In particular, how do we learn bidding strategies across different market scenarios? Here, we investigate the neural mechanisms underlying bidding under different conditions of competition. Despite its key importance in social behaviour and financial modelling, the neural mechanisms of decision-making under market competition are still unclear. Indeed, biological auctions are used to model competition between species and individuals (Reiter, Kanodia, Gupta, Nowak, & Chatterjee, 2015). For instance, baboons (Henzi & Barrett, 2002) and vervet monkeys (Fruteau, Voelkl, van Damme, & Noë, 2009) demonstrate the effect of market competition on the price of natural currencies such as food or grooming. Perceived market competition influences human bidding (van den Bos et al., 2008 Fischbacher, Fong, & Fehr, 2009) and even the value of commodities traded by non-human animals. We often deal with situations where buyers and sellers meet to exchange goods at prices determined by fluctuations in supply and demand. Based on our findings, we proposed a conceptual model that accounts for a sequence of processes that are required to perform successful and flexible bidding under different types of competition. Indeed, we found that the posterior parietal cortex represents the continuous action space of the task, and the frontopolar prefrontal cortex distinguishes among conditions of social competition. We posited that DL is an efficient heuristic for valuation when the action (bid) space is continuous. We found the binary learning signal associated with DL to be represented by neural activity in the striatum distinctly posterior to a weaker reward prediction error signal. We found that DL fit the behaviour best and resulted in higher payoffs. We compared different computational learning models of bidding: directional learning models (DL), where the model bid is “nudged” depending on whether it was accepted or rejected, along with standard reinforcement learning models (RL). Twenty-seven subjects (nine male) played a prototypical bidding game: a double action, with three “market” types, which differed in the number of competitors. We used model-based neuroimaging to investigate the neural mechanisms of bidding behaviour under different types of competition. Yet, how humans learn to bid efficiently remains an open question. Auctions have been widely used to model competition of individuals for resources, and bidding behaviour plays a major role in social competition. Competition for resources is a fundamental characteristic of evolution.
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