Neuroeconomics with neuroimaging is a novel approach involving economics and neuroscience. The newsvendor problem (NP) is a prevalent economics concept that may be used to map brain activations during NP-evoked risky decision making. In this study, we hypothesized that key brain regions responsible for NP are dorsolateral prefrontal cortex (DLPFC) and orbitofrontal cortex (OFC). Twenty-seven human subjects participated in the study using 40 NP trials; the participants were randomly assigned to a group with a low-profit margin (LM) or high-profit margin (HM) treatment. Cerebral hemodynamic responses were recorded simultaneously during the NP experiments from all participants with a 77-channel functional Near-infrared Spectroscopy (fNIRS) system. After data preprocessing, general linear model was applied to generate brain activation maps, followed by statistical t-tests. The results showed that: (a) DLPFC and OFC were significantly evoked by NP versus baseline regardless of treatment types; (b) DLPFC and OFC were activated by HM versus baseline; and (c) DLPFC was activated during LM versus baseline. Furthermore, significant deactivation in right DLPFC was shown due to LM with respect to HM. This study affirms that DLPFC and OFC are two key cortical regions when solving NP. In particular, right DLPFC was found to be more deactivated under challenging risk decision making.

Neural correlates of newsvendor-based decision making in the human brain: An exploratory study to link neuroeconomics with neuroimaging using fNIRS