How people understand the actions of animate agents has been vigorously debated. This debate has centered on two hypotheses focused on anatomically distinct neural substrates: The mirror-system hypothesis proposes that the understanding of others is achieved via action simulation, and the social-network hypothesis proposes that such understanding is achieved via the integration of critical biological properties (e.g., faces, affect). In this study, we assessed the areas of the brain that were engaged when people interpreted and imagined moving shapes as animate or inanimate. Although observing and imagining the moving shapes engaged the mirror system, only activation of the social network was modulated by animacy.

We document a robust dynamic inconsistency in risky choice. Using a unique brokerage dataset and a series of experiments, we compare people's initial risk-taking plans to their subsequent decisions. Across settings, people accept risk as part of a loss-exit strategy—planning to continue taking risk after gains and stopping after losses. Actual behavior deviates from initial strategies by cutting gains early and chasing losses. More people accept risk when offered a commitment to their initial strategy. Our results help reconcile seemingly contradictory findings on risk-taking in static versus dynamic contexts. We explore implications for theory and welfare. (JEL D81, G13, G24, G41)