Journal of Neuroscience, Psychology, and Economics © 2012 American Psychological Association 2012, Vol. 5, No. 1, 38–61 1937-321X/12/$12.00 DOI: 10.1037/a0026882 Towards an Externalist Neuroeconomics: Dual Selves, Signs, and Choice

Carsten Herrmann-Pillath Frankfurt School of Finance and Management

Recently, reductionist models of choice have been proposed which directly reduce a modified version of economic utility theory to neuroscience. I propose an alternative conceptual framework that adopts the position of externalism, which I further narrow down to a distributed cognition framework, and eventually to a biosemiotic model of human choice. I relate this to existing modular theories on the brain, which I generalize into a dual selves model. In this model, the internal information asymmetries and deficiencies of the brain/body system drive the reliance of choices on external cognitive mechanisms as manifested in sign systems. I analyze this interaction and apply the combined biosemiotics/dual selves model to an important set of falsifiers of an integrated reductionist model of neuroeconomics, that is, addiction and other consump- tion disorders.

Keywords: foundations of neuroeconomics, semiotics, dual selves, distributed cognition, con- sumption disorders

I. Externalism Versus Internalism in conscious and automatic processes, and Neuroeconomics would thus result in models which differ from the standard economic model (Camerer, 2007; One of the fundamental issues in current Camerer, Loewenstein, & Prelec, 2005). The neuroeconomic research is the question of drawback of these views is that they still lack whether the analysis of the brain should fol- a coherent and consistent theoretical frame- low the standard economic model or whether work comparable to the standard economic the introduction of an alternative framework approach in terms of its simplicity, consis- is needed. Following the standard economic tency and empirical tractability. This defi- model means referring to the utility function ciency also affects the applied fields of neu- framework and identifying neural correlates. roeconomics (as recognized by Hubert, 2010; This paradigm has been established canoni- Hubert & Kenning, 2008). On the other hand, cally by Glimcher (2009, 2011). Alternative however, a paradox lurks behind the reduc- approaches would take certain insights from tionist program. Ultimately, applied (neuro)- psychology and the brain sciences as a start- economics would no longer need to refer to ing point, such as the distinction between neuroscience at all, because on the level of observable behavior the (possibly modified) standard economic tools would suffice. It is I received important advice from the JNPE referees, precisely if the reduction program can suc- which helped to improve the paper substantially. Parts of ceed that neuroeconomics will become irrel- earlier versions were presented to workshops at Durham University, Jena University and the annual Neuropsy- evant for economics because all the essential choeconomics conference 2011 and the EAEPE 2011 an- insights of neuroeconomics would be repro- nual conference at Vienna. I am indebted to Don Ross for ducible within economics without any refer- his detailed comments. The usual disclaimer applies. Fi- ence to neuronal facts. This would be the case nally, special thanks to Judith Mader who polished my English language. as long as the phenomena to be explained Correspondence concerning this article should be ad- remain on the ontological level of the units of dressed to Carsten Herrmann-Pillath, Academic Director, choice, that is, the individuals (for related East-West Centre for Business Studies and Cultural Sci- criticisms of neuroeconomics, see Bernheim, ence, Frankfurt School of Finance and Management, Son- nemannstraße 9-11, 60314 Frankfurt am Main, Germany. 2009; Gul & Pesendorfer, 2008; Harrison, E-mail: [email protected] 2008). Therefore, Glimcher’s (2011) method-

38 TOWARDS AN EXTERNALIST NEUROECONOMICS 39 ological claims deserve close attention, and reductionism and to search for an alternative are certainly a crucible for testing the relation that needs to be externalist if it aims at an between neuroscience and economics. integration between neuroscience and econom- ics. Therefore, my article aims to offer a con- The Pivot: Externalism in the ceptual framework for externalist neuroeco- Philosophy of Mind nomics (a research program inaugurated by Ross, 2005). In this article my central concern is how to design a conceptual framework for neuroco- Rendering Externalism Empirically nomics which offers an alternative to the re- Tractable: Biosemiotics ductionist approach, and because of this will demonstrate the ultimate relevance of neuro- To achieve the aim of establishing the case economics and neuroscience for economics. for externalist neuroeconomics, I rely on other In doing this, I mainly adopt a philosophical approaches to externalism in the cognitive sci- perspective, especially the philosophy of ences which focus on the role of external causal mind, in order to construct a conceptual processes establishing mental phenomena in framework which might help to organize the terms of interactions between neuronal states different theoretical propositions and hypoth- and external facts. These approaches are to be eses that come together at the neuroeconom- found in the growing literature on “distributed ics interface, although originally emerging cognition” or the “extended mind” (e.g., Clark, from different disciplines (compare Foxall, 2011; Hutchins, 1995; Hutchins, 2005; 2008). Sterelny, 2004; Ross, Spurrett, Kincaid, & Ste- One foundational issue in the philosophy of phens, 2007; for a critical view, see, e.g., Spre- mind is the distinction between externalism and vak, 2009). In this literature, the operations of internalism regarding mental phenomena (for the human mind are seen as being fundamen- surveys, see Lau & Deutsch, 2008; Schantz, tally dependent on external facts, referring not 2004; Wilson, 2004). Reductionist neuroeco- only to the obvious role of devices which lever- nomics seems ambivalent with regard to this age cognitive skills, but more fundamentally to distinction and this reveals the need for a con- the externalization of all cognitive processes in ceptual clarification. The reason for this is that the sense that cognitive performance essentially the standard economic model is externalist, involves the external world and includes both whereas its proposed neuroeconomic version is physical entities and social interaction. There- internalist. Externalism in economics is re- fore, a straightforward sketch of an externalist flected in the revealed preference approach to approach that is different from the externalism the utility function: The utility function refers of standard economics is possible. This would exclusively to observable behavior with no ref- offer a fresh view on neuroeconomics (for a erence whatsoever to internal mental states; the related argument, see Wilcox, 2008). In this concept of utility is merely a mathematical de- view, if one continued to use the term “utility” vice to describe observed actions (Ross, 2005). in explaining human choice, “utility” would not In contrast, reductionist interpretations of the correspond exclusively to a neuronal state in a utility concept refer exclusively to internal neu- neuro-reductionist approach, but to a causal ronal states. So the important difference be- conjunction between a neuronal state and an tween economics and reductionist neuroeco- external fact. nomics is that the former is externalist, the latter In order to render the philosophical approach internalist: This means that reductionist claims of externalism applicable in the context of neu- actually result in a metamorphosis of the (im- roeconomics, I propose to introduce the ap- plicit) economic position of externalism into proach of biosemiotics (which is a new way of one of internalism. As a consequence, reduc- making use of semiotics in our context; for tionist neuroeconomics entails a fundamental surveys on other uses in consumer research, see clash between two philosophical positions im- Mick, 1986; Mick, Burroughs, Hetzel, & Bran- plicit in the two disciplinary approaches. I argue nen, 2004). According to this view, all mental that this inconsistency in the philosophical phenomena are seen as interactions between foundations is a sufficient reason to discard neuronal states and signs, with signs being ex- 40 HERRMANN-PILLATH ternal physical facts. These interactions have a nomena to empirically substantiate my argu- function, which basically boils down to biolog- ment here. This also seems methodologically ical categories such as homeostasis or adapta- appropriate as the phenomenon of addiction can tion, which are relative to the environment. This be seen as one of the possible strong falsifiers of reflects the etiological approach to function, standard economic models of consumer choice, which sees functions as the result of past and seminally applied by Becker and Murphy current processes of selection in particular en- (1988) to addiction (see Ross, Sharp, vironments (for an overview of theories of func- Vuchinich, & Spurrett, 2008; West, 2006). tion, see Krohs & Kroes, 2009). Thus, the con- Biosemiotics builds on the philosophy of junction between internal neuronal states and Charles Sanders Peirce (for a selection of im- external facts has a function relative to a con- portant contributions, see Peirce, 1992, 1998, text. and for surveys on Peirce see Atkin, 2009; This reference to functions implies the rejec- Burch, 2010). It emphasizes the generation of tion of purely internalist conceptions of mental information in the coevolution of biological states. In the philosophy of mind, this position mechanisms such as neuronal processes and has been developed in the context of teleose- signs which are part of the physical environ- mantics (Macdonald & Papineau 2006a; Milli- ment. This results in certain interpretations of kan, 1989; Neander, 2009). Teleosemantics environmental inputs which are manifest in the claims that all mental phenomena, and most of behavioral responses as outputs. Correspond- all the category of meaning, can be explained in ingly, I argue that neuroeconomics has to build terms of functions which emerge from a process on the interaction between signs and neuronal of selection. The central problem in this ap- mechanisms. These can be dysfunctional, de- proach is the question of malfunctioning, that is, pending on whether the generated information the dysjunction between certain behavior, based leads to responses that fail to meet certain se- on external information inputs, and the required lective criteria in the environment. I, therefore, functioning. Basically, this problem can be ren- argue that, for example, addictions to smoking dered in biosemiotic terms: If a frog perceives a emerge from the interaction between neuro- fly, it perceives certain movements, shapes, or pharmacological phenomena on the one hand shades of colors, which are signs that work via perceptions and generate certain responses. and environmental determinants on the other, These responses can fail if the real object is not with the latter working via the intermediation of a fly (Neander, 2006). Interestingly, in econom- signs. This results in responses which are func- ics, this role of malfunctioning has corre- tional relative to certain contexts. So, within sponded to the role of anomalies in driving certain contexts, smoking can be functional and research in behavioral economics, and ulti- would not be classified as an addiction in the mately neuroeconomics, in recent decades. clinical sense. This is the case in certain histor- ical periods and demonstrates the difficulties of The Proof of the Methodological Pudding: demarcating the conceptual boundaries of the Consumption Disorders and Information term. The definitions range from the narrow Processing in the Brain neuropharmacological to extremely broad defi- nitions claiming that almost all goods and all Indeed, the acid test for neuroeconomic the- behavior can become the object of addictions ories of consumer choice is the entire range of (e.g., Ascoli & McCabe, 2006). The facts about behavioral disorders, such as eating disorders or these phenomena are well known and so I am, addictions. These clearly involve the perception therefore, not presenting any new empirical in- of malfunctioning on the part of individuals and sights here. My task is to put these facts into a their social environment. Addictions are seen as coherent conceptual framework of neuroeco- dysfunctions because they can impair proper nomics which includes malfunctioning as a spe- functioning either in the general sense of health cial yet methodologically crucial case (in the (the smoker suffering from lung cancer) or the sense of experimentum crucis), and serves to more specific sense of fulfilling certain social systematize neuroeconomics so as to offer an roles (the gambler squandering the family as- externalist alternative to reductionist neuro- sets; West, 2006). I, therefore, use these phe- internalism. TOWARDS AN EXTERNALIST NEUROECONOMICS 41

In the most general sense, dysfunctional the internal incompleteness of information choice can be interpreted as a failure in in- processing in the brain. Section 3 presents the formation processing, ranging from insuffi- basics of biosemiotics. Section 4 links the cient external information to the manifold dual selves model with the biosemiotic frame- ways in which the internal decision making work and offers the complete externalist process might fail (Redish, Jensen, & John- model of neuroeconomics. Section 5 applies son, 2008). Let us assume that there is a this approach to a methodological case study, process in the brain that involves the making the economic model of consumption and ad- of choices, both in terms of conscious opera- diction proposed by Laibson. Section 6 ex- tions such as deliberation or in terms of ha- tends this analysis into a general biosemiotic bitual responses. Choice relies on information framework for addiction theories. Section 7 processing. In the standard economic argu- concludes by highlighting the significance of ment there has been a great deal of emphasis the externalist view for the relationship be- on information about the environment. This tween neuroeconomics and economics. information can be imperfect, incomplete, or even false. There is, however, another infor- mation problem which emerges in the relation II. Dual Selves: The Incompleteness of between the decision making process and the Internal Information Processing in organism in toto: information processing with the Brain reference to internal states of the organism can also be incomplete, imperfect, and false. Analytically, the dual-selves model is an ax- As we shall see, this argument even applies to iomatic alternative to the standard model of the the internal organization of the brain. These individual in economics (for an early discussion fundamental information asymmetries imply of alternatives, see Elster, 1986). This means that the minimalistic theoretical model of the that I do not posit the model as an empirical, individual cannot be a unitary one, but must hence neuroanatomical hypothesis about brain be at least a dual one, which matches the structure but as a conceptual framework to sys- principal-agent models in economics (Brocas tematize hypotheses about empirical data. This & Carrillo, 2008). Thus, the complete frame- corresponds to the distinction between “molar” work that I am going to present combines the and “molecular” levels of analysis in neuroeco- literature on dual selves models with the bio- nomics: The dual selves model is a most parsi- semiotic approach, resulting in an externalist monious molar theory of brain functioning and approach to neuroeconomics. does not make any specific claim about molec- To summarize, my argument boils down to ular reduction, while maintaining the general the following hypothesis (inspired by Don Ross, personal communication). So far, re- approach that all molar mechanisms must be ductionist neuroeconomics focuses on stimu- physically embodied in molecural mechanisms lus-centered modeling of valorized learning, (Ross et al., 2008). It is the most simple, and which, however, appears to marginalize im- dual, version of a larger set of theories about portant recent developments in cognitive sci- brain modularity. As such, the most simple dual ences, psychology and brain research (this selves model could be further enriched by more gap is acknowledged implicitly by Glimcher, specific models of (sub)systems, such as a long- 2011 when he discusses the unresolved prob- term planning system and a short-term impul- lem of the representation of subjective value sive system in the theory of hyperbolic dis- and probability). Therefore, I confront this counting. I would treat these as subsystems of a model with a model in which stimuli are seen more general and comprehensive decision- as being cognitively integrated and mediated making system, while maintaining the clear via signs, with signs being external phenom- distinction between these subsystems as molar- ena. This is the defining feature of the pro- level concepts and the underlying neuroanat- gram of externalist neuroeconomics. From omy, that is, the molecular level analysis (e.g., this vantage point, the article proceeds as Laibson, 2002; McClure, Ericson, Laibson, follows. In section 2 I develop the dual selves Loewenstein, & Cohen, 2007; and the corre- approach, which underlies the argument of sponding critique in Ross et al., 2008). 42 HERRMANN-PILLATH

Modularization of the Brain and ple, in the basic distinction between conscious Incompleteness of Internal Information processes and all other processes in the brain, Processing where consciousness is a scarce resource for which a multitude of other processes compete The dual selves model must be seen against (Dennett, 1991; Calvin, 1998). It follows from the background of evolutionary approaches to this that there are fundamental limits to the the individual which argue that the brain is not formation of a perfect and consistent integrated a fully integrated, coherent and consistent deci- decision system. There is a direct correspon- sion apparatus but consists of different modules dence with established axiomatic approaches on which are adapted to different tasks which have collective decision-making in economics: Once emerged in past selective contexts (Tooby & we suppose the brain to be a system of partly Cosmides, 2005; Platt & Padoa-Schioppa, autonomous modules, the Arrow-Condorcet 2009). From this it follows that the coordination theorem applies, that is, the individual cannot between modules is a primordial metaprocess in have a consistent and unique preference func- the brain. The central theoretical argument un- tion (Steedman & Krause, 1986; Ross, 2005). derlying these modular models is that this co- One of the first systematic, albeit neglected, ordination cannot be achieved by means of a explorations of the dual selves approach was centralized unit of information processing and presented by the sociologist James Coleman decision making (the “homunculus” according (1990), who distinguishes between “Object to Dennett, 1991). Self” and “Acting Self,” a terminology that I The theoretical foundation of the dual selves will adopt in what follows. As such, this is a model lies in the principled constraints of infor- purely theoretical distinction in terms of two different aspects or functions in individual mation processing in complex neuronal sys- choice, with no presumptions about brain loca- tems. These result from the internal specializa- tions. The distinction is rather about two funda- tion of different parts. The most simple pattern mental functional modes in which the brain can of specialization is the minimal duality of a operate. One function relates to the evaluation receptor system as well as effector system. of outcomes of actions (Coleman calls this the These are connected by means of a mapping “receptor function”), the other function relates relation. The dual selves approach can in this to the anticipation of outcomes and the resulting way be introduced as an axiomatic proposition, process of choice (Coleman’s “actuator func- stating that in a neuronal system with the min- tion”). If we follow an evolutionary argument, imal distinction between a receptor system and Coleman’s proposal can be directly related to an effector system connected by means of map- the duality of a receptor and an effector system. pings, that is, internal representations, mutual In this case, the evaluative dimension inheres information asymmetry between the subsystems the past selection of certain combinations be- is a generic feature of the system. That is, we tween receptor and effector systems through can apply what is fundamentally an economic time, without the necessary requirement of a argument to the impossibility of complete ag- specialized evaluative system intermediating gregation and centralization of information in between the two. the brain (as argued in Brocas & Carrillo, 2008). This relates to first, the purely quantitative lim- A Standard Model: “Wanting” and itations to connectivity, second, to the resulting “Liking” qualitative differences of functional perspec- tives, and third, to the role of entropic forces in Dual selves models have a long tradition in information transmission (Kåhre, 2002). both behavioral economics and the related neu- These arguments can be further strengthened rosciences, with varying foci. In one strand, the if we consider the fact that the brain is a com- distinction between “experience utility” and plex system of parallel and competing neuronal “decision utility” has been introduced (Kahne- processes which manifests a dynamism that can mann & Krueger, 2006; Kahnemann, Wakker, be described by models from complexity theory & Sarin, 1997), which would relate to the Ob- and synergetics (West, 2006; Oullier, Kirman & ject Self and the Acting Self respectively: Indi- Kelso, 2008). This can be observed, for exam- viduals manifest systematic gaps between what TOWARDS AN EXTERNALIST NEUROECONOMICS 43 they experience as an outcome during certain (e.g., Knutson & Wimmer, 2007; Knutson, Del- actions and what they remember and anticipate, gado, & Phillips, 2009). even under very simple experimental situations However, neuroeconomic knowledge is still such as feeling the temperature of water. This in flux, so that the “Wanting” versus “Liking” implies that choices are taken on the basis of duality clearly counts as a molar analysis, information that does not unequivocally reflect though building on a number of molecular-level the outcomes. This model of dual utility mea- observations. The notion of modularity is com- sures differs fundamentally from the standard plex and, for example, might also include a economic model. The standard economic model functional differentiation between systems pro- focuses only on decision utility, especially in cessing positive (rewards) and negative (losses) the context of the theory of revealed preference, outcomes and the signals related to them. This taking observed behavior as directly represent- is important for providing a neuroscientific ing utilities. This distinction is of relevance in foundation for prospect theory (e.g., Knutson & many contexts, such as, for example, in the Greer, 2008; Stanton & Welpe, 2010; Trepel et analysis of the psychological phenomena of al., 2005; for an alternative view, see Tom et al., self-deception (Mijovic-Prelec & Prelec, 2010). 2007). Another neuroeconomic version of a In the neuroeconomics context, a related fun- dual selves approach is the explanation of hy- damental distinction has been made in terms of perbolic time preferences in terms of the inter- the “Wanting” versus the “Liking systems.” action between two brain modules with differ- Sometimes a “Learning System” is also intro- ent discounting mechanisms (Jamison & duced, as in Camerer (2006) or Berridge (2009), Wegner, 2010; McClure et al., 2007). On the but, in my reading of the neuroeconomic liter- contrary, Glimcher (2003, 2009, 2011) sees the ature, learning is either a process that takes brain as a unified decision system as far as place in the Wanting system, which builds on the mechanism of choice is concerned (which dopaminergic circuits enabling operant condi- relates to the common currency hypothesis, see tioning, or is an emergent feature of the inter- Landreth & Bickle, 2008). Correspondingly, actions between the different systems. Separat- many economists emphasize this position in the ing a Learning system from other systems of the neuroeconomics literature and explicitly reject brain seems redundant, as learning is a major multiple selves models (e.g., Bernheim & Ran- mode of operation of the brain as a supersystem. gel, 2004; in contrast to economic dual selves The distinction between “Wanting” and “Lik- models such as proposed by Be´nabou & Tirole, ing” results from the identification of specific 2002 or Fudenberg & Levine, 2006). However, neurophysiological circuits which enable rein- both strands in the literature seem to converge forcement learning, and which mainly involve on the functional duality of decision making the neurotransmitter dopamine (for a survey, and ultimate evaluation. For example, Glimcher see Schultz, 2009). The dopaminergic circuits (2009) clearly states that his unified model is a build on the perceived discrepancy between model of choice, but not a model of experienced goal and goal attainment, that is, the deviations well-being (which would maintain, among oth- between expectations and outcomes (i.e., cod- ers, the emerging divide between the economic ing reward prediction error). The central point is theory of choice and the economic analysis of that perceived well-being does not only depend welfare, see Camerer, 2006, and the cautious on the actual outcome, but also on the general remarks in Glimcher, 2011). changes and levels of dopamine in the brain. This introduces a systematic differentiation be- Open Ends in the Argument of the tween the process of choice and the evaluation Reductionist Alternative of outcomes, and this fits into the Object Self and Acting Self dualism. The dopaminergic cir- In this context, we must consider that even cuits are associated with the latter, and all other the most systematic exposition of the integrated systems that indicate proper organismic func- model of neuroeconomics presented by Glim- tioning, with the former. This functional differ- cher (2011) has several open ends which indi- entiation is also reflected in brain architecture, cate the possible need to argue in terms of a which provides the physical structure in which dualistic model. This is because choice is pri- the dynamic mappings proceed continuously marily seen as being driven by expected subjec- 44 HERRMANN-PILLATH tive value as well as by the corresponding and the experienced values are generated in deviations between realized value and expecta- different subsystems of the brain. Ultimately, tions. Following the reward prediction error the- the notion of individual welfare or well-being ory, the values underlying choices are grounded needs to refer to ExperSV. in the difference between what is called “expe- So it seems that the discussion sometimes rienced value” ExperSV and the discounted ex- confuses the question of the consistency of the pected subjective value ESV, which is not about decision (sub)system with the question of the future experienced values, but future expected consistency between the Wanting and the Lik- values. In turn, subjective value SV is the result ing system. Even if the Acting Self was mod- of a learning process through time, in which the eled as an internally consistent system, this subjective values adapt in t ϩ 1. All subjective would not preclude conflicts occurring between value relates closely with learning processes the Wanting and the Liking systems. In partic- through time and with the mechanisms that gen- ular, observed behavior is a consequence of erate expectations. individual histories of learning how to balance Reward predictions are not about realized the two systems and is most obvious in the wide SVs, but about expected subjective values, variation between mixes of seemingly rational which makes the interactions recursive. So, the and irrational behaviors in every human popu- degree of my reward prediction error about ac- lation. This is especially the case with regard to tual subjective values depends on the expecta- dysfunctions such as addiction. There is no con- tions I had formed about my future predictions. tradiction between the assumption that the de- At each moment of time, I anticipate what my cisions of the addicted person are “rational” and expected subjective values will be, and these the dysfunctionality of realized behavior. This values are discounted and summed up to arrive is precisely because the Wanting system is at my current ESV. In contrast, experienced partly autonomous and could therefore be mod- subjective value ExperSV is an abstract magni- eled according to the utility function approach if tude that relates certain quantities of a good xj those utilities refer to subjective value as being with a state of the neuronal system, that is, with different from experienced subjective value. the rates of firing of particular groups of neu- rons. This, however, is not taken as an absolute Conceptual Affinities With the Somatic value but is corrected via the reference to a Marker Hypothesis baseline value b which is a reference point, such as in prospect theory. This importance of con- I summarize this complex discussion in the text is further highlighted when recognizing the following conclusion. The dual selves model state of the organism (e.g., the degree of actual which distinguishes between Acting Self and vitamin deficiency relative to the situation of Object Self can be justified on principled infor- eating apples). The ESV then results from the mation theoretic grounds. It is the most simple difference between the SV which had been pre- axiomatic alternative to unified models such as dicted and the SV which was experienced. This the economic concept of a utility function. prediction of SV involves the prediction of fu- Other versions of dual selves models can be ture reward prediction errors, which in turn re- subsumed under this most general model. This late to expectations of future expected values. is especially true for all models that distinguish Glimcher recognizes that experienced subjec- between different modes of choice, such as tive value is determined in brain areas different “planning” versus “doing,” “planning” versus to those of expected subjective value. The same “habits,” or “conscious processes” versus “au- applies to general subjective value, which also tomatic processes” (Camerer et al., 2005; Re- implies a neuroanatomical differentiation be- dish et al., 2008; Thaler & Shefrin, 1981). These tween a decision-making system and an evalu- can be seen as further specifications of the Act- ative system, thus suggesting a molar-level dual ing Self and hence elements of a more compli- selves approach. This is obvious if we consider cated modular theory. At the same time, the malfunctioning, which can be most simply de- model can integrate very general theories about fined as systematic errors in the prediction of choice which also present serious (though con- future states of the organism. In Glimcher’s troversial) alternatives to integrationist and re- model, this is possible, as the predicted values ductionist approaches to neuroeconomics. TOWARDS AN EXTERNALIST NEUROECONOMICS 45

This holds especially true for the somatic the direct physical effect and the effect medi- marker hypothesis (Damasio, 1995; Bechara & ated through a sign. This duality results from Damasio, 2005), which also encompasses more the fact that living systems have an internal specific neuroeconomic models of reward and an- information structure in which the physical in- ticipation (Reimann & Bechara, 2010). In this teraction is categorized according to certain cri- approach, the dual selves model emerges as a teria which have evolved through natural selec- distinction between brain states and bodily states, tion in the past. The physical interaction is such that the Acting Self/Object Self distinction at interpreted in a particular way. Both the direct least partly converges with the brain/body distinc- physical effect and the interpretation causally tion. Somatic markers are bodily states that repre- interact in generating the response of a living sent valuations of events based on past experi- system, which in turn is subject to selective ences, whereas the process of choice can be mod- forces in the environment. To take a standard eled in terms of, for example, the now standard example, a frog’s eye receives photons that model of reward prediction errors (Bechara & manifest a particular pattern, and this pattern is Damasio, 2005). To emphasize this again, the dual interpreted as a “fly,” triggering the response to selves model does not take any empirical specifi- catch it. The pattern as such may be that of a cation of functional differentiation of brain struc- dark, small and moving object. This pattern is ture as a given. Thus, if the somatic marker hy- the sign of the object. The object itself is a pothesis distinguishes between two different loops physical composition of chemical substrates, of valuation (i.e., the “body loop” and the “as if some of which are nutrients relative to the frog body loop”), this is exactly what can be expected, which cause certain effects once digested. Ob- as the Object Self function can be manifested in viously, the sign is not identical to these phys- structures as different as certain bodily states ical facts. and/or certain states of parts of the brain. Via these loops, the entire decision-making process can also Peirce’s Semiotic Triad, Naturalized achieve consistent states via higher-order coordi- nation mechanisms, in particular the emotions. In this general characterization, I present a Evolved emotions as anchors for choice and be- special version of biosemiotics which is strictly havior are also seen as integrating forces in evo- naturalistic. In this it is compatible with teleose- lutionary psychology, which at the same time em- mantics and related positions in the philosophy phasizes the modularity of the brain (Tooby & of mind. I also strictly follow Peirce’s theory of Cosmides, 2005). signs which proceeds from a fundamental dis- Having established the dual selves approach as tinction between an object, a sign, and an inter- one of the two cornerstones of my externalist pretant, mainly following two recent contribu- approach to neuroeconomics, I now turn to biose- tions on Peirce: Stone (2007) and Robinson and miotics. The connection between the two emerges Southgate (2010). This approach interprets from the observation that the Acting Self essen- meaning as reflecting evolved functions (on the tially relies on representations, that is, signs, to discussion in semiotics, see Emmeche, 2002; implement choices and decisions. Interestingly, Herrmann-Pillath, 2010; Vehkavaara, 2002). this view is already presaged in somatic marker Functions refer to both the internal mechanisms theory, but this approach locates markers exclu- that underly the effects of signs on an organism sively within the brain-body system and so re- and the external embeddedness of the sign use mains internalist. In the biosemiotic view, the in- in the larger evolutionary context. Insofar as ternal signs qua markers would be essentially con- functions emerge from an evolutionary process, nected with external signs, thus relating somatic the naturalistic biosemiotics approach is strictly markets with evolved functions. externalist. This is especially important when consider- III. Biosemiotics: The “Bare Bones” Model ing human agents for which mental categories are often taken for granted and to represent The fundamental idea in biosemiotics is that purely internal facts. So, for example, ϽsnakeϾ in all living systems the response by a system to is a complex of perceptual patterns with snake- a physical interaction with the environment is like shapes that establishes a sign which has determined by two causal processes. These are direct effects on an organism that is confronted 46 HERRMANN-PILLATH with the sign and establishes a connection with is twofold, direct, and intermediated via the the designated object or physical entity SNAKE sign. The SNAKE as a physical object is the (fear, arousal, tendency to flee etc.). These are source of a physical impact on the receptors of internal causal mechanisms. Yet, the meaning the eyes. But this is not sufficient to establish of ϽsnakeϾ cannot be just reduced to those the presence of a “snake” in cognitive terms, internal mechanisms, because the sign has com- because there are many things that may evoke plex and fuzzy boundaries, so that its meaning similar physical effects on the eyes. Therefore, and function can only be explained in the larger the reaction by the organism is mediated via the evolutionary context. This context refers to the sign ϽsnakeϾ, which is actually a rule based phylogenetic and cultural processes that drove definition of what physical impact will count as the emergence of both the sign and the corre- a “snake” cognitively as it refers to a SNAKE in sponding neuronal responses. Thus, meaning is the physical environment. This difference is completely reduced to function, both in the central for the possibility of dysfunctions, or, in sense of meaning evolving out of selection teleosemantic terms, misrepresentations. There- (modeled e.g., in terms of evolutionary game fore, the relation between sign and object is a theory, as in Skyrms, 2004, 2010) and in the relation of inference. Semiosis enables the or- sense of meaning supervening on functions ganism to infer certain properties about an ob- (Adams & Aizawa, 2010; Macdonald & Pap- ject which allow it to recognize the object as a ineau, 2006; Millikan, 1998). SNAKE through perceiving ϽsnakeϾ. So, In a first approximation we can describe the semiosis is an information generating and pro- naturalistic Peircian framework as in Figure cessing phenomenon (labeled inference in Fig- 1(a), which builds on similar diagrammatic ex- ure 1a). positions in the semiotics literature (e.g., Brier, The information-generating role of signs 2008). I emphasize that this is a conceptual or emerges from the fact that semiosis is subject to metatheoretical model, and does not present any selection in the evolutionary context. Selection specific hypotheses relevant when analyzing the impacts the final element of the triad, the inter- different pairs of interactions within the semi- pretant. The interpretant is the element which is otic triad. Semiosis is triadic in the sense that the vehicle of the inference process. It is abso- the relationship between object and interpretant lutely essential to recognize that this is not a

Figure 1. Basic structure of semiosis. TOWARDS AN EXTERNALIST NEUROECONOMICS 47 mental entity that gives meaning to the sign, but the reaction of a certain entity, such as the organism, to the sign. So, Stone (2007) calls the interpretant a “response” R. The response to perceiving ϽsnakeϾ is to flee. This implies that the information is actually carried in the re- sponse in the sense that the response reflects those properties of SNAKES that determined the evolution of the sign ϽsnakeϾ, that is, snakes might be dangerous to survival. Both the interpretant and the sign have evolved under natural selection, that is, we can speak of a coevolution of the two sides of the semiotic triad. The information content of the response Figure 2. The extended semiotic triad. consists in the realization of a function, in our example, to ensure survival. This general structure of semiosis can be analyzed in more detail by introducing the idea The inner triad O-Q-R is the physical chain of a “system of interpretance” (Salthe, 2009; that undergirds the semiotic relation, such as the Figure 1b). This refers to the hierarchical order- physical impact of an object on the eyes and the ing of functions. The relationship between flight subsequent chain of neurophysiological effects. and survival is essentially generic. There are This relationship is accompanied by the sign many intermediate functions which relate to the relation O-X, also physical, as the sign is caused complex structure of an organism, including the by the object. However, this second relationship ecological context. So there is a chain of re- can be complex. This underlies Peirce’s fully sponses R, RЈ,RЉ and so forth, which are part of fledged theory of signs which I do not wish to such a system. The important point that results consider in this paper. For example, the relation from this perspective is that semiosis has the can be directly caused, such as when fire causes property of multiple realizability. This means, smoke (an index), or it can be arbitrary, as in the the same generic function can be realized in case when a sign is a symbol. However, even in different forms. For example, one can be flight, the latter case, the sign remains a physical phe- or another stamping on the snake. Robinson and nomenon. This discussion shows, however, that Southgate (2010), following Stone (2007), the sign relation, though a physical one, differs therefore introduce the distinction between the fundamentally from the physical relation O-Q-R response R and the purpose P, with the latter because strictly speaking, the underlying causal being the generic aspect under which selection process moves in the opposite direction. This is takes place, in the sense of selecting for (fulfill- easy to see when we ask the question why the ing a purpose, as opposed to selection of the sign is an effect of the object (Stone, 2007). A traits that fulfill the purpose). full answer must refer to the entire semiotic process, claiming that it has been assigned to The Complete Biosemiotic Model the object via an evolutionary process. In con- trast, the relation O-Q-R is not directly depen- Further following Robinson and Southgate, dent on the evolutionary process: A SNAKE we can now proceed to draw a more detailed will impact the receptor’s eye regardless of picture of the semiotic triad, which is central for whether it is seen as a “snake” via the interme- establishing the relationship to neuroeconomics diation of ϽsnakeϾ. (see Figure 2). This makes the distinction be- The relation X-R is also physical of course, as tween the semiotic mode and the physical mode the perception of the sign is a physical process. more explicit. Using the notation in Robinson This is not shown here using a continuous line and Southgate (2010), but modifying and ex- because this relation is conceptually dominated tending their model, I introduce a twofold triad by the inference process. These are indicated by (see Herrmann-Pillath and Salthe, 2011; see the broken arrows, also showing the inverse Figure 2). causality. The sign reveals information about an 48 HERRMANN-PILLATH object, such as when perceiving ϽsnakeϾ re- responses triggered by the evolving informa- veals that an object is a SNAKE. It is precisely tion. for this capacity that selection has resulted in The Object Self then corresponds to the re- the emergence of the sign. We can then say that sponse R in the semiotic approach in so far as it the semiotic relation O-X-R supervenes on the is the instance of the evaluation (i.e., interpre- physical relation O-Q-R. tation) of the outcome of an action, as response This brief summary of the biosemiotic ap- R, that has been generated by a physical chain proach suffices at this place. My aim is to show of causation Q which connects external world now that the duality of the physical and the and outcome. Other than the standard economic semiotic causal channels directly reflects the approach, this implies that the interpretation, analytical distinction between molecural and that is, response R, relates to a general purpose, molar levels of analysis in neuroeconomics. In that is, a function that was selected for multi- doing this, I argue that this is not merely a level evolutionary process in the past. Therefore methodological distinction, but reflects some considering current economic research, this part fundamental properties of neuronal systems, of the picture can be grasped by evolutionary seen as products of an evolutionary process. approaches to preferences (as proposed e.g., by Robson & Samuelson, 2010; for consumer the- ory, see Saad, 2007). However, in the dual IV. Semiosis in Dual Selves selves model these preferences do not direct choices. Choices work via the semiotic interme- I distinguish between the organism as a phys- diation, which relates to the Acting Self. This ical entity and the interface with the physical fits the general characterization of the Acting environment on the one hand, and the duality of Self being a cognitive agency which operates on Object Self and Acting Self on the other. The the basis of representations of the external and central conceptual link between the two results internal world, that is, signs. We can, therefore, from the focus on the generating and processing locate the dual selves approach in the triadic of information. Semiosis is an inferential pro- framework of semiosis (see Figure 3). cess and for that reason complements the dual The relation between the Acting Self and the selves structure as this features essential incom- Object Self is mediated via the semiotic cate- pleteness of information, in particular that in- gorization of physical chains Q that link organ- ternal to the physical boundaries of the brain. isms and evaluations. For example, the organ- This is the distributed cognition perspective: ism is in need of nutrients, and the Object Self Externalized cognitive mechanisms are essen- evaluates certain intakes according to certain tial to brain functioning because of the neces- criteria, such as the most simple, distinguishing sary incompleteness of internal mechanisms. between hunger and satiation. However, the se- In the notion of the interface, external world lection of those actions that lead to food intake and organism are conflated in the sense that there are no other sources of information about the external world apart from sensory data. This has the important implication for economics and the theory of consumer choice that a good is always a set of sensory inputs and cannot be naively equated with the physical entity (which, however, fits into the long-standing Lancaste- rian tradition of modeling goods in certain eco- nomic models). At the interface, information is generated about that physical entity. Therefore, in the triadic diagrams we show two broken arrows leading back toward the object, and rep- resenting the information-generating dynamics of the evolutionary process. This information is not representational, however, but relative to the ultimate criteria of selection which drive the Figure 3. Object self and acting self in the semiotic triad. TOWARDS AN EXTERNALIST NEUROECONOMICS 49 works via the Acting Self. The Acting Self text. Therefore, even though we might locate ex- categorizes the different action patterns accord- periences in the individual, in fact what is behind ing to their semiotic intermediation. This im- them is an evolved pattern of internalized func- plies that the relation between Acting Self and tions in a larger context. This viewpoint has been Object Self is open and indeterminate. For ex- elaborated on, both in the context of general evo- ample, choice among food items follows indi- lutionary theory and in the theory of consumer rect features such as color or taste. These do not behavior. In other words, the preferences of the directly reflect nutrition values. In fact, the Act- Object Self are not simply irreducibly subjective ing Self is ignorant about the physical causality but relate to evolved functionings of the individ- between food intake and states of the Object ual, themselves objective in terms of a possible Self. These chains are actually the object of evolutionary analysis. This refers to both the bio- biological and medicinal inquiry, knowledge of logical and the cultural or societal level (as out- both of which is still fallible today. This picture lined e.g., by Jablonka & Lamb, 2006). Thus, both corresponds to recent approaches in neuroeco- the Acting and the Object Self operate on the basis nomics which argue that preferences are con- of information that is “environmental informa- structed via consumption activities and inte- tion” in the sense of information theory, that is, grate environmental factors via memory (Ariely that does not relate to meanings involving the & Norton, 2007). In this case, the Acting Self intentions of senders and receivers (Floridi, 2003; learns from the observed functionings of the Aunger, 2002; Skyrms, 2010). Both signs and Object Self in terms of their external embed- evolved responses are population-level phenom- dedness. In short, preferences are the actions ena and hence external to the individual, though qua responses R, which are constructed by the essentially relying on neuronal mechanisms Acting Self by means of semiotically interme- (which are physically “internal” to the body/ diated proprioperceptions. This is the externalist environment interface) for their actualization. neuroeconomic complement to the notion of We have now all the essential analytical tools revealed preferences in the standard economic at hand to discuss the question of how far neu- approach: There is no such thing as a mental roeconomic externalism is more powerful than state that is a “preference.” neuroeconomic internalism for exploring the re- This analysis has far-reaching consequences lation between molar and molecural processes, for the conceptualization of human choice. On that is, theoretically enriched observations the one hand, the dual selves approach started about observed behavior, such as behavioral out from stating an internal information asym- data, and the underlying neuronal mechanisms. metry in the brain. I have shown that this inter- Consumption disorders are the acid test, as they nal asymmetry directly matches the triadic anal- are the most important falsifiers of the standard ysis of semiosis. What, however, does this economic model which would need to be ac- imply about the nature of the information that is counted for by any attempt at a neuroscience processed by the brain? reduction. I will begin with a methodological First, the Acting Self reflects the semiotic case study of one influential article in econom- level as it is a decision making module that ics, Laibson (2002). processes signs. Although this also involves sign processing internal to the brain, the most V. Merging Neuroeconomics and Semiotics important signs are external to the brain. In the in the Analysis of Consumption Disorders: context of human societies, many signs are cul- The Example of Smoking turally determined and transmitted. In this sense, the Acting Self is a public entity as it I am going to present a semiotic reconstruc- operates on the basis of population level sign tion of what Laibson (2001) has proposed as processes (this is reflected in the strong impact a “cue theory of consumption” in the context of social interactions on individual agency, of of economics, which builds on a long tradi- which, however, the human agent is to a large tion in psychological research, and takes up degree not aware, see Oullier & Kelso, 2009; important aspects of existing psychological Wegner & Sparrow, 2007). Second, the Object and neuroscientific approaches to addiction. I Self is by no means a purely internal phenom- have chosen the Laibson model as a case enon, but relates to functions in the larger con- study because it maintains the formal charac- 50 HERRMANN-PILLATH teristics of the standard economic model as cludes proprioperceptive cues, such as the closely as possible and so clearly fits in with scratch of the smoke in the throat (West, the formal structure of Glimcher’s approach. 2006). Thus, if the different properties of the On the other hand, the notion of “cues” di- cue of the cigarette are changed, the marginal rectly connects with the semiotic approach, as utility of smoking will change, too. So, bio- cues are signs. I, therefore, take the economic logically, cues relate with Pavlovian rein- model proposed by Laibson, which on first forcement mechanisms which change the in- sight seems to integrate easily with Glimch- dividual’s dispositions to react to a stimulus, er’s approach, as a point of departure for both in the sense of preparing the organism developing a strictly externalist approach to and also in that of compensating for negative choice, which stands in opposition to reduc- effects. tionist neuro-internalism. The Laibson model grasps these effects by introducing a metautility function which in- Cues and choice: The Economic View cludes the cue-based physiological mechanisms seen as biologically determined. The standard Laibson has presented an extension and mod- utility function is thus embedded into this meta- ification of the original Beckerian approach to function in the sense that the actual choices of habit-formation, including the so-called theory the individual become dependent on the history of rational addiction (Becker & Murphy, 1988; of consumption experience. These have evolved for related theories, see, e.g., Bernheim & Ran- as a result of certain patterns of cues and cor- gel, 2004). The central idea is that environmen- related behaviors, and are, therefore, contingent tal cues elicit changes in the preferences of on the environment (this establishes a relation individuals, thus inducing shifts in the marginal with the human capital approach to consump- utilities of consumption. This happens because tion developed by Becker, 1996). An important cues activate memories of past consumption. consequence of this model is that individuals Our example will be smoking, so, for example, who are aware of the role of cues in eliciting perceiving a box of cigarettes activates a strong behavior will possibly be willing to manage desire to smoke, because the cue moves the cues directly in order to influence their own schedule of expected marginal utility as well as behavior. So, for example, a smoker might the actual marginal utility of lighting the ciga- avoid pubs if he intends to quit smoking, in rette. This cue-theory of smoking corresponds order to avoid the leveraged cravings which to a long series of results in neuroscientific would also cause greater pain of nonsmoking. research which have highlighted the role of This also implies that cues without subsequent environmental factors in driving smoking be- consumption are hedonically aversive. The the- havior as compared to the purely pharmacolog- ory can also explain the phenomena which are ical factors (e.g., Caggiula et al., 2002; Hughes, normally associated with hyperbolic time pref- 1989; Le Folla and Goldberg, 2005; Reid, Ho, erences, that is, a heightened preference for & Berger, 1996). present consumption. If, in the present, a cue What is a cue? First, a cue is a sensory impacts on choices, momentous marginal utility input. But this sensory input is different from is leveraged, whereas the anticipated utility of the sensory input that actually creates the future consumption streams is only based on utility of a particular good and activity. There cue-less evaluations, since the cues must be is a spectrum of possibilities here, ranging physically present in order to operate. A final from arbitrary environmental items to the core insight of the cues-theory is that consump- physical embodiment of the respective good. tion is a public activity, because observed con- So, for example, if somebody mostly smokes sumption of others is a cue itself, so that public in a pub, her craving for nicotine will differ consumption generates positive externalities in depending on whether she is in a pub envi- other individuals, whose marginal utilities are ronment or a gym. Moreover, and most inter- increased by the cues. Smoking in companion- estingly for our discussion, the cigarette itself ship increases its pleasures (on the impact of is a cue. This differs from the physiological observed smoking, even imaginary as in mov- chain connecting the activity of smoking with ies, on smoking behavior, see Wagner et al., nicotine infusion into the organism. This in- 2011). TOWARDS AN EXTERNALIST NEUROECONOMICS 51

original object, the CIGARETTE, triggers two different causal chains that coevolved during the process of habit formation. This process can be analyzed as resulting from an evolutionary dynamics on different levels, with the central ones being the long term selection of the underlying biological mech- anisms, the medium term of the cultural evo- lution of artifacts and the short term of indi- vidual habit formation (on the applicability of the fundamental selection model on different levels, including individual reinforcement learning, see Hull, Langman, & Glenn, 2001; Mesoudi, Whiten, & Laland, 2006). In terms of the semiotic triad, we can further Figure 4. The biosemiotic view on cues in smoking. analyze this process. The CIGARETTE is actu- ally a set of sensory data, including those both consciously perceived (such as the touch on the Cues and Choice: The Biosemiotic View lips) and those unconscious (such as the inha- lation into the lungs). In this sense, one could Laibson’s theory is a clear-cut example of a even say that the physical object CIGARETTE semiotic process as outlined in the previous perceived as such directly relates to the sign sections (see Figure 4). Cues are signs. Put- ϽcigaretteϾ, and the object disintegrates into a ting the smoking example into the triadic large set of sensory data when actually put into framework, we immediately recognize that use. These data are semiotically reconfigured as the cue qua sign mediates the O-X-R causal “cigarette.” In Laibson’s framework, emphasis chain and thereby affects the functioning that is on the equilibrium states. Dynamically, the is active in the direct chain O-Q-R (which is, central process is governed by the coevolution economically, the schedule of marginal util- between the O-Q-R and the O-X-R chain. This is ity, in the views of other disciplines, neuro- reflected in the semiotic fields of the notion of a pharmacological causality). The latter chain ϽcigaretteϾ, that is, the shape, color, size, and refers to the neurophysiological effects of so forth of what counts as a cigarette in a nicotine in the body, causally triggered by the particular cultural setting and for a particular CIGARETTE, the former chain relates to the smoker. This relationship can be broken down sign of the CIGARETTE, the ϽcigaretteϾ, to the brand level and hence also applies to the and what smokers smoke, are “cigarettes.” analysis of advertisements and individual con- Therefore, smoking has to be analyzed into sumption profiles. Dynamically this is also a two different processes, one is the inhalation learning process in which selection establishes of smoke, and the other is the perception of increasingly sophisticated consumption patterns the cigarette—a sign. Both processes con- through individual learning. The semiotic ap- verge in the neurophysiological responses of proach allows assigning a systematic place to all the smoker, that is, the response which is the these processes. They are the standard topics in level of satisfaction generated by the activity psychology, consumer research and cultural of smoking. The “cigarette,” relative to the studies, with different levels of generality, rang- Object Self, is not simply the physical object ing from individual idiosyncrasies to larger cul- with a certain amount of nicotine. The sign tural patterns. All of this relates to the level of changes the response R of the individual to the Acting Self, which actually deals with the the nicotine infusion by changing the degree signs in order to achieve certain states of the of satisfaction, as compared to physically Object Self. similar infusions of nicotine without activa- The basis for all of this is the neurophysiol- tion of the sign (West, 2006). Hence, Laib- ogy of nicotine effects in the organism which is son’s notion of changing marginal utilities the physical foundation for the semiosis of actually refers to an interpretive process. The smoking. However, as has been demonstrated in 52 HERRMANN-PILLATH the empirical data as reported by Laibson, this is the standard economic model with externalist not sufficient to describe the response R. Even if neuroeconomics. At the same time, what is a the Acting Self were perfectly informed about strong falsifier to the standard economic model, the neurophysiology, it would not be able to turns into a confirmative exercise in applied track optimal behavior in terms of states of the biosemiotics. Object Self. These states depend essentially on the environment in which the action takes place. VI. Generalizing the Externalist Argument: The Acting Self operates on the basis of the A Semiotic Framework for Hypotheses on semiotic representation of the environment. Consumption Disorders and Addiction Correspondingly, the states of satisfaction at- tained by the Object Self are themselves semi- Eating Signs: Biosemiotic Analysis of otically determined, which, however, reverts to Consumption Disorders a past emergence of functions related to the activity of smoking. These functions also go In most contemporary developed countries, beyond the mere neuropharmacological effects smoking is generally considered as a dysfunc- in that they include broader contexts of the tion, independent of its extent. Eating as such activity of smoking, such as its role in social certainly cannot be counted as a dysfunction, communication. only eating disorders can be. This means that The semiotic analysis makes plausible why in food consumption is another excellent example the explanation of smoking behavior there is no for a generalization of the analysis above. Re- clear-cut relationship between the psychophar- cently, economists have devoted substantial ef- macological properties of nicotine and smoking, forts to understanding eating behavior, not only even when single individuals, who might because obesity is a major dysfunction in mod- change their behavior over time, are taken as ern societies, but also because the mere avail- one unit. There is no unique mapping between ability of information about appropriate nutri- the molar and the molecular level, hence no way tion does not help to solve the problem (Downs, to fully reduce the former to the latter. The Loewenstein, & Wisdom, 2009). Instead, there observed response R, smoking, is determined by is increasing evidence that engineering the cues the complex interaction between neuropharma- that guide eating behavior is a more successful cological factors, their semiotic categorization, strategy. This has recently been dubbed “nudg- the individual information processing resulting ing” (Thaler & Sunstein, 2009; compare from semiotically intermediated inferences and Wansink, Just, & Payne, 2009). I claim that the functional embeddedness of the response. “nudging” lends itself easily to a semiotic anal- Given the complexity of this system, there are a ysis. great many possible developmental pathways The analysis of eating behavior also allows which can be triggered even by very minor for more direct reference to the brain structures events (West, 2006). behind consumer choice. Food consumption is a To summarize, I argue that the Laibson multilevel process that involves many different model, which is a strictly economic model kinds of organismic activities, reaching from based on (almost) standard utility theory, in fact closer-loop metabolic circuits to highest-level stands at a crossroads from which either neuro- conscious choices. It is also a most fundamental internalist reductionism or the externalist ap- human need, so there would be good reason to proach of biosemiotics could be reached. In the expect that, over the course of evolution, infor- former case, the notion of utility would be ren- mation processing about food consumption dered in internalist terms, thus contradicting the would have been optimized. However, precisely externalism of the standard revealed preference the split between Acting Self and Object Self approach to utility, which seems to result in a can be seen as the precondition for the high serious contradiction. In the next section, I show degree of phenotypic flexibility and hence, in- that the more general and highly diverse ap- creased adaptive performance in varying human proaches to consumption disorders and addic- environments. In this sense, growing internal tion in different fields of psychology and cog- information deficits simply reflect the increas- nitive sciences clearly justify the biosemiotic ing advantages of phenotypic flexibility (cf. view. Only this view matches the externalism of Richerson & Boyd, 2005). As a result, individ- TOWARDS AN EXTERNALIST NEUROECONOMICS 53 ual learning also plays an essential role in the integrated approach, which projects into the ontogenesis of eating habits. economic notion of utility, the distinction be- The basic brain structure that underpins eat- tween different standards of evaluation does not ing behavior reflects the dualism between the matter because in the end the nutritional effects Wanting and the Liking systems, as surveyed by and the effects resulting from aesthetics are both Berridge (2009) (see also e.g., Finlayson, Hal- rewards in terms of utilities. In the semiotic ford, King, & Blundell, 2010). On the one hand, framework, actual behavior results from the food consumption is regulated by general ho- confluence of different causal forces, with the meostatic mechanisms which indicate a state of Acting Self operating partly independently from well-being that results from food intake, such as the evaluations of the Object Self as a result of satiation. There are special circuits for indicat- the underlying fundamental information asym- ing satiation and others for the hedonic re- metries. The underlying dopaminergic circuits sponse. This Liking system differs fundamen- can then become partly decoupled from the tally from the Wanting system which treats food signaling of the homeostatic mechanisms, and as one item in the generalized set of rewards and hence an independent source of satisfaction. In which focuses on the mesolimbic dopamine cir- this perspective, eating behavior is partly trans- cuits. The two systems interact twofold. One is formed into the pure consumption of signs, that the Wanting system is a separate source of underpinned by a peculiar selection of mecha- rewards, as the perception of cues that indicate nisms Q. Indeed, eating disorders are an excel- and accompany food raises the dopamine level. lent example of this distinction between the The other is that the Wanting system may consumption of signs of goods as compared to change the sensitivity of the Liking system. the consumption of goods. Compulsory eating This can be basically conceived as a Pavlovian of sweets does not result in the fulfillment of mechanism of reinforcement learning, such that nutritional functions, but can even end up in certain cues of food availability become the organismic dysfunctions, and in many cases main drivers of the actual behavior. also in less perceived well-being. So it can In the case of food, the role of cues is most involve a stark contrast between experience and obvious from the role of visual and other addi- decision utility, as frequently the individual tional sensory indicators such as taste accompa- feels very bad after the action and even tries to nying food consumption (compare Simmons, restore the original state by compulsive action Martin, & Barsalou, 2005). Thus, a dish that looks such as vomiting. In this way, the choices of the delicious can be a source of a double reward Acting Self are virtually decoupled from the obtained from eating. First, the food intake acti- Object Self. This implies the distinction be- vates the homeostatic mechanisms that signal tween the “good” and the “sign of the good.” In well-being (the O-Q-R channel in the semiotic the compulsory eating of sweets, the individual triad), but second, the Wanting system may be actually consumes the signs of goods, the especially activated by the sensory aspects of the ϽsweetsϾ, and the accompanying temporary food as these trigger an independent dopaminergic feeling of satisfaction results from the activation response and hence reward. The reward in turn of the underlying dopaminergic circuits. The might change the homeostatic mechanism (the SWEETS, however, damage the organism, and semiotically intermediated categorization of the lead even to perceived dissatisfaction on the O-Q-R channel). So, eating delicious-looking food part of the Object Self. may result in eating more than is required just for This analysis corresponds to related applica- satiation from the perspective of the Object Self. tions of the model of dopaminergic circuits Interestingly, there is also an independent effect of which are triggered by cues of reward. For the signs on actualized eating behavior. Imagining example, in gambling, the feeling of pleasure is eating food later reduces the actual quantity con- caused by the fact that in most gambles, the sumed, presumably because the habituation to the impression is very often created that a player sign input simultaneously changes the sensitivity has only just missed the target by a small devi- to the object input (Morewedge, Huh, & ation (for a recent survey of research on gam- Vosgerau, 2010). bling, see Clark, 2010). This small deviation is The testing ground for this dual selves ap- a cue that indicates rewards. This reinforces the proach are the dysfunctions of the system. In the gambling activity, possibly to a degree that the 54 HERRMANN-PILLATH constant pursuit of a target which is actually most Western Europeans. Eating behavior is mostly missed creates an independent source of based on customary behavior, the basis of satisfaction resulting from the increased levels which is partly externalized in the material en- of dopamine. In other, almost paradoxical vironment. The environment is actually a com- words, a gambling addict does not enjoy the plex repository of implicit information that guides gains, but the recurrent small deviations from consumer choice. For example, Sobal and gains. The Acting Self relentlessly pursues the Wansink (2007) have presented a detailed analysis signs of gains, but the Object Self suffers ever of eating microenvironments, labeled “Kitchen- increasing losses. This analysis matches with scapes,” “Tablescapes,” “Platescapes,” and the claim made by Ross et al. (2008) that gam- “Foodscapes” which guide eating behavior. Cul- bling is the prototypical case of addiction, as it tural conditioning of eating does not mean that does not involve any direct psychopharmaco- individuals have internalized values of prefer- logical causalities, but only dysfunctions in in- ences, but is in fact a coevolution of environmen- formation processing. Indeed, there are good rea- tal features and a generalized reward processing sons to speculate that the semiotic duality of mechanism in a dual-selves structure. causal pathways may relate with the interaction between dopaminergic circuits and glutamate pro- Locating Hypotheses About Addiction in cessing circuits, as the latter sensitize the brain to the Biosemiotic Framework certain sensory inputs which are predictors of re- wards, that is, signs in my parlance (Ross et al., As an effort to systematize the previous con- 2008). This interaction is generic and independent siderations, I propose a generalization of my from specific neuropharmacological determinants argument, based on two comprehensive surveys of addiction to certain substances. of addiction research (Redish et al., 2008; West, The semiotic approach also makes plausible 2006). The theory of addiction is a workhorse why there are fuzzy boundaries between con- for dual selves approaches, and it achieves a sumption idiosyncrasies (such as collector’s central role in the theory of consumer choice if manias), consumption disorders and addiction. we consider the fact that, in recent theorizing Ascoli and McCabe (2006) argue that all scarce about addiction, the most comprehensive ap- goods can become the object of addiction in this proaches combine different kinds of mecha- sense, given the necessarily strong involvement nisms and the different levels on which those of dopaminergic circuits in aiming at obtaining work. Basically, as in West (2006), those theo- scarce goods. Lea and Webley (2006) distin- ries relate certain inputs (drugs and drug-related guish between pharmacological and perceptual sensory inputs) with certain behavioral outputs. drugs, with the latter including gambling or The inputs are processed on different levels of pornography, but even also money, under cer- complexity, ranging from automatic responses tain circumstances. Although this extension of such as impulses through motives to evaluations the notion of addiction does not represent ma- and plans. For these, certain background forces jority opinion in the pertinent literature, the are essential which relate to generic drives and rationale of these arguments lies, in my analy- emotional states. These models also include sis, in the complex interaction between the two mechanisms of self-control which link up with triadic channels. Depending on their complex concepts of identity in social context. If we strip interaction, there is the possibility that, in indi- them down to a basic and more simplified con- vidual cases, a constellation of neurophysiolog- ceptual structure, we can distinguish between ical factors, external functionings and semiotic two fundamental aspects: intermediations emerges and this results in the • The first is the distinction between direct transformation of consumption idiosyncrasies neurophysiological causal pathways and semi- into quasi-addictive behavior. otically intermediated ones. The former in- It is important to notice that the signs them- cludes all the direct and indirect ways by which selves are not human universals. This is why we the intake of certain substances and the repeti- need fully fledged semiotic analysis to fully tion of certain actions directly change the neu- understand human eating habits. The view of rophysiological mechanisms that drive deci- chicken feet may trigger craving for food in the sion-making, similar to the way drugs change Chinese, but may appear to be repulsive for the levels of dopamine in the respective brain TOWARDS AN EXTERNALIST NEUROECONOMICS 55 modules and hence change perceived rewards, driven by the direct reward of repeating the different forms of neurotoxicity of drugs, or, action pattern as such, independently of the possibly most importantly, the opponent pro- reward resulting from the action (such as auto- cess theories (West, 2006). I also include all matically lighting the cigarette without even opponent processes that involve compulsive ac- considering the hedonic effect). On the other tions under this heading, because they result in hand, this includes all the higher-level states of truncated action sequences where the expected the Object Self which directly reflect the func- outcome of the action does not matter at all for tions relative to the environment. These include the triggering of the action (the action is the self-conceptions and even plans which are di- goal) (Redish et al., 2008). In contrast to this, rectly related to certain aspects of the environ- the semiotically intermediated pathways in- ment and in fact represent externally provided clude all the phenomena of cue-based altera- action programs (such as making a plan to stop tions of choices (such as incentive-salience gambling in order to be restored to the proper models; West, 2006), as well as all higher-level role as the head of the family). In contrast, the processes which involve the reflection of Acting Self involves all phenomena which af- choices, such as self-control based on self- fect the choice mechanism. This boils down to perceptions. The latter always involve reference the basic dopaminergic circuits, but allows for a to the symbolic representation of states and great deal of leeway either via the direct recat- actions, such as frames determining the estima- egorization of neurophysiological pathways tion of probabilities or social categories in- (such as leveraging the reward via cue-based volved in assigning identities to agents. adaptations) or via the altered cognitive repre- • The second is the distinction between Act- sentation of choices (such as changing percep- ing Self and Object Self, which partly cuts tions of future outcomes in terms of probabili- through the common conceptual divisions in ties). psychology and economics. This is because I summarize this in Figure 5. In this figure, some aspects of addictive behavior refer to the the location of the semiotic triangle in the center Object Self directly, with a continuum of rele- has an explicit meaning in the sense that the vant phenomena. On the one hand, we have all different parts of the triadic diagram are located the forms of automaticized actions which do not in the boxes of the table in which they count directly involve choice, or where choice is also most.

Figure 5. Semiotic analysis of addiction. 56 HERRMANN-PILLATH

In the upper left-hand box we find mecha- Externalist neuroeconomics puts neuronal pro- nisms in which the conjunction of an object and cesses and structures at the center of analysis. the sign directly recategorize neurophysiologi- But these mechanisms are seen as being incom- cal paths O-Q-R. An example is the changing plete in a nontrivial way, which blocks any dynamics of opponent processes during addic- attempt at full-scale reductionism. I argue that tion (West, 2006). This is the direct effect of this approach can be most generally character- physiological dependency on a drug, which re- ized as a distributed cognition or extended mind sults, for example, from the use of the drug not approach and I offer a specification of this ap- mainly to create hedonic reward, but to avoid proach in terms of biosemiotics, meaning that I the effects of withdrawal. These effects are in- regard signs as the essential medium of exter- dependent from semiotic recategorizations and, nalist causalities in producing behavior. therefore, directly work via the O-Q-R channel. Another difference between this view and the In the upper right-hand box, we find all the standard conjunction of neuroeconomics and processes which change the perceptions of ac- behavioral economics is that the standard of tions taken, such as the illusion of control phe- malfunctioning is fundamentally different. Bio- nomenon, or the simple perception of costs and semiotics involves reference to proper function- benefits. This affects the process of inferences ing in contexts of selection, whereas the current which conveys information about the object, the neuroeconomic research mostly identifies drug, to the Acting Self, such as in the case of anomalies in terms of reference to the standard incentive salience, when the cognitive system is economic model of rational decision making. geared to overemphasize cues which relate to However, the standard economic model fails to the drug. identify empirically valid criteria of malfunc- In the lower left-hand box we find all the tioning. This is demonstrated by the example of mechanisms by which the Object Self is trans- addiction, the experimentum crucis here. The formed so that the action-goal relation is sus- empirical record can be stretched to a consider- pended, that is, the action becomes the goal, able extent but the celebrated Becker and Mur- such as in habit formation. phy (1988) model ultimately fails to cover phe- Finally, in the lower right-hand box we find nomena such as the context-dependency of all the semiotically intermediated mechanisms cravings or the strong role of classical condi- which relate the Object Self to functions in a tioning in the development of addictive behav- certain social and cultural context. This includes ior. It does not address one fundamental aspect the self-categorization of individuals, activating of addiction, which is the perceived and expe- a particular semantic field related to perceptions rienced absence of choice at the moment when of social roles, or the making of plans, which the behavior is elicited. And most importantly, always build on preconceived notions of the it cannot explain the problems of recurrent re- contextual determinants of plans. lapses, which take place despite a long history of learning about the negative consequences of VII. Conclusion: Externalism and The addiction; individuals accumulate experiences Cross-Disciplinary Integration of Theories with painful withdrawals after rational choices About Human Choice to put an end to their behavior, only to relapse later again, with many repetitions (Ross et al., The gist of the argument presented so far is 2008). the claim that a proper conceptual framework On the other hand, the standard model cannot for neuroeconomic research has to be an exter- grasp the fact that behavior which is dysfunc- nalist one. As such, externalism stands in direct tional in terms of the model can be functional in contradiction to Glimcher’s (2011) model of relation to the context of actions. This raises the internalist neuroscience. However, the example fundamental question whether the concept of of addiction research clearly shows that this “anomalies,” which drives much behavioral externalist view differs substantially from pre- economics research, is valid at all. Even an viously held externalist views in psychology addiction can be functional relative to a certain and related disciplines. These focus on social context, which explains why addictive behavior and cultural factors in determining addiction can be suppressed in different environments, phenomena (e.g., Griffiths, 2008; Lende, 2008). but relapses occur frequently once the original TOWARDS AN EXTERNALIST NEUROECONOMICS 57 context is reestablished. These functionings, in derstanding of the underlying semiosis. So, the the biosemiotic approach, cannot, however, be argument presented in this article offers a syn- explained as reflecting optimal choices. 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Members of Underrepresented Groups: Reviewers for Journal Manuscripts Wanted

If you are interested in reviewing manuscripts for APA journals, the APA Publications and Communications Board would like to invite your participation. Manuscript reviewers are vital to the publications process. As a reviewer, you would gain valuable experience in publishing. The P&C Board is particularly interested in encouraging members of underrepresented groups to participate more in this process.

If you are interested in reviewing manuscripts, please write APA Journals at [email protected]. Please note the following important points:

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