subjective values. The VA presents a situation of risky decision-making, which typically implements value processing and a loss aversion mechanism. Neural outcome processing of VA bids are not known; this study explores this for the first time using EEG. Twenty-eight healthy participants bid on household items against an anonymous, computerized opponent. Bid outcome event-related potentials were predicted to differentiate between three conditions: outbid (no-win), large margin win (bargain), and small margin win (snatch). Individual loss aversion values were evaluated in a separate behavioral experiment offering gains or losses of variable amounts but equal chances against an assured gain. Processing outcomes of VA bids were associated with a feedback-related negativity (FRN) potential with a spatial maximum at the vertex (251-271 ms), where bargain win trials resulted in greater FRN amplitudes than snatch win trials. Additionally, a P300 potential was sensitive to win versus no-win outcomes and to retail price. Individual loss aversion level did not correlate with the strength of FRN or P300. Results show that outcome processing in a VA is associated with FRN that differentiates between relatively advantageous and less advantageous gains, and a P300 that distinguishes between the more and less expensive auction items. Our findings pave the way to an objective exploration of economic decision-making and purchasing behavior involving a widely popular auction.

A systematic review of the prediction of consumer preference using EEG measures and machine-learning in neuromarketing research

Introduction

The present paper discusses the findings of a systematic review of EEG measures in neuromarketing, identifying which EEG measures are the most robust predictor of customer preference in neuromarketing. The review investigated which TF effect (e.g., theta-band power), and ERP component (e.g., N400) was most consistently reflective of self-reported preference. Machine-learning prediction also investigated, along with the use of EEG when combined with physiological measures such as eye-tracking.

Methods

Search terms ‘neuromarketing’ and ‘consumer neuroscience’ identified papers that used EEG measures. Publications were excluded if they were primarily written in a language other than English or were not published as journal articles (e.g., book chapters). 174 papers were included in the present review.

Results

Frontal alpha asymmetry (FAA) was the most reliable TF signal of preference and was able to differentiate positive from negative consumer responses. Similarly, the late positive potential (LPP) was the most reliable ERP component, reflecting conscious emotional evaluation of products and advertising. However, there was limited consistency across papers, with each measure showing mixed results when related to preference and purchase behaviour.

Conclusions and implications

FAA and the LPP were the most consistent markers of emotional responses to marketing stimuli, consumer preference and purchase intention. Predictive accuracy of FAA and the LPP was greatly improved through the use of machine-learning prediction, especially when combined with eye-tracking or facial expression analyses.