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Cracking the Code of Game Theory: Deliberation vs. Intuition—NTU Department of Economics Associate Professor Chen-Ying Huang's Research Findings Published in Science

An intercollegiate research team, led by NTU Department of Economics Associate Professor Dr. Chen-Ying Huang, utilized functional magnetic resonance imaging technology to study the reactions of a group of subjects in two different gaming situations. Their research results discovered that in the human decision making process, reasoning and intuition involve drastically different cerebral cortical areas, and different degrees of activation. Dr. Huang's research findings, which integrated the knowledge of economics with the knowledge of neuroscience, was the first of its kind published in the international top notch journal—Science. (the co-authors are, in their order or appearance: Dr. Wen-Jui Kuo of the Institute of Neuroscience, National Yang-Ming University, Dr. Tomas Sjostrom, Professor of Economics, Rutgers University, U.S.A., Miss Yu-Ping Chen,. Master student, Department of Economics, NTU, and Mr. Yen-Hsiang Wang, undergraduate student, Department of Electrical Electrical Engineering, NTU).

Psychological research indicates that human thinking can be divided into two types: reason-based deliberation and intuitive thinking. The former is relatively slow and controlled, whereas the latter is fast and emotional. The present study focused on the roles these two different types of thinking model played in strategic interaction.

Game theory gives a more profuse description to reason-based deliberation in strategic interaction situations. For instance, in the famous prisoner's dilemma game, two prisoners will make decisions to confess in accordance with their respective reasoning. Since this type of game relies on ordinary people's resorting to rational thinking to induce the actions they will take step by step, it is a typical reason-based thinking, also known as "dominance solvable games." However, as the 2005 Nobel laureate Thomas Schelling pointed out, in some strategic interaction situations the two sides playing the game have to make the same choice even though they have no chance to communicate with each other.

In this type of game, reason-based deliberation does not offer any help toward decision making, players have to rely on their intuition to search for the "focal point" of mutual concern in order to succeed in making the same decision. Games of this nature which rely on intuition are thus referred to as " coordination games."

Basing their experiments on these two typical game models, Dr. Huang's research team member utilized functional magnetic imaging technology to measure the activation and response of the cerebral cortex of the subjects when they were confronted with dominance-solvable games and coordination games with a view toward studying the neuro-psychological mechanism implicit in their reasoning or intuitive thinking. Functional magnetic resonance imaging is a non-invasive, high resolution imaging technology. As an important tool in modern day cognitive science, the images acquired through this technology can offer comparisons and contrasts of the structures of the soft tissues of the brain, and provide functional information on cognitive activation.

The experiments designed by Dr. Huang's research team successfully located the neuro-psychological process that were implicit behind the two types of games. The research results indicate that, in comparison with intuitive thinking, in reason-based deliberations the degrees of activation in the precuneus and the fronto-parietal areas of the human brain are higher. These areas of the human brain are significantly correlated with human rational thinking capability and intelligence quotient. And, in contrast to reason-based deliberation, intuitive thinking makes the insula and the anterior cinqulate cortex of the human brain relatively more active. Recent studies have pointed out that the insula and the anterior cinqulate cortex are correlated with the social behaviors of human beings, such as collaboration, trust, empathy, and even love. These social behaviors are often associated with complex and interwoven factors, resulting in a need for fast and appropriate response. This bears a considerable degree of similarity to the coordination games in which subjects have to rely on their intuition to quickly find the focal point of mutual concern.

In previous studies, because quantified mathematical methods were hard to come by to evaluate coordination games, so the number of related researches were few. Dr. Huang's research team reaffirmed the inadequacy in mainstream research as pointed out by Thomas Schelling in that, notwithstanding the fact that the intuitive thinking process can hardly be theorized, it is nevertheless a quite special thinking mode in mankind's unique social behaviors. Therefore, understanding the neuro-psychological mechanism in intuitive thinking conduces to our understanding of the human social behavior.,

Dr. Huang's research results further point out that, there is yet another difference between the rational thinking process and the intuitive thinking process: when the degree of difficulty in rational thinking process increases, the level of activation in the fronto-parietal areas of the human brain increases accordingly. However, when intuitive thinking becomes easier, the level of activation of the insula increases conversely. This finding indicates once again that there are quintessential differences between these two types of thinking—the activities of the cerebral cortex are positively correlated with the degree of difficulty of rational thinking, whereas they are negatively correlated with the degree of difficulty of intuitive thinking.

Aside from academic contributions, Dr. Huang's research establishes a successful model of inter-departmental, intercollegiate, and even cross-national cooperation. As her research was built on mutual respect and benign interaction among scholars with different specializations, its amazing outcome is attributable to the willingness on the part of interdisciplinary scholars to listen to one another, and to make up for one another's deficiencies. Therein lies the true spirit of scientific research.

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