Working note · November 2026

The variables of human decision-making

What a human decision runs on, according to the models that predict choices well, and where each quantity lives in the brain. I wrote this while designing the body and the automatic layer of the Artificial Person, to decide what had to be a dial in code.

The brain does not store decision variables as defined, labeled quantities. There is no register in your head named "discount rate." These variables are theorists' constructs: parameters in mathematical models (reinforcement learning, Bayesian decision theory, drift-diffusion) that predict choices well and turn out to correlate with specific neural signals.

So "how is the definition stored?" has two answers. The definition lives in the model. The quantity lives in the brain as a pattern of activity, a set of synaptic strengths, or a chemical concentration that behaves the way the variable should.

"All" isn't a closed set either. Different frameworks carve things up differently, but a convergent core shows up across economics, reinforcement learning, and neuroscience. That core is what follows.

The structure: four kinds of variables, four storage media

Any decision variable belongs to one of four types:

  1. State variables: what the situation is right now.
  2. Option estimates: how good each choice looks.
  3. Global parameters: knobs that set how you decide (patience, risk tolerance, randomness).
  4. Learning signals: errors that update everything above after the outcome.

The brain has roughly four ways to hold a quantity:

Storage mediumTimescaleWhat it's good for
Synaptic weights (connection strengths)Days to lifetimeLearned values, habits, priors, the world model
Persistent neural activity (firing patterns held over seconds)Milliseconds to secondsCurrent estimates, working memory, accumulating evidence
Neuromodulator levels (dopamine, serotonin, norepinephrine, acetylcholine)Seconds to hoursGlobal parameters broadcast to the whole brain at once
Body state (hormones, glucose, heart rate, read by insula and hypothalamus)Minutes to hoursNeeds and arousal

The core logic: slow, learned knowledge is in wiring; the current computation is in activity; the settings are in chemistry; the needs are in the body. Almost every variable below maps onto this.

1. State variables: where am I and what do I need?

VariableDefinitionWhen / why it's usedStored as
Belief stateYour estimate of the current situation, including hidden parts you can't directly see ("is this a negotiation or a friendly chat?")Always. The same action has different value in different states, so values are looked up per stateActivity in orbitofrontal cortex and hippocampus, which encode a "cognitive map" of task structure
Homeostatic stateHunger, thirst, fatigue, temperature, arousalAlways, invisibly. Need multiplies value: food is worth more when hungry (alliesthesia)Body signals read by hypothalamus and insula
Active goal / task setWhat you're currently trying to accomplishWhen behavior has to be organized around an objective rather than a cuePersistent activity in lateral prefrontal cortex; fragile, which is why interruptions derail you

2. Option variables: what can I do and how good is each?

VariableDefinitionWhen / why it's usedStored as
Consideration setThe options actually represented, a tiny subset of what's possibleAlways, and the most underrated variable. You can't choose what never entered the setAttention plus memory retrieval; action possibilities in parietal and premotor cortex
AttributesThe separate features of an option (taste, health, price, status)Whenever an option has multiple dimensionsDifferent cortical areas specialize in different features
Attribute weightsHow much each feature countsEvery multi-attribute choice. Self-control is largely raising the weight on long-term attributes: in dieters who resist junk food, health gets weighted alongside tastePrefrontal modulation of how strongly each attribute feeds into value
Subjective value / utilityThe integrated "how much do I want this," on a common scaleWhenever unlike things must be comparedActivity in ventromedial prefrontal and orbitofrontal cortex plus ventral striatum
Reference pointThe zero against which outcomes count as gains or lossesAlways. Value is relative, not absoluteLearned expectations, often a running average of recent outcomes, so it drifts as you adapt
Cached action valueThe learned worth of doing action a in state s, from past experienceFamiliar situations; this is habitSynaptic strengths between cortex and striatum, tuned by dopamine
Simulated valueValue computed fresh by mentally playing out consequencesNovel, high-stakes, or changed situationsComputed on demand by prefrontal-hippocampal simulation (the hippocampus "replays" possible paths)
Pavlovian cue valueAutomatic attraction or aversion triggered by a cueWhenever cues are present, whether wanted or notAmygdala and ventral striatum; cue associations in synapses

3. Uncertainty variables: how sure am I?

Uncertainty has at least four distinct components, each processed differently.

VariableDefinitionWhen / why it's usedStored as
Risk (expected uncertainty)Known variability: you know the odds, just not the outcome. A coin flipGambles, any choice with known spreadInsula and orbitofrontal signals scaling with variance; acetylcholine is linked to known uncertainty
AmbiguityUnknown odds: you don't know the probabilities at allMost real life. People avoid ambiguity even more than risk (the Ellsberg paradox)Lateral orbitofrontal cortex and amygdala
Volatility (unexpected uncertainty)How fast the world itself is changingDetermines how much to trust the past. In a volatile world, recent data should count moreNorepinephrine is strongly implicated; it signals "the rules may have changed"
ConfidenceYour estimated probability that a choice was correctDuring or after a choice: whether to change your mind, seek more information, or bet moreComputed from evidence strength; prefrontal metacognitive areas read it out
Risk attitudePersonal parameter for how much spread hurts or helps youEvery uncertain choice. A stable trait, but shifted by state (losses, stress)A fitted parameter (utility curvature); the neural basis is distributed and not fully settled

4. Cost variables: what will this take?

VariableDefinitionWhen / why it's usedStored as
Physical effort costThe subjective price of exertionWhenever an action requires workAnterior cingulate cortex weighs effort against reward; dopamine tone sets willingness to work
Cognitive control costThe subjective price of thinking hard or overriding a habitWhenever deliberation competes with autopilot. Explains why people default to habit even when they know betterDorsal anterior cingulate evaluates whether control is worth paying for (Shenhav's "expected value of control")
Opportunity cost of timeWhat else you could be getting per unit time, roughly your average reward rateDetermines speed, vigor, and when to quit (foraging: leave the patch when it drops below average)Strong theoretical case it's carried by tonic (background) dopamine level
Loss aversion (λ)The multiplier on losses relative to gains, typically about 1.5 to 2.5Any mixed gamble or anything framed as giving something upFitted parameter; associated with amygdala and striatal asymmetries

5. Time variables: when does it pay off?

VariableDefinitionWhen / why it's usedStored as
DelayHow far in the future an outcome arrivesEvery intertemporal choicePrefrontal and hippocampal timing signals
Discount rate (k)How fast value decays with delay. Humans are hyperbolic: steep near-term, shallow long-termSaving, studying, health, procrastination. One of the best behavioral predictors of many life outcomesA trait-like fitted parameter; serotonin is linked to patience (blocking serotonin makes animals wait less)
Future vividnessHow concretely the future outcome is representedImagining the future vividly reduces discounting, because simulated outcomes get more weightHippocampal episodic simulation

6. Social variables: what about other people?

VariableDefinitionWhen / why it's usedStored as
Others' payoffs / inequity aversionWeight on fairness and others' outcomes, separate from your ownSplitting, trading, cooperating. People reject free money in the Ultimatum Game if the split is unfairInsula signals unfairness; fitted as an "envy/guilt" parameter
Others' beliefs and intentionsYour model of what others think and will doAny strategic interactionTemporoparietal junction and dorsomedial prefrontal cortex (theory of mind)
Reputation / normsHow a choice will be seen and whether it fits group rulesWhen observed, or when identity is at stakeLearned norms in semantic memory; social value integrated into the same value signal

7. Selection parameters: how do I commit?

These come mostly from drift-diffusion and reinforcement-learning models.

VariableDefinitionWhen / why it's usedStored as
Drift rateStrength of evidence per moment favoring one option, roughly the value differenceEvery choice. It sets speed and accuracyMoment-to-moment activity in parietal and prefrontal accumulators
Attention weightingExtra weight given to whichever option you're currently attendingConstantly. The option you look at gains evidence fasterGaze and attention modulating the accumulation
Decision thresholdHow much evidence before you commit; the speed-accuracy dialRaised under conflict, high stakes, or caution; lowered under time pressureBasal ganglia circuits; the subthalamic nucleus raises the threshold when options conflict
Starting bias / priorWhere accumulation starts, a head start for an expected or default optionDefaults, status quo bias, base ratesPrior expectations in synaptic weights, set into the starting activity
Inverse temperature (β)How deterministically you pick the best-valued option versus sampling othersThe exploration-exploitation tradeoffNorepinephrine implicated in shifting between exploit and explore modes; frontopolar cortex in deliberate exploration
PerseverationTendency to repeat your last choice regardless of outcomeAlways present; a pure inertia termHabit-like synaptic traces

8. Learning signals: update everything

VariableDefinitionWhen / why it's usedStored as
Reward prediction errorOutcome minus expectation: better than expected (+), worse (−), as expected (0)After every outcome. The engine of value learning. Fully expected rewards teach nothingPhasic (burst) dopamine firing, one of the best-established findings in neuroscience
State prediction error"That's not what I thought would happen," regardless of rewardUpdating the world model itselfLateral prefrontal and parietal signals
Learning rate (α)How much each error changes your estimatesSet by volatility: high in changing worlds, low in stable onesFitted parameter; modulated by norepinephrine and uncertainty signals
Eligibility trace / credit assignmentWhich past actions get credit or blame for an outcomeWhen outcomes are delayed (did the win come from the move just now or three moves ago?)Synaptic "tags" that decay over time and await the dopamine signal

9. Control variables: who's in charge?

VariableDefinitionWhen / why it's usedStored as
Controller reliabilityHow trustworthy the habit system versus the simulation system currently isArbitrates which system drives the choicePrediction-error-based reliability estimates in lateral and frontopolar prefrontal cortex
ConflictDegree to which options or systems disagreeTriggers slowing down and recruiting controlAnterior cingulate cortex
Stress / arousalGlobal state shifting the system toward fast, habitual, threat-sensitive modesUnder pressure, fatigue, threatCortisol and norepinephrine; high levels degrade prefrontal function

What ties it together

Parameters are what make people different. Two people with the same information and options choose differently because their discount rate, loss aversion, risk attitude, inverse temperature, and attribute weights differ. Personality, in decision terms, is largely a parameter set.

Parameters are partly trait, partly state. Your discount rate has a stable baseline but shifts with sleep, stress, mood, and blood sugar. That's why the same person makes different decisions at 1 a.m. than at 10 a.m.

Evidence quality varies a lot. Dopamine as prediction error is about as solid as neuroscience gets. Tonic dopamine as opportunity cost, serotonin as patience, and norepinephrine as volatility are well-supported but simplified. Many others are model fits whose neural home is a correlation, not a confirmed mechanism.