Neuronal adaptation and optimal coding in economic decisions

During economic decisions, neurons in orbitofrontal cortex (OFC) encode the values of offered goods. Importantly, their responses adapt to the range of values available in any given context. Prima facie, range adaptation seems to provide an efficient representation. However, uncorrected adaptation in the encoding of offer values would induce arbitrary choice biases. Thus a fundamental and open question is whether range adaptation is behaviorally advantageous. Here we present a theory of optimal coding for economic decisions. In a nutshell, the representation of offer values is optimal if it ensures maximal expected payoff. In this framework, we examine the activity of offer value cells in non-human primates. We show that their firing rates are quasi-linear functions of the offered values, even when optimal tuning functions would be highly non-linear. Most importantly, we demonstrate that for linear tuning functions range adaptation maximizes the expected payoff, even if the effects of adaptation are corrected to avoid choice biases. Thus value coding in OFC is functionally rigid (linear tuning) but parametrically plastic (range adaptation with optimal gain). Importantly, the benefit of range adaptation outweighs the cost of functional rigidity. While generally suboptimal, linear tuning may facilitate transitive choices.