Sleep Deprivation Causes More Reckless Financial Behavior

A recent study showed that when healthy people lost one night’s sleep, their approach toward risky decisions changed. A gambling task was set up with monetary values assigned to the wins and losses and participants were evaluated on their performances. When they were gambling, most sleep-deprived participants opted for gambling for a slim chance of getting large amounts of money rather than taking the same chance to reduce their losses. This was because sleep deprivation brought about a change in the activity of certain areas of the brain that are involved in this type of decision making. Comparable brain activity was recorded when persons responded to monetary gains or losses. The study also confirmed that decision-making was not affected by reduced attention span due to lack of sleep.

Many people believe that lack of adequate sleep has no adverse effect on their lives. Research shows that sleep deprivation negatively affects attention, memory and learning, resulting in a general lack of judgment. It is unclear if, and how, sleep deprivation influences the inclinations that lead to certain decisions. This study used a gambling task to analyze the effects of sleep deprivation on brain activity in areas responsible for decision-making and attitude towards wins and losses. It also separates the act of decision-making in general from the type of decision-making undertaken for a reward. After sleep deprivation, people are more inclined to make unsafe decisions, mimicking the behavior of patients that have damage in the “medial frontal” area of the brain. They lean towards high reward options, despite their low probabilities. Neuroimaging shows higher or lower activity in specific parts of the brain depending on whether monetary gain is expected, or loss is experienced.

* Twenty-nine healthy adults of average age 22.34 years participated in ten-hour sessions with neuroimaging for “rested-wakefulness” and sleep deprivation. They were tested for alertness every hour.
* The volunteers were given a list with five options (a gamble) of winning or losing certain amounts of money with varying probability. They were asked to add an amount to one of those options to either improve their gain if they won, decrease their damages if they lost, or improve their overall winning chances. This was repeated with several “gambles” for rested-wakefulness and sleep deprivation states. This was a test of decision-making without actual returns.
* The volunteers were then given similar gambles with real money incentives and losses. Their brain activity was recorded using magnetic resonance imaging (MRI).

* Volunteers with one night’s sleep deprivation were more inclined to increase their gains and they were perfectly aware of the decision they were taking. There was a distinct change in preference of the sleep deprivation patients as they opted toward taking risks to increase their gains.
* Volunteers showed lower attention spans as they took much longer to make decisions and there were frequent mental lapses.
* Rested wakefulness and sleep deprivation brains were scanned and compared for activity during various tasks. The areas that showed increase or decrease in activity were found to be distinct.
* Generally, in a person who gets a full night’s sleep, the “anterior insula” region of the brain shows an increased desire to reduce losses incurred during any kind of activity. This region also normally controls emotions that are connected to negative feelings. In sleep deprivation volunteers however, another region called the ventromedial prefrontal cortex takes over. This region showed more activity than the anterior insula region did during the same activity, and this could be linked to an increased gain-seeking behavior in the person.
* In well-rested patients, the ventromedial prefrontal cortex region is responsible for calculating the values of an object after getting feedback and learning from different parts of the brain. Sleep deprivation affects this valuation process, leading to increased risk-taking without calculating all aspects of the gamble.

Individual differences in the response to sleep deprivation need to be considered. Though there is an overall increase in risk-taking behavior upon sleep deprivation, the basic nature of the different volunteers’ cases can cause a significant variation. Studying the effect of dopamine, a neurohormone, on decision-making may increase further understanding. Sleep deprivation is known to affect levels of dopamine.

Individuals who are deprived of sleep tend to take more risks for rewards, and are less worried about possible losses. This is particularly relevant in the case of all-night gamblers and traders. Lack of sleep does not just reduce our attention span and memory; it also induces a reckless need for increased gains, affecting our judgment adversely. Sleep deprivation changes the activity profile of human brain circuits, possibly affecting levels of neurohormones too. When sleep deprived, people become more attuned to the idea of winning while caring less about their losses. Stimulants like coffee may counteract sleep deprivation, but not its effect on decision-making.

For More Information:
Sleep Deprivation Biases the Neural Mechanisms Underlying Economic Preferences
Publication Journal: The Journal of Neuroscience, March 2011
By Vinod Venkatraman; Scott A Huettel; Duke University, Durham, North Carolina

*FYI Living Lab Reports Are Summaries of the Original Research.