This chapter examines theory of mind and recalls that up to now, the human race is the only species able to predict others’ beliefs. This ability is correlated to the development of the dorsolateral part of the frontal cortex. In the thirties, British economist John Maynard Keynes found that across all financial markets, stock prices depended on the perception of market participants rather than their intrinsic value. He concluded that the best strategy for an investor is to guess what others think. To illustrate his reasoning, he chose as an example the beauty contests organized by British newspapers. Keynes proposed to standardize his approach by using a mathematical variant of the test. There is no single solution because the value depends on the level of reasoning of the majority of the group tested. Ultimately, this test confirmed that the activity of the medial prefrontal cortex was positively correlated with the level of reasoning of the subjects. This chapter then goes on to describe how the Japanese use shogi, the Japanese version of the game chess, to study the neurobiological basis of the strategic decision-making in grandmasters of the game.
The Importance of the Lateral Prefrontal Cortex for Strategic Decision Making in the Prisoner’s Dilemma
