Monday, February 25, 2019

Behavioral differences between CEOs and others: The most striking results are that CEOs do not best respond to beliefs; they cooperate more, play less hawkish & thereby earn much more than the control group

Strategic decisions: behavioral differences between CEOs and others. Håkan J. Holm, Victor Nee, Sonja Opper. Experimental Economics, https://link.springer.com/article/10.1007/s10683-019-09604-3

Abstract: We study whether CEOs of private firms differ from other people with regard to their strategic decisions and beliefs about others’ strategy choices. Such differences are interesting since CEOs make decisions that are economically more relevant, because they affect not only their own utility or the well-being of household members, but the utility of many stakeholders inside and outside of the organization. They also play a central role in shaping values and norms in society. We expect differences between both groups, because CEOs are more experienced with strategic decision making than comparable people in other professional roles. Yet, due to the difficulties in recruiting this high-profile group for academic research, few studies have explored how CEOs make incentivized decisions in strategic games under strict controls and how their choices in such games differ from those made by others. Our study combines a stratified random sample of 200 CEOs of medium-sized firms with a carefully selected control group of 200 comparable people. All subjects participated in three incentivized games—Prisoner’s Dilemma, Chicken, Battle-of-the-Sexes. Beliefs were elicited for each game. We report substantial and robust differences in both behavior and beliefs between the CEOs and the control group. The most striking results are that CEOs do not best respond to beliefs; they cooperate more, play less hawkish and thereby earn much more than the control group.

Children Do Not Raise Happiness In Europe: Evidence from One Million Persons

Children, Unhappiness and Family Finances: Evidence from One Million Europeans. David G. Blanchflower, Andrew E. Clark. NBER Working Paper No. 25597, February 2019. https://www.nber.org/papers/w25597

Abstract; The common finding of a zero or negative correlation between the presence of children and parental well-being continues to generate research interest. We here consider over one million observations on Europeans from ten years of Eurobarometer surveys, and in the first instance replicate this negative finding, both in the overall data and then for most different marital statuses. Children are expensive, and controlling for financial difficulties turns almost all of our estimated child coefficients positive. We argue that financial difficulties explain the pattern of existing results by parental education and income, and country income and social support. Marital status matters. Kids do not raise happiness for singles, the divorced, separated or widowed. Last, we underline that all children are not the same, with step-children commonly having a more negative correlation than children from the current relationship.

Biological origins of rituals: Rituals have a central role throughout phylogeny, psychopathology & in human individual & collective behavior; promote environmental (social & non-social) order & stability

The biological origins of rituals: An interdisciplinary perspective. Matteo Tonna, Carlo Marchesi, Stefano Parmigiani. Neuroscience & Biobehavioral Reviews, Volume 98, March 2019, Pages 95-106. https://doi.org/10.1016/j.neubiorev.2018.12.031

Highlights
• Rituals have a central role throughout phylogeny, psychopathology as well as in human individual and collective behavior.
• Rituals tend to manifest comparable formal features and functions, suggesting underlying homologous characteristics.
• Rituals promote environmental (social and non-social) order and stability under unpredictability conditions.

Abstract: Ritual behavior is ubiquitous, marking animal motor patterns, normal and psychopathological behavior in human individuals as well as every human culture. Moreover, formal features of rituals appear to be highly conserved along phylogeny and characterized by a circular and spatio-temporal structure typical of habitual behavior with internal repetition of non-functional acts and redirection of attention to the “script” of the performance. A continuity, based on highly conserved cortico-striatal loops, can be traced from animal rituals to human individual and collective rituals with psychopathological compulsions at the crossing point. The transition from “routinization” to “ritualization” may have been promoted to deal with environmental unpredictability in non-social contexts and, through motor synchronization, to enhance intra-group cohesion and communication in social contexts.

Ultimately, ritual, following its biological constraints exerts a “homeostatic” function on the environment (social and non-social) under conditions of unpredictability.

Keywords: RitualObsessive-compulsive disorderEnvironmental predictabilityIntra-group communicationPhylogenyBasal ganglia

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Tonna M, Marchesi C, Parmigiani S, The biological origins of rituals: An interdisciplinary perspective, Neuroscience and Biobehavioral Reviews (2019), https://doi.org/10.1016/j.neubiorev.2018.12.031

Highlights:
 Rituals have a central role throughout phylogeny, psychopathology as well as in human
individual and collective behavior.
 Rituals tend to manifest comparable formal features and functions, suggesting underlying
homologous characteristics.
 Rituals promote environmental (social and non-social) order and stability under unpredictability
conditions.
Abstract
Ritual behavior is ubiquitous, marking animal motor patterns, normal and psychopathological
behavior in human individuals as well as every human culture. Moreover, formal features of rituals
appears to be highly conserved along phylogeny and characterized by a circular and spatio-temporal
structure typical of habitual behavior with internal repetition of non-functional acts and redirection of
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attention to the “script” of the performance. A continuity, based on highly conserved cortico-striatal
loops, can be traced from animal rituals to human individual and collective rituals with
psychopathological compulsions at the crossing point. The transition from “routinization” to
“ritualization” may have been promoted to deal with environmental unpredictability in non-social
contexts and, through motor synchronization, to enhance intra-group cohesion and communication in
social contexts.
Ultimately, ritual, following its biological constraints exerts a “homeostatic” function on the
environment (social and non-social) under conditions of unpredictability.
Keywords: ritual; Obsessive-Compulsive Disorder; environmental predictability; intra-group
communication; phylogeny; basal ganglia.
1. Introduction
This contribution attempts to present an explanatory framework of rituals through an interdisciplinary
approach, linking ethology, psychopathology and anthropological sciences.
The search for a phenomenological continuity of rituals across different disciplines lies on three basic
assumptions. First, rituals are ubiquitous, being found in animal behavioral patterns, as well as in
humans in everyday routines, in specific stages of the life-cycle (especially childhood, pregnancy or
motherhood) and in psychopathological conditions (i.e. Obsessive-Compulsive Disorder - OCD).
Besides, ritualistic collective behaviors mark every human culture (Boyer and Lyenard, 2006).
Second, rituals appears to be constantly fixed into some invariant and specific formal characteristics,
i.e. the internal repetition, the rigidity of the performance and the detachment from a goal-directed
behavior (Keren et al., 2010). Of course, an increasing amount of complexity may be traced along
phylogeny: from a purely automatic and stereotyped motor behavior at the one end to the integration
of affective and cognitive processes that finally become deeply embedded within cultural symbolic
meanings at the other end (Turbott, 1997).
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Third, literature from both animal models of compulsive-like behavior and compulsions in different
psychiatric conditions converge on the critical role for the basal ganglia, a highly evolutionary
conserved neural system implicated in complex and functionally distinct large-scale brain networks
(Wilkes and Lewis, 2018).
The term “ritual” has been adopted to describe different forms of repetitive behavior such as
stereotypies, fixed action patterns and habitual behavior, so that a distinction of rituals from other
forms of repetitive behavior is often not clear. Moreover, an interdisciplinary study of rituals is
lacking (Dulaney and Fiske, 1994; Turbott, 1997; Boyer and Lienard, 2006), affecting the possibility
to capture the specificity of ritual phenomenon along a phylogenetic continuum.
Therefore, the present study aims at investigating if different forms of rituals, from invertebrates and
vertebrates repetitive motor patterns to complex cultural manifestations, through human every-day
individual physiological or pathological rituals, lie on a continuum, and, if so, to grasp the ”ultimate
causations” of such apparent highly conservative behavior.
The hypothesis of the present study is that rituals may have emerged as a co-option of pre-existing
behavioral traits (i.e. an “exaptation” phenomenon): specifically, as a functional shift from habitual
behavior in order to increase environmental (both social and non-social) stability under conditions of
unpredictability. The epistemic background lies on the premise that human vulnerability to diseases
is rooted in phylogenetic constraints and that our behavior and mind are shaped by evolutionary
mechanisms deeply intertwined with brain developmental plasticity and culture (Palanza and
Parmigiani, 2016).
2. Ethology of rituals
2.1 Fixed-action patterns
From an ethological perspective, rituals are described in terms of repetition and stereotypy (Payne,
1998). In classic ethology, the term “fixed-action pattern” (FAP) refers to species-specific, stereotyped
sequence of behavior which was held to be innate (genetically pre-programmed) and relatively
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uninfluenced by learning (Immelmann and Beer, 1989). FAPs have also been found in human infant
(Eibl-Eibesfeldt, 1989). Tinbergen (1953) demonstrated that FAPs are triggered by “specific external
sign stimuli” (e.g. the red or swollen belly of a live conspecific or even a rough model triggering the
attack or courtship FAPs respectively). Once the FAP is activated, the specific behavior pattern is
fully expressed (Alcock, 1993). Actually, even in a highly stereotyped form, there is also a certain
variability with behavioral patterns showing both fixed and variable components. Accordingly, the
alternative term of “modal action pattern” (MAP) was proposed (Barrows, 1995). This inbuilt
flexibility may be observed across the full phylogenetic spectrum. Also in invertebrates, innate
behavior, far from being rigid and stereotyped, may be shaped according to environmental cues,
metabolic demands and physiological states (Brembs, 2013). The high experience-dependent
plasticity of behavior would be mediated by conserved signaling mechanisms (the cAMP/PKA/CREB
pathways, underlying the formation of long-term memory (LTM) and associative learning) from
mollusk to mammals (Cammarota et al., 2000). Besides, decision-making circuits responsible for
activating innate social behaviors share common neural substrates in both Drosophila melanogaster
and mice (Gelperin, 2017).
2.2 Habitual behavior
Habitual performance is highly stereotyped behavior that can be explained by its purpose (Eilam,
2015). Habitual behavior is normally placed into a fixed spatiotemporal structure (Eilam et al., 2006),
that permits to order and schematize animal territory into a discrete set of places, each with a specific
set of acts (Eilam et al., 2006). These places are then interconnected by fixed and regular routes
(Hediger, 1964). The tendency to reorganize the territory into rigid spatiotemporal parameters has
been observed both in vertebrates and invertebrates. It has been suggested that such behavioral
rigidity has an adaptive value, allowing faster performances and less attention (Eilam et al., 2006).
Moreover, simplifying a behavioral pattern via stereotypy, repetition and routinization permits to
focus attention to threating external stimuli (Fentress, 1976). Of course, also routine motor displays
show a certain degree of flexibility within and across individuals. Behavioral flexibility and
variability (and its potential adaptive value) are guaranteed by irrelevant or unnecessary acts that are
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embedded within the motor pattern (Eilam, 2015). From an evolutionary perspective, behavioral
variability would be an essential component in the evolution of behavioral patterns (like genetic
variability in biology). In such a case, unnecessary acts would serve to retain a certain flexibility by
irregularly interrupting the automatic performance, and thereby enabling the performer to maintain
the awareness and control that are necessary for behavioral adjustment to changing circumstances
(Keren et al., 2013). In other words, unnecessary or idiosyncratic acts prevent automated processing
with no or minimal attention (Moors and de Houwe, 2006). In so doing, the motor sequence may be
modifiable to fit the situation (Dumais, 1981) and to enable the organism to test its environment
(Brembs, 2011).
Even though the highly rigid behaviors of FAPs and habitual behavior may be phenotypically
undistinguishable, they differ in that FAPs are genetically pre-programmed whereas habitual behavior
is the result of a learning process. Both of them imply predictability of the environmental context
(social or non-social). FAPs represent phylogenetically programmed behavioral responses mediated
by brain innate releasing mechanisms (Immelmann and Beer, 1989). Natural selection (via non-social
environmental selective pressures) and sexual selection (via social environmental selective pressures)
have genetically “fixed” the highly predictable relationship between the external stimulus and
response. Conversely, in habitual behavior, the predictability of behavioral outcomes in a given
environmental context is learned. Once learned, this behavior becomes automatic and highly
functional without any further cognitive attention (Thorpe, 1958). Of course, this does not mean that
an actual dichotomy exists between innate behavior and learning. Rather, behavior varies
continuously from being almost entirely independent from learning to being highly dependent on
learning. For example, “innate” behaviors may be preceded evolutionarily by learned forms of
behavior, which are subsequently fixed into “canalized” behaviors (Tierney, 1986). The
“continuity” between innate and learning behavior has been demonstrated both in
invertebrates and vertebrates; in Aplysia for example, an automatic and rhythmic behavior
can arise from a learning-induced “rigidification” of the functional properties of decisionmaking
circuitries (Nargeot and Simmers, 2012).
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Altogether, habitual behaviors are characterized by the following specific features: 1) they are largely
learned (i.e. acquired via experience-dependent plasticity); 2) they occur repeatedly over the course of
days or years and they can become remarkably “fixed”; 3) once acquired, habitual motor task is
performed automatically, allowing attention to be focused elsewhere; 4) they tend to present a
structured action sequence elicited by a particular context or stimulus (Graybiel, 2008).
Stereotypies are qualitatively distinguished from habitual behavior based on their apparent
purposelessness and great repetitiveness. Whereas FAPs and habitual behavior are triggered in the
course of normal behavior, stereotypies are most prominent under aversive conditions (such as stress,
social isolation or sensory deprivation) (Ridley, 1994).
2.3 Rituals
Rituals are common across animal species. These behaviors share cardinal characteristics with habitual
behavior: they are repetitive, sequential action streams and they can be triggered by particular cues
(Graybiel, 2008). Indeed, routinized/habitual behavior appears to constitute the building blocks of
rituals (Eilam, 2015). The transition from “routinization” to ritualization would be marked by an
inflated performance of voluntary (i.e. non-automatic), unnecessary, non-functional acts (in addition
to the functional ones) with the result to affect the pragmatic functionality of the basic motor pattern
(Zor et al., 2009). The non-pragmatic redundancy of non-functional acts implies the loss of the
automatic execution of the act with hyper-attention to the formal structure of the behavioral pattern
(Krátký et al., 2016). Namely, the emphasis on fidelity and invariance of the performance, the rigid
adherence to the “rules” (i.e. the precise execution of the “script”) become the focus of cognitive
efforts (Boyer and Lienard, 2006) and the ultimate goal of the performance itself (regardless to its
pragmatic function). Consistently, rituals would differ from habitual behavior for their
“thoughtfulness” (Eilam et al., 2006); that is, whereas habitual behavior is performed automatically,
rituals involve a shift of attentional focus to the basic structural units (acts) of the motor performance
(the “script”) (Zor et al., 2009).
2.3.1 Environmental predictability
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It has been speculated that the redundancy of non-functional acts serves as a means to reduce anxiety
and to gain a feeling of controllability and predictability (Eilam et al., 2011). Since early ethological
observations (Lorenz, 1966), rituals have been described to be triggered whenever the
uncontrollability and unpredictability of the context increase, for example when habitual routines are
abruptly interrupted or usual paths are changed. In this perspective, Lorenz (1966) has conceived
animal rituals as a “proto-religious” behavior. Interestingly, also in invertebrates (e.g. Drosophila) the
automaticity of the performance is related to the levels of environmental predictability, i.e. with a
shift from automated habitual behavior to decision-making behavior when uncertainty increases
(Schleyer et al., 2013). The interruption of an automatic/habitual performance for adjustment to
changing circumstances has been also demonstrated in other insects. Particularly, wasps and bees
perform a series of learning flights (re-orientation flights) to re-establish a visual representation of
the nest environment when natural environment is no more predictable (e.g. when their nest has been
displaced or if they had encountered difficulties in finding the nest on their preceding return) (Stürzl
et al., 2016).
The repetition of non-functional acts (i.e. ritualization) would enhance behavioral plasticity (Eilam,
2015), necessary to face environmental unpredictability. In this regard, rituals would have evolved as
a “homeostatic” behavior, aimed to acquire information and to cope with the new environment, and
thereby re-establishing controllability and predictability (Blanchard et al., 1991). Therefore, the
phylogeny of ritual is related to unpredictability-related anxiety (Lang et al., 2015; Krátký et al.,
2016). Any time that the predictability of the environment is broken, rituals work to “re-establish” the
pre-existing order with an anxiolytic effect. This is in line with the hypothesis of rituals as a security
motivation system, evolved to handle the uncertainties of potential “disordering” threats (Szechtman
and Woody, 2004; Woody and Szechtman, 2013).
2.3.2 Intra-specific communication and group cohesion
The second well-documented force to ritualization in animal kingdom is intra-specific
communication. In this respect, FAPs are removed from their original context and incorporated into
a signalling function (Immelmann and Beer, 1989). Through exaggeration and repetition, behavior
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gets divorced from its original pragmatic goal and “exapted” for a communicative value (i.e.
ritualization phenomenon). For example, in gallinaceous birds, the evolution of the so-called pecking
courtship behavior appears to be an exaptation of feeding behavior, in that the female was originally
attracted by the possible presence of food (Stokes and Warrington Williams, 1971; Immelmann and
Beer, 1989). The redundancy and exaggeration of the movement of pecking (i.e. its ritualization)
might have evolved through female choice (intersexual selection) of males with an innate higher
tendency to repetition and magnification of the act of pecking. Ritual development occurs through
“an increase of conspicuousness by simplification and exaggeration of form, embellishment,
repetition (usually rhythmical), emphasis of particular components, slowing down or speeding up of
performance, addition of morphological support such as coloration and stereotypy” (Immelmann and
Beer, 1989). In courtship behavior, ritualized communication is of utmost importance to species
recognition. For example, ritualization of FAPs is invariably found in display behaviors linked to
reproductive fitness. Sexual or social selection plays an important role in the evolution of intraspecific
(intrasexual and/or intersexual) ritualized FAPs into courtship behaviors. In animals that mostly use
vision in intraspecific communication, FAP effects are magnified by the evolution of particular body
structures and/or colors (e.g. the peacock’ tail, the red deer antlers etc.) displayed during the ritual
performance. In this respect, behavioral plasticity (communication) can precede and instigate
morphological evolution (Mayr, 1963; Palanza and Parmigiani, 2016; Allf et al., 2016).
Moreover, rituals promote behavioral synchronization that is the basis of intra-specific connection and
communicative bonding (for example between sexual partners or in aggressive displays for
competition over mates and resources). Patterns of synchronous activity have been found in almost
every animal group studied, from multicellulars animals (Placozoa) to humans. Rather, synchrony
plays a role in almost every aspect of group behavior; synchronized activity promotes information
processing within the group and allows to respond quickly and effectively to changing environmental
conditions (such as the appearance of a predator), at the same time preserving the cohesion and
organization of the group (Couzin, 2018). Group living organisms must synchronize their decision to
find food or appropriate habitats or to avoid threats. Activity synchronization in colonies of cavitydwelling
ants or of giant honeybee are well documented (Cole, 1991; Kastberger et al., 2008), as well
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as synchronized behavior in animal collectives such as birds and fish. Interestingly, studies of the
propagation of behavior and group cohesion in fish, birds and humans have shown a fundamental
commonality in the mechanisms by which behavior spreads. For example, reinforcement tends to
depend on the fraction of perceived individuals exhibiting a certain behavior rather than on the
absolute number of other individuals (Rosenthal et al., 2015). Moreover, there in evidence from both
fish and human studies that the propagation of behavior also depends on the structure of social
networks (Ugander et al., 2012; Strandburg-Peshkin et al., 2013). Nevertheless, the mechanisms
underlying the remarkable speed at which information propagates in some animal groups (e.g.
starlings and silverside fish) is not completely understood. A hypothesis is that individuals are able
to interact with a projected future state of the system (future position or velocities of other individuals)
rather than the current state (Noy et al., 2011).
Altogether, rituals may have emerged from habitual behavior to enhance behavioral flexibility in
order to face environmental unpredictability as well as to promote intra-group communication and
cohesion.
3 Anthropology of rituals
Cultural anthropologists accept the definition of scripted, stereotypic forms of collective actions
(Gluckman, 1975). Rituals are a constant tendency of every culture (Turner, 1985), remarkably
persistent through history of mankind (Staal, 1989) and deeply connected with the experience of the
Sacred (Penner, 1992).
Cultural rituals share common ideational and formal structures (Dulaney and Fiske, 1994). Exactly
like in animal rituals, cultural rituals involve precise spatiotemporal arrays. Rather, collective rituals
often serve for rigidly demarcate sacred and profane time and space (Eliade, 1959). Moreover, they
share similar formal features: internal repetition and redundancy, “scriptedness”, detachment from a
pragmatic goal (Lienard and Lawson, 2008). Noteworthy, even when rituals are justified by
mythological “explanations”, they are inherently compelling, i.e. with a compulsory character
(Rappaport, 1979; Tambiah, 1985; Dulaney and Fiske, 1994; Boyer and Lienard, 2006). Of course,
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cultural rituals involve much more elements than a simple routinized motor behavior, often appearing
as a multi-sensorial manifestation including costumes, masks, effigies, dances, as well as prayers,
invocations, etc. Nonetheless, exactly like animal ritual behavior, cultural rituals are built on ordinary
or habitual action sequences, performed in exaggerated and repeated forms and divorced from their
original pragmatic function (such as ritual eating or drinking and so on) (Boyer and Lienard, 2006).
During ritual performance, ordinary actions are adopted in different contexts and often connected to
non-ordinary or supernatural agents (Lawson and McCauley, 1990). Nevertheless, the parallel
between human culturally evolved and biologically evolved animal rituals is relevant in that
exaggerated habitual behaviors (in form, colors and so on) appear to be the building blocks of both
forms of ritualization. Moreover, anthropological studies seem to converge on the same causations
described for animal rituals, i.e. predictability of the environment and intra-specific communication.
3.1 Environmental predictability
The aim of increasing environmental predictability would be implicit in ritual’s etymon itself. Indeed,
the etymology of ritual would derive from the Sanskrit “Ṛta”, a fundamental Vedic concept dealing
with the principle of the cosmic order (Panikkar, 2001; Holdrege, 2004). A central purpose of rituals
concerns ordering of events, places and times, and their separation into the dimensions of Sacred and
Profane (Eliade, 1959; Durkheim, 1963; Turner, 1982; Dulaney and Fiske, 1994). In this connection,
rituals imply order and predictability, being “triggered” under anxiety-provoking conditions of
uncertainty (Malinowski, 1922). Rituals, at whatever level of phylogeny, make the world orderly, so
that behavior (be it in animals, individuals or communities) may be better oriented, coordinated and
so controlled (Wallace, 1966). Regardless to the occasions for ritualized behavior (concerning lifestages
or seasonal changes or unexpected contingences, such as illnesses or misfortune), rituals
guarantee the stable order of the world or prevent a possible perturbation of the pre-constituted order.
In so doing, rituals contribute to control the right course of natural and human events. Ultimately,
ritual acts, with its intrinsic “performative” (i.e. formative and transformative) power (Tambiah,
1985), to maintain the homeostasis (i.e. the environmental stable condition and equilibrium) of human
life-stages (rites of passage) and natural (seasonal and cosmic) cycles (Dulaney and Fiske, 1994). The
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persistent drive to ritualization in humans (“the ritual mind” according to Jones (2013)) may have
been enhanced by the advent of symbolic conscience (Tattersall, 2017) that widened the concept of
environment to the entire universe, with the emerging “cultural” problem to turn an unpredictable
chaos into an ordered cosmos.
3.2 Intra-specific communication and group cohesion
With regard to intra-specific communication, through an exaptation phenomenon, habitual patterns
that, for example originally served the function of body maintenance, acquire a communicative value,
thus appearing as exaggerated copies of the original pragmatic ones. Collective rituals, exactly like
in animal kingdom, promote a sense of connection within the group (Jones, 2013). A crucial mode of
ritual cohesion is synchronized physical action that favors cooperation, shared intentionality (Reddish
et al., 2013), intimate communicative and emotional bonding (Whitehouse, 2004). Proximate
physiological mechanisms are yet unknown, but neuro-endocrine system could play a part.
Particularly, oxytocin is critically involved in affiliative processes, enhancing prosocial interactions
(Ross et al., 2009). Moreover, oxytocin would exert a role in emergence and salience of “spirituality”
(i.e. the belief in a meaningful life pervaded by a sense of connection to a Higher Power, the world
or both) (van Cappellen et al., 2016). In human cultures, ritual synchronization facilitates the
circulation and renovation of symbolic representations and myths (Eliade, 1948; Durkheim, 1963),
promoting the consolidation of the “sacred values” of community (Ginges et. al., 2007). Nevertheless,
although myths and rituals are deeply intertwined, rituals remain an independent phenomenon,
inherently compelling, pre-linguistic and more fundamental than myth and symbolic conscience
(Staal, 1989; Burkert, 1998).
To sum up, human collective rituals would serve the function of increasing stability and predictability
of the environment as well as connecting social groups, thus promoting the circulation of values and
beliefs.
4. (Psycho)pathology of rituals
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Psychopathology may represent a favored viewpoint from which to deepen the phylogenetic role of
rituals, since its special position at the crossing point of biological and cultural determinants (Turbott,
1997). Besides, a normal function or behavior may be highlighted by means of its corresponding
psychopathological condition (Nesse and Stein, 2012).
Rituals are normally present in children to the point to be considered part of normal development
(Graham, 1991; Barker, 1995), starting at age two with a peak in middle childhood (Boyer and
Lienard, 2006). Contents and formal features are remarkably similar to pathological compulsions (Zor
et al., 2009). This would support the hypothesis of a continuity between normal and pathological
compulsions (Muris et al., 1997; Rassin et al., 1999). The most frequent themes in children are about
orderliness and “just-right” household routines, with a strong tendency to magical thought (Turbott,
1997). Moreover, rituals tend to increase during particular phases in the lifetime, particularly
pregnancy, motherhood and fatherhood, significantly concerning contamination or aggressive themes
with related compulsions of washing and cleaning or of control (Abramowitz et al., 2003).
Noteworthy, compulsive rituals do not differ across the cultural groups (Zohar and Felz, 2001). The
invariance across cultures would support the hypothesis that compulsions represent innate, preprogrammed
behaviors inappropriately or excessively “released” in psychopathological conditions
(Rapoport et al., 1994).
4.1 Psychopathology of OCD
In psychopathology, rituals of OCD are described as compulsions. According to the current diagnostic
systems (DSM-5) (APA, 2013), compulsions are repetitive behaviors that the individual feels driven
to perform in response to an obsession or according to rules that must be applied rigidly. Therefore,
unlike stereotypies, compulsions present a more complex motor and cognitive structure; the
individual usually perceives them as intrusive and unwanted causing significant distress and
functional impairment.
Recent studies confirm a dimensional architecture of OCD. The main symptom dimensions are: 1)
symmetry obsessions with counting, ordering and repeating compulsions; 2) contamination
obsessions with washing and cleaning compulsions; 3) hoarding compulsions; 4) aggressive
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obsessions with checking compulsions; 5) sexual and religious obsessions (Barahona-Correa et al,
2015).
Main symptom clusters concern ordinary or physiological acts (such as cleaning or washing) with a
high evolutionary significance. Other symptoms, especially those concerned with ordering and
arranging to achieve symmetry, appear to reflect a need to feel the environment “right” (Fineberg et
al., 2018). Ethological and psychopathological studies have highlighted the striking similarities
between animal habitual behavior and both human normal behaviors and pathological compulsions
(Lorenz, 1966; Insel, 1988; Eilam, 2015). Likewise, several authors have emphasised the similarity
in form and contents between compulsions and cultural rituals (Freud, 1961; Dulaney and Fiske,
1994).
Human ritualized behavior is present in different contexts (precautionary behavior, social behavior
and psychopathology). Independently from the context, ritualized behavioral pattern is characterized
by redundancy (superfluous actions that are non-functional for the achievement of a goal),
repetitiveness (recurrent behaviors or utterances) and rigidity (emphasis on fidelity and invariance)
(Lang et al., 2015). Moreover, compulsions are invariably inscribed into a precise spatio-temporal
order (Eilam et al., 2006). Like both animal and cultural rituals, the focus of attention in compulsions
is directed to the formal structure of the performance (Boyer and Lienard, 2006; Eilam, 2015). That
is, cognitive efforts are focused on the idiosyncratic “rules” of ritual, such as the number of
repetitions, the details and the particular direction of the gestures and so on, even though compulsions
are perceived as ego-dystonic (i.e. experienced by the subject as intrusive and unwanted or clearly
absurd).
Different evolutionary hypotheses of OCD have been proposed: OCD has been related to a disruption
of a specific “psychological immune system” (Abed and de Pauw, 1998), with compulsions conceived
as a risk-avoidance behavior. Szechtman and Woody (2004) hypothesize an over-expression of a
“security-motivation system” in OCD, evolved to monitor external signals of particular kinds of
potential danger. Based on a similar evolutionary background, Boyer and Lienard (2006) have
connected obsessions and compulsions to a “potential hazard repertoire” and a “precaution repertoire”
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respectively; that is, compulsions would be a species-specific, precaution-related behavior selected
to prevent recurrent threats to fitness in ancestral environments.
Independently from the evolutionary model adopted, human ritualization appears to be triggered by
uncertainty and unpredictability-related anxiety (Hirsh et al., 2012); that is, rituals would be
performed for reducing a “high-entropy state” (e.g. a complex, uncontrollable or unpredictable
situation), in order to regain a feeling of control and stability. In this connection, individual human
rituals as well as psychopathological compulsions would deal with an anxiolytic feeling of stability
and controllability of the environment. From the subjective perspective of the obsessive patient,
compulsive rituals are performed to contrast a pervasive feeling of lack of order or “formlessness”
(aneidos) (von Gebsattel, 1938; Straus, 1948). This fear of “disorder” may be subjectively felt as
spatial asymmetry (at the level of physical environment), pollution (organic environment) or moral
impurity (at the level of symbolic conscience).
4.2 OCD comorbidity
Compulsions are not limited to OCD spectrum disorders but encompass different psychiatric
conditions (Rapoport et al., 1994). Particularly, they occur in different neurodevelopmental disorders:
OCS are major features of some autism spectrum disorders and they are highly comorbid with
attention deficit hyperactivity disorder (ADHD) (Brem et al., 2014). Moreover, compulsions
frequently occur in neuropsychiatric syndromes (Tourette's syndrome, post-encephalitic Parkinson’s
disease, mental retardation, dementia) (Turbott, 1997).
More generally, motor abnormalities, including stereotypies (defined as voluntary, highly repetitive
and purposeless abnormal movements) represent (like other movement disorders, such as dyskinesias
and catatonic-like signs) a relatively distinct neurobehavioral dimension, intrinsic to schizophreniaspectrum
disorders, closely related to the underlying neurodevelopmental substrate (Walker and
Lewine, 1990) and preceding the onset of psychosis (Compton et al., 2015).
Interestingly, OCD and obsessive-compulsive symptoms (OCS) are highly comorbid with both major
endogenous psychoses, Bipolar Disorder (BD) and Schizophrenia (SCZ): lifetime prevalence of BD
in OCD patients is up to 21.5%, while co-morbid OCD is diagnosed in 8-32% of patients with SCZ
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(Tonna et al., 2015a). Moreover, early-onset OCD often precedes the clinical onset of psychosis,
significantly increasing risk for both BD and SCZ (Cederlöf et al., 2015).
In SCZ, OC and psychotic symptom dimensions, though independent from each other, tend to coaggregate
into complex symptom phenomena, with OCS “encapsulated” in delusional constructs. For
example, compulsions may be linked to delusional themes or sustained by auditory hallucinations
(Porto et al., 1997; Tonna et al., 2016a). This tendency reminds in anthropology the myth-ritual
complexes (D’Aquili, 1983), where mythological constructs are inextricably embedded in ritualistic
behavior. Interestingly, “schizo-obsessive” patients display a ritualistic behavior similar of that of
“pure” OCD patients but they differ from OCD with respect to spatial behavior. In fact, OCD patients
are more stationary when performing motor tasks (with restricted spatial motor behavior as a
reflection of the high concentration in performing compulsions) whereas “schizo-obsessive” patients
are much more mobile, wandering over a large area. In other words, SCZ-OCD comorbidity seem to
combine a specific spatial behavior from both disorders: the addition and repetition of acts typical of
OCD with more extensive exploratory behavior reminiscent of SCZ (Gershoni et al., 2014).
OCS have a significant impact on global functioning in schizophrenia. Particularly, mild OCS
contribute to higher levels of functioning in schizophrenic patients with low levels of disorganization
(Tonna et al., 2016b, 2016c). That is, rituals and compulsions may confer a certain functional order
and stability, able to counterbalance the functional impairment sustained by the underlying thought
and behavioral disorganization process. This psychopathological finding is in line with the
“homeostatic function” of rituals from both ethological and anthropological perspective.
Moreover, growing evidence (de Silva and Marks, 1999; Mathews et al., 2008; Briggs and Price,
2009; Miller and Brock, 2017) suggests a strong association between different types of childhood
trauma (emotional abuse and neglect) and the onset of OCS. A link between childhood trauma and
“obsessive neurosis” was first postulated by Freud (1913). The mechanism through which trauma
exposure affects severity of OCS is not understood yet. Nevertheless, it has been hypothesized that
in predisposing individuals (e.g. with pre-existing genetic and neurobiological vulnerabilities) trauma
may exacerbate the urge to engage in a compulsive behavior as a way to escape the intrusive-trauma-
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related imaginery, negative emotions and anxiety (Miller and Brock, 2017).
Altogether, OCS would emerge as an abnormal and invalidating ritualized behavior due to a
pathological feeling of uncertainty and unpredictability. On the other hand, based on individual
neurobiological vulnerabilities, psychopathological compulsive behavior might also reveal its
original ordering and hyper-controlling function, counterbalancing an underlying “high-entropy
state” due to a biological as well as to a higher-order level (psychological or sociocultural)
disorganizing process (Kendler, 2005).
5. Neurobiology
5.1 Invertebrate animal studies
In invertebrates, rhythmic and repetitive behaviors are produced by specific central pattern generators
(CPGs). CPGs are circuits able to initiate rhythmic motor patterns even in the absence of timing cues
from sensory neurons or other extrinsic inputs. They are fundamental to generate organized and
repetitive behaviors such as those underlying feeding, locomotion and respiration (Selverston, 2010).
CPG circuits can be massively reconfigured by modulatory neurons and neuromodulatory substances
such that different outputs can be produced by the same circuit elements, conferring behavioral
flexibility as well as stability (Marder et al., 2005). In addition, modulators often directly mediate the
interactions between functionally related CPGs (Dickinson, 2006). Therefore, far from being rigid
and stereotyped, innate behavior is subject to modulation by internal states (e.g. satiety state) and
external context of the stimuli (environmental cues). Context-dependent modulation is particularly
well described for fruit flies. For example, male-courtship in Drosophila is modulated by olfactory
receptors (indicating the presence of food) to sustain the progeny (Grosjean et al., 2011). This inbuilt
behavioral flexibility allows animals to prepare appropriate behavioral responses to stimuli and
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represent the basis for more complex behavior, such as learning and social behavior (Su and Wang,
2014). Such neuro-modulatory control pathways are highly conserved in vertebrates (e.g. with an
important role in enabling spinal cord and brainstem circuits to generate rhythmic motor patterns)
(Marder and Bucher, 2001).
5.2 Vertebrate animal studies
In vertebrates, a broad array of repetitive behaviors engage neural circuits interconnecting the
neocortex with the striatum and related regions of basal ganglia (the cortico-striato-thalamocortical
circuitry – CSTC). Particularly, basal ganglia circuits appear to operate in different types of cognitive
and motor actions, exerting a primary role in the acquisition of repetitive behaviors and habits.
Consistently, basal ganglia loops appear over-expressed in disorders producing repetitive thoughts
and behaviors (Graybiel, 2008).
Growing evidence confirms the role of striatum in the acquisition of habitual motor patterns in rodents
(Thorn et al., 2010). Particularly, in mammals a dynamic competition is thought to occur between
dorsomedial striatum (DMS) where intentional goal-directed actions are encoded, and dorsolateral
striatum (DLS), where they are transformed into habitual automated responses. The reconfiguration
of DLS circuit properties responsible for habit formation is modulated by interneuron plasticity on
the striatal output (particularly involving a single class of interneuron, the “fast-spiking interneurons”)
(Fino and Venance, 2011; O’Hare et al., 2017).
In rodent experiments, habits can be defined as being performed not in relation to a current or future
goal but rather in relation to a previous goal and the antecedent behavior that most successfully led
to achieving the goal. Thus, goal-directed behavior are purposeful, “action-outcome” behaviors
whereas habits are learned, automatic “stimulus-response” behaviors (Dickinson, 1985). Of course,
the distinction based on the experiments between “action-outcome” vs “stimulus response” system is
not absolute (Faure et al., 2005). Rather, there is a dynamic balance between control systems
governing flexible cognitive control and more automatic control of behavioral responses (Daw et al.,
2005). The gradient in striatal activity does not move “in toto” from one side to another; rather,
activity can occur simultaneously in multiple cortico-basal ganglia loops, with dynamic shifts in
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cortical and striatal regions underlying the transition from goal-directed to habitual behavior
(Graybiel, 2008).
As above seen, habitual behaviors are performed as a routine response to specific environmental
triggers but, once provoked, are typically insensible to changes in environmental contingency
(Fineberg et al., 2018). That is, habitual action steps are typically released as an entire behavioral
episode once the habit is well engrained. This characteristic expression of an entire sequential
behavior extends to stereotypes and rituals, including cultural rituals in humans, as well as
psychopathological compulsions. Neural mechanisms involved in determining such extended,
“incapsulated” behavior are not understood. Nevertheless, studies in monkeys (Fujii and Graybiel,
2003) and in rodents (Jog et al., 1999; Barnes et al., 2005) have shown heightened neural responses
in sensorimotor striatum related to the first and last movements of the sequence, as though marking
the boundaries of the habitual action sequences. When habitual motor pattern is encoded and
“packaged” as a unit ready for expression, the boundaries of the unit are marked and the behavioral
steps unfold from the first to the last boundary marker (Graybiel, 2008).
Altogether, cortico-basal ganglia loops are engaged in different types of repetitive behavior in
vertebrates, with a gradient in flexibility, repetitiveness and automaticity from pure automatic and
highly repetitive stereotypes to more complex and flexible habitual behavior. Rituals would represent
the endpoint of this process from pure automaticity to full conscious control.
Interestingly, works in primates, rodents and lamprey have shown that the organization of the basal
ganglia has been highly conserved throughout vertebrate phylogeny. The basal ganglia structures
developed most likely to control basic patterns of behaviors, such as initiation of locomotion, steering,
eye movements and feeding. In this connection, different modules within the basal ganglia are
responsible for controlling different motor programs. During vertebrate evolution, this modular
organization has increased in parallel to the evolution of new patterns of behavior (Grillner et al.,
2013). Therefore, whereas the lamprey and “lower” vertebrates have a very limited behavioral
repertoire and a correspondingly limited number of modules, mammals show an extensive and varied
set of motor behaviors. Of course, during evolution from amphibians to reptiles, the elaboration of
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pallial-striatal connectivity may have enhanced behavioral flexibility. The expansion of corticalstriatal
connectivity continued in mammals, becoming a critical point in evolutionary increases in
behavioral flexibility and decision-making processes (Lee et al., 2015). In a remarkably similar way,
an increasing connectivity in the hyperstriatum ventrale and neostriatum enhanced behavioral
plasticity and innovation in birds (Lefebvre et al., 2004).
Growing evidence suggests a prominent role of basal ganglia also in the control and modulation of
ritualized social behaviors and communication in both animals and humans. Bird song learning
critically depends on a forebrain circuit that corresponds to a cortico-basal ganglia loop in mammals
(Olveczky et al., 2005; Kao and Brainard 2006). In humans the striatum and associated cortico-basal
ganglia loops appear to be involved in human language (Lieberman et al. 2004; Crinion et al., 2006).
Therefore, it is possible to hypothesize a role of cortico-basal ganglia circuits also in synchronized,
communicative behavior typical of human collective rituals.
Altogether, basal ganglia exert a crucial role in the regulation of daily master routines and subroutines
from reptilians to humans, being responsible for 'species-typical' behaviors, which are
present in aggression, dominance, territoriality, and ritual displays (MacLean, 2000; Ploog, 2003).
Moreover, basal ganglia would be involved in ritualized social behaviors and intra-group
communication in vertebrates.
5.3 Animal models of OCD-like behavior
Animal models of OC-spectrum symptoms were originally generated by employing either behavioral
conditioning, pharmacological treatment or physical manipulation (Alonso et al., 2015). These studies
converge on the fundamental contribution of corticostriatal circuitry in OCD-like symptoms, in
keeping with the growing clinical literature (Burguière et al., 2015).
A central question to modeling OCD in animals is whether it is possible to characterize motor
behavior not simply as a stereotyped, automated phenomenon but as representing an underlying
cognitive-affective alteration (Wolmarans et al., 2018).
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Animal models show a gradient from more “ritualized” behaviors (in which higher cognitive efforts
are directed to the correct execution of the task) and more stereotyped and automated behaviors. Of
course, subjective features of OCD, like obsessions or mental compulsions, are not accessible through
animal models (Eilam et al., 2006). Nevertheless, models based on quinpirole-induced compulsive
checking (referring to the behavioral changes in rats after chronic treatment with the D2/D3 dopamine
agonist quinpirole) have shown compulsive-like features (distinguishable from “pure” stereotypies)
in terms of cognitive focalization on the act itself and loss of automaticity. This induced compulsivelike
performance has been interpreted “as parallel to the repeated compulsive rituals that OCD
patients execute in response to an obsessive thought or idea” (Eilam et al., 2012). Similarly,
behavioral animal models of OCD, like increased marble burying (based on the natural rodent
behavior of burying noxious or harmless objects) or excessive nest building behavior seem to reflect
a cognitive foundation. In fact, they implicate a reason for compulsivity, i.e. concerning about
correctness of acts and “just right” perceptions (Wolmarans et al., 2016), which would be underpinned
by CSTC pathways (Leckman et al., 1994; Monteiro and Feng, 2016).
Essentially, compulsive-like behavior in animal models presents the following features: 1) it varies
in frequency and intensity within and between subjects variance; 2) it is resistant to behavioral
sensitization; 3) it is repetitive, persistent and time consuming; 4) it is characterized by social deficits
(Wolmarans et al., 2018).
In general, the more animal models have compulsive-like features, the more they show the attributes
of highly motivated performance (i.e. with higher cognitive efforts) but without apparent satiation.
(Szechtman et al., 2017).
For animal models of OCD, a fundamental issue is to demonstrate a selective alleviation of OCD-like
symptoms by administration of non-selective serotonin reuptake inhibitors (SRIs) (the principal antiobsessive
pharmacological treatment in humans), as well as the demonstration of a lack of effect of
drugs such as non-serotoninergic antidepressants or benzodiazepines, which are not effective in OCD.
Moreover, since in OCD patients SRIs administration is effective only some after weeks of treatment,
beneficial effects should be achieved after chronic (versus acute) administration (Alonso et al., 2015).
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Actually, various animal models (such as non-nutritive chewing, grooming, shifting/digging in
bedding, or the nest building behavior) have confirmed the importance of the 5-HT system in the
neurobiology and treatment of OCD with a successful response to chronic administration of highdoses
SRIs (Korff and Harvey, 2006; Monteiro and Feng, 2016; Fineberg et al., 2018).
5.4 Neurobiology of OCD
Distinct, parallel and highly conserved neural systems within the cortico-striato-thalamocortical
circuitry (CSTC) underlie the dimensional structure of OCD (Mataix-Cols et al., 2004). Particularly,
discrete neural systems appear to mediate the expression of different symptoms. The neuroanatomic
proximity within the fronto-striato-thalamic loops and the fact that they are “open” circuits (i.e.
allowing connections between various sub-structures) (Tibbo and Warneke, 1999) may explain the
frequent coexistence of different symptom dimensions. These circuits lie at the crossing point of
widespread cortico-subcortical loops involved in the pathophysiology of both BD and SCZ.
Specifically, BD is mostly related with hypoactivity in orbitofrontal cortex (OFC) (i.e. decision
making, impulse control) and in dorsolateral prefrontal cortex (DLPFC) (i.e. planning, attentional set
shifting), while OCD mainly presents hyperactivity of OFC with deficit in emotional processing
(Ekman et al., 2010). Schizophrenia shares similar cortical-subcortical pathways with specific patterns
of DLPFC functional impairment, affecting working memory (Goldman-Rakic, 1994; Lewis et al.,
2004). Fronto-striatal dysconnectivity within overlapping cortical–subcortical circuits may partially
explain the frequent co-occurrence of OCS during the course of both BD and SCZ (Tonna et al.,
2015a,b) as well as the tendency of OC and delusional symptoms to co-aggregate into unique
psychopathological complexes (Porto et al., 1997).
The evolutionary conserved cortical-striatal-thalamic loops along vertebrate phylogeny, despite the
huge differences in connectivity across species (with the increasing role of prefrontal cortical areas
in modulating sub-cortical circuits in primates (Marchesi et al., 2009; Monteiro and Feng, 2016)
permits a parallel between OCD and habitual behavior in animals.
Actual pathophysiological models of OCD agree on the crucial role of the caudate nucleus, regardless
to a primary (subcortical model) or a secondary (cortical model) involvement (Barahona-Correa et
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al., 2015). Particularly, it has been hypothesized a disruption of the caudate’s “filter” in the activation
and maintenance of highly conservative behavioral and cognitive patterns (Baxter et al., 1992;
Fineberg et al., 2018).
Therefore, compulsions would result from an excessive release of habitual, cyclic, species-specific,
action strategies (Thorn et al., 2010) due to an exaggerated shift from goal-directed to habitual
behavioral control mediated by a dysfunction within the dorsal striatum (Gillan et al., 2014; Fineberg
et al., 2018). Interestingly, an unbalance between goal-directed and habitual behavior sustained by
frontostriatal dysconnectivity has also been found in unaffected first-degree relatives of OCD
patients, representing a candidate endophenotype for OCD (Vaghi et al., 2017).
The caudate nucleus is under the prevailing influence of the ventromedial prefrontal cortex (vmPFC).
The vmPFC plays a complex role in fear learning and safety signaling in mammals, including humans,
and it is closely involved in integrating the evaluative processing of environmental cues with flexible
behavior (Fineberg et al., 2018). Studies in rats have demonstrated a role of vmPFC in recalling a
previously learned extinction fear (Quirk et al., 2000). Moreover, medial prefrontal cortex is important
in the control of checking via its role in uncertainty processing; consistently its dysfunction is
implicated in excessive checking behavior in rats (D’Angelo et al., 2017).
Abnormal vmPFC activation has been implicated in impaired fear retention in OCD (Milad et al.,
2013). Particularly, it has been hypothesized a dysfunctional vmPFC safety signalling in OCD that
potentially undermines explicit contingency knowledge, leading to the failure to flexibly update fear
responses and the persistence of rigid habitual compulsive activity (Aspergis-Schoute et al., 2017).
In other words, the inability to update threat estimation, with the consequent perception of
environmental unpredictability lead to the generation of habit behavior, expressed in ritualized form.
In general, prefrontal cortex has long been implicated in inhibition of inappropriate responses
in mammals (Quirk et al., 2000) via a top-down inhibitory control over sub-cortical structures (basal
ganglia) (Fineberg et al., 2018). Particularly, the orbital and medial prefrontal regions, though
overlapping functional and organization features, are involved in partially distinct ‘orbital’ and
‘medial’ prefrontal networks that differ in their intrinsic pattern of cortico-cortical connections and
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also in their connections with sensory, limbic, striato-thalamic and visceromotor structures in other
parts of the brain (Ongür and Price, 2000). OFC has been strongly implicated in OCD
pathophysiology (Manning, 2016): OFC is important in behavioral flexibility after negative feedback
(reversal learning) in rats (Ragozzino, 2007). Moreover, hyperactivity in OFC-striatal pathways
induces augmented sensitivity to initial trigger stimuli (start signal) or to deficiency in motivation to
break the initiated behavioral ritual (stop signal) in mice with perseverative grooming behavior
(Monteiro and Feng, 2016). Human functional imaging data suggest OFC hyperactivity in patients
with OCD. These data are corroborated by the finding of OFC dysregulation also in unaffected
relatives of OCD patients (Chamberlain et al., 2008).
Taken together, OCD would be associated to a deficient top-down inhibitory control in prefrontal
cortex nodes (vmPFC and OFC), coupled with a shift from flexible-contingency behavior to excess
habit generation and mediated by dysfunction within the striatum (Fineberg et al., 2018). This is
consistent with recent results from neuroimaging studies showing consistent gray matter volume
alterations in prefrontal-striatal circuitry with greater striatal volume and reduced prefrontal grey
matter volume in OCD adults (Hu et al., 2017).
6. Formal structure of rituals
Habitual action sequences, relatively invariant and mainly dependent on sensorimotor striatum, are
built on single action-units, each triggered by the antecedent action rather than by environmental
stimuli. Therefore, they lie on reverberant and self-sustaining cycles (Ostlund et al., 2009; Dezfouli
and Balleine, 2013), disconnected from environmental contingences (Fineberg et al., 2018).
The elementary motor units of habitual behavior have been divided into functional/common acts
(mandatory for task performance and rendering behavior its rigidity and pragmatism) and nonfunctional/
idiosyncratic acts (unnecessary or even irrelevant for the task, but conferring variability,
plasticity and individualism of behavior) (Zor et al., 2009; Eilam, 2015).
An important feature of habitual behavior is its specific spatio-temporal structure (Eilam et al., 2006;
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Zor et al., 2009). Space is conceived as a specific set of places where a specific set of acts is performed
at a specific time. Thus, whenever ritual is performed, the environment is remodeled through precise
spatial and temporal criteria.
Rituals maintain the circular and spatio-temporal structure of habitual behavior: first, rituals, like
habits, are motor sequences constructed on and fragmented into single action-units, within a
reverberant cycle. The beginning of the action may be triggered by external stimuli but once activated,
the motor sequence is self-sustaining, marking its compelling character (Tambiah, 1985; Dulaney and
Fiske, 1994) as well as the sense of lack of task completion or “incompleteness”, typical of OCD
patients (Rapoport, 1989; Ecker and Gonner, 2008).
Second, rituals, like habits, are inscribed into precise spatio-temporal parameters. The spatiotemporal
structure of rituals has been described in animals (Hediger, 1964), in psychopathological
compulsions (Eilam et al., 2006) and in cultural rituals (Eliade, 1959).This implies a re-organization
of the environment where rituals are performed through a super-imposed order and control (Zor et
al., 2009).
Rooted in this “basic structure”, ritualization occurs through two combined mechanisms:
1) The excessive performance of non-functional acts, considered as the core process of ritualization
(Zor et al., 2009).That is, when a behavior acquires a ritual form, its performance presents a high rate
of repetition and exaggeration through an inflated performance of unnecessary acts. In this respect,
habitual action-units are not simply non-functionally repeated, but also “exapted” into an exaggerated,
magnified form. The result is a reduced functionality in terms of task completion (Zor et al., 2009)
and a detachment from its global function (Eilam, 2015) with a lack of pragmatic goal (goal demotion)
(Boyer and Lienard, 2006).
2) Direction of locus of attention to the task (Eilam et al., 2006; Krátký et al., 2016); that is, cognitive
efforts are redirected to the “just right” of the acts or the “script” of the performance. Therefore, motor
performance loses its automaticity with hyper-attention on the formal structure of the behavior, with
special focus on the smaller units of the action flow (action parsing) (Boyer and Lienard, 2006).
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Psychopathological compulsions may be conceived as ritualized habitual behavior in that, like habits,
they are characterized by repetitive action sequences that become disconnected from the prevailing
environmental contingencies and lack an obvious relationship to the overall goal of the activity, but,
like rituals, they lose automaticity in favor of hyper-attention to the “precise” execution.
To sum up, we hypothesize that rituals developed from habitual behavior through an increase of nonfunctional
acts (enhancing behavioral flexibility to environmental changes) with loss of automaticity
and redirection of attention to the performance itself.
7. Discussion
Every attempt to link together a wide range of phenomena from different disciplinary fields may be
exposed to the criticism of reductionism (Turbott, 1997). Nonetheless, it is intriguing to hypothesize
a continuity among behaviors so strikingly similar in forms and contents and extensively diffused in
nature, psychopathology and culture. Even though one can assume that different evolutionary
trajectories may have converged into apparently comparable manifestations, the present contribution
would suggest that indeed remote fundamental links connect the various types of ritual. In other
words, at least in vertebrate phylogeny, similarity may be better explained in terms of homology:
1) Face validity: the same formal structure underlies animal, psychopathological and cultural rituals.
Moreover, few and invariant contents cut across different ritual manifestations, insisting on ordinary
or physiological acts or actions (such as ordering, checking and rearranging) aimed at environmental
constancy.
2) Construct validity: The neuro-biological substrate of rituals in vertebrates lies on the cortico-striatothalamocortical
circuitry (CSTC), which is focused on the basal ganglia; structures that are highly
conserved and implied in daily routines and habits. Moreover, animal models of OCD-like behavior
would confirm a similarity in neural systems implicated and behavioral phenotypes to human
compulsions.
3) Predictive validity: different animal ritualized behaviors are used as OCD models and respond to
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the same OCD therapeutic agents (serotoninergic drugs) (Monteiro and Feng, 2016; Fineberg et al.,
2018).
It is intriguing to hypothesize that homology of ritual behavior may be backdated up to invertebrate
phylogeny. If we consider a hierarchical level of homology, behaviors can be homologized at the
level of the structural bases that allow that behavior to be displayed (e.g. the basal ganglia for rituals
in vertebrates), at the level of the neural control of the behavior or at the level of the genetic pathways
of a behavior (Hall, 2013). We know that developmental genes such as hox genes have a highly
functionally conserved role throughout phylogeny (e.g. specifying anterior-posterior morphology in
both arthropods and chordates) (Burke et al., 1995; Catela et al., 2016). Homologous genes at the
level of DNA sequence might influence similar categories of behaviors across taxa (Reaume and
Sokolowski, 2011). In other words, the same genes could be implied to build the potential for specific
behaviors in both invertebrates and vertebrates (Baker et al., 2001).
The backbone of ritual performance lies on the circular and spatio-temporal structure of habitual
behavior, displaced from its original context and “exapted” for a different purpose. Ritualization
develops when the action flow is disrupted by high repetition of non-functional acts and motor
performance loses its automaticity with hyper-attention to the act itself. Moreover, the deviation of
cognitive efforts on the act (rather than on the function) implies a further exaggeration of formal
features (in terms of redundancy, repetitiveness and so on).The result is a complete detachment from
the original pragmatic goal.
If rituals imply non-functionality (and, at some extent, even exposure to threats and predators) what
can we infer about its evolutionary meaning?
Throughout invertebrate and vertebrate phylogeny, the adjustment to environmental unpredictability
implies a shift from habitual and automated processes to an enhanced focalization and control on the
performance with loss of automaticity.
It has been suggested (Eilam et al., 2011) that the redundancy of non-functional acts reduces anxiety
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giving a feeling of controllability and predictability. Non-functional acts guarantee behavioral
plasticity to fit the situation, preventing automatic performance (Zor et al., 2009; Eilam, 2015). Their
inflated repetition would have been promoted to enhance behavioral flexibility in order to face
environmental unpredictability. At the same time, the redirection of attention to the formal structure
of the performance gives itself a sense of control and order.
We hypothesize that rituals, whether animal, human or cultural, are performed to create order, stability,
regularity and ultimately predictability of the environment (Fiske and Haslam, 1997). This ordering
and stabilizing function, perhaps still present in invertebrate phylogeny, may be traced at any level of
vertebrate evolution: in animal (from “lower” vertebrates to mammals) ritual behavior (Serruya and
Eilam, 1996), in human daily-life rituals and, distorted and magnified, in psychopathological
compulsions. In that sense, OCD, like other psychopathological conditions, may represent the hyperexpression
of a normal, highly evolutionally conserved “protective response” (Rapoport et al., 1994;
Nesse and Stein, 2012). The function of controlling the environmental constancy is also conserved in
human cultural rituals, performed to preserve the “right” order of human, nature and cosmic cycles
(Wallace, 1966; Dulaney and Fiske, 1994). Rather, this phenomenon is particularly evident in
collective cultural rituals, which have been consistently described as a “homeostatic” and adaptive
response to ecological or social “disordering” threats (Malinowski, 1922; Sosis and Handwerker,
2011).
Environmental unpredictability (either social or non-social) generates anxiety in both animals and
humans (Foa et al., 1992). Whenever there is a threat of uncontrollability and unpredictability, i.e. a
potential “disorder”, rituals are performed to maintain the pre-existing order, reducing anxiety.
During the performance, attention is focused to the reordering sequence of ritual acts (repetition,
specific number of procedural steps, time-specificity), which in turn, leads to the subjective
perception of a “re-ordered” world (Legare and Souza, 2014). The result is to actually achieve a
change of state or do something effective (the so-called “performative” character of ritual acts and
magical rites (Tambiah, 1985)). From a psychopathological perspective, this corresponds to obsessive
“magical thought”: “if I act in that specific way, everything's going to be fine”.
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The other important phylogenetic process of ritualization concerns intra-specific communicative
cohesion, originated through Darwinian socio-sexual selection pressure (Darwin, 1871). In this regard,
the repetition and exaggeration of ordinary acts for communication may have been promoted by social environmental
selective pressures. Ritual motor synchronization of these “exapted” ordinary or maintenance acts,
further promotes intra-group connection and intra-specific communication, essential to strengthen
and regulate social bonds and, in human cultures, to circulate collective symbols and myths.
We want to emphasize that the “homeostatic” function of individual (non-social) and collective
(social) rituals do not represent divergent evolutionary paths but share a common origin. In fact, both
rituals are “aimed” to environmental control. In social animals (including humans) rituals promote
communication and group cohesion thus predictability of social environment. Therefore, repetition
of non-functional acts deals with environmental unpredictability in non-social contexts and further
enhances communicative bonding in social contexts.
Our hypothesis of rituals (i.e. as an exaptation phenomenon from habitual behavior aimed at
increasing environmental stability under conditions of unpredictability) is not in contrast with
previous evolutionary models (Abed and de Pauw, 1998; Szechtman and Woody, 2004; Boyer and
Lienard, 2006). Rather, the concepts of “security motivation” or “precaution repertoire” systems may
be included in such evolutionary background and contributes to explain the remarkable invariance
and species-specificity of many “contents” of rituals (Dulaney and Fiske, 2004). However, the
present model permits to trace a phylogenetic continuity of rituals through convergent
interdisciplinary data (ethology, anthropology and psychopathology) and to explain an equal
remarkable invariance of formal features of rituals.
The “gap” between biology and culture may be bridged through the assumption that culture, as
“extended phenotype” (Dawkins, 1982), continues the ancient paths followed by biological evolution
(Levi-Straus, 1958; Wickler and Seibt, 1991; Burkert, 1998). We suggest that the “ritual mind”
(Jones, 2013), i.e. the widespread drive to ritualization typical of every culture, is biologically
inherited and goes back to the phylogenetic roots of our species. This does not mean to underestimate
the determinant role of culture in shaping human behavior and mind, due to the high plasticity of our
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brain (Palanza and Parmigiani, 2016). On the one hand, culture is rooted on nature; on the other,
nature is expressed via culture by epigenetic mechanisms in a circular loop (Ridley, 2003).
Motor ritual behavior was the primary development in the evolutionary sequence, with language and
symbolic meanings being secondarily superimposed (Glenberg and Gallese, 2012; Staal, 1989).
Noteworthy, the basic invertebrate and vertebrate neuroscience is converging to a remarkable degree
(Gelperin, 2017). From an evolutionary perspective, the basic principles of cellular, neural network
and behavioral phenotypes (especially those concerned with fixed motor or action patterns which are
essential components of rituals behaviors) appeared very early in the phylogeny of eukaryotic
organisms (i.e. Cnidaria or Coelenterata) and were maintained and conserved congruent in
vertebrates. Therefore, a unitary hypothesis of rituals permits to capture its evolutionary complexity
and stratified structure from ritualized motor behavior up to the myth-ritual constructs with the advent
of symbolic conscience (Tattersall, 2017).
Lastly, we have attempted to bring together data from a variety of disciplines to address the question
of whether a continuity may exist in ritual behavior; we would be the first to admit that we have not
been exhaustive in all the areas we have touched on. We hope that this work will stimulate interdisciplinary
research to contribute to the discussion.
Concluding, ubiquitously rituals, following its biological constraints, work on maintaining a
predictable and ordered (thus safe) environment (social and non-social), facing anxiety-related
unpredictability. In doing so, rituals exert a “homeostatic” function, reassuring that animal and human
cycles carry out according to the “right” order.
References, etc., in the link above.

The effectiveness of hypnosis for pain relief was dependent upon hypnotic suggestibility & use of analgesic imagery, produced 42% & 29% pain reduction in high & medium suggestibles

The effectiveness of hypnosis for pain relief: A systematic review and meta-analysis of 85 controlled experimental trials. Trevor Thompson et al. Neuroscience & Biobehavioral Reviews, Volume 99, April 2019, Pages 298-310. https://doi.org/10.1016/j.neubiorev.2019.02.013

Highlights
• Analgesic effect of hypnosis examined in 85 experimental pain trials.
• Effectiveness was dependent upon hypnotic suggestibility and use of analgesic imagery.
• Hypnosis produced 42% & 29% pain reduction in high & medium suggestibles respectively.
• Minimal benefits found for low suggestibles.

Abstract: The current meta-analysis aimed to quantify the effectiveness of hypnosis for reducing pain and identify factors that influence efficacy. Six major databases were systematically searched for trials comparing hypnotic inductions with no-intervention control conditions on pain ratings, threshold and tolerance using experimentally-evoked pain models in healthy participants. Eighty-five eligible studies (primarily crossover trials) were identified, consisting of 3632 participants (hypnosis nö=ö2892, control nö=ö2646). Random effects meta-analysis found analgesic effects of hypnosis for all pain outcomes (gö=ö0.54-0.76, p’s<.001). Efficacy was strongly influenced by hypnotic suggestibility and use of direct analgesic suggestion. Specifically, optimal pain relief was obtained for hypnosis with direct analgesic suggestion administered to high and medium suggestibles, who respectively demonstrated 42% (pö<ö.001) and 29% (pö<ö.001) clinically meaningful reductions in pain. Minimal benefits were found for low suggestibles. These findings suggest that hypnotic intervention can deliver meaningful pain relief for most people and therefore may be an effective and safe alternative to pharmaceutical intervention. High quality clinical data is, however, needed to establish generalisability in chronic pain populations.

Keywords: PainHypnosisAnalgesiaReviewMeta-analysisSuggestion

Non-invasive neurophysiological measures of learning: A meta-analysis

Non-invasive neurophysiological measures of learning: A meta-analysis. Angelica M.Tinga, Tycho T. de Back, Max M. Louwerse. Neuroscience & Biobehavioral Reviews, Volume 99, April 2019, Pages 59-89. https://doi.org/10.1016/j.neubiorev.2019.02.001

Highlights
• Non-invasive neurophysiology yields large effect sizes in learning over time.
• Effect sizes of learning on neurophysiology are smaller than on behavior.
• Neurophysiology is influenced by individual differences and task-related aspects.
• These results suggest that neurophysiology is an appropriate measure in assessing learning.
• A model on learning, behavior and neurophysiology is proposed to guide future research.

Abstract: In a meta-analysis of 113 experiments we examined neurophysiological outcomes of learning, and the relationship between neurophysiological and behavioral outcomes of learning. Findings showed neurophysiology yielding large effect sizes, with the majority of studies examining electroencephalography and eye-related outcome measures. Effect sizes on neurophysiological outcomes were smaller than effect sizes on behavioral outcomes, however. Neurophysiological outcomes were, but behavioral outcomes were not, influenced by several modulating factors. These factors included the sensory system in which learning took place, number of learning days, whether feedback on performance was provided, and age of participants. Controlling for these factors resulted in the effect size differences between behavior and neurophysiology to disappear. The findings of the current meta-analysis demonstrate that neurophysiology is an appropriate measure in assessing learning, particularly when taking into account factors that could have an influence on neurophysiology. We propose a first model to aid further studies that are needed to examine the exact interplay between learning, neurophysiology, behavior, individual differences, and task-related aspects.

Memories of movement are replayed randomly (like Brownian motion) during sleep in rats

Memories of movement are replayed randomly during sleep. Elisabeth Guggenberger, Institute of Science and Technology Austria. Feb 25 2019. https://idw-online.de/de/news711026

Place cells in hippocampus randomly replay memories of movement in open environments – Study published in Neuron

Sleep is far from an inactive time for the brain: while rats (and humans) are asleep, neurons in the hippocampus fire rapidly. After a rat has repeatedly moved from one spot to another, the same neurons that fired while the rat moved “replay” this firing while the rat is asleep, i.e. they fire in the same, but much quicker, pattern. Previously, it was thought that replay patterns only correspond to trips rats had made repeatedly while awake. Writing in Neuron today, Postdoc Federico Stella and Professor Jozsef Csicsvari at the Institute of Science and Technology Austria (IST Austria), show that also when rats roam around freely, the hippocampus replays during sleep, but it does so in a random manner that resembles the famous Brownian motion known from randomly moving particles.

Place cells are cells in the hippocampus that fire when we (or the rats performing the experiments) are in a certain location. In order to form a memory, to be able to recall it and make a decision, they need to replay the firing pattern during sleep. The replay is easy to see in the data and happens at a fast pace, Csicsvari explains: “When a rat is asleep, the hippocampus is silent. But suddenly, lots of place cells fire, then the hippocampus falls silent again. This firing is very time-compressed. One second of firing activity during wakefulness corresponds to about 10 milliseconds of firing when the animal is asleep.”

Open environment replaces maze

Previous studies focused on replay after rats visited locations in a maze in a certain order. They found that the order in which place cells fire corresponds to the rat’s movement, and this replay pattern was also observed during sleep. In the new study, Csicsvari and Stella instead investigated what happens when a rat moves through an open field environment, like a box. The researchers let the animals run around the environment while they dropped food rewards randomly, all the while recording how up to 400 place cells fire at the same time. They then recorded how the same place cells fired while the rat was asleep.

What they found was unexpected, Csicsvari says. “Neurons fire in places the rat has explored, but the place sequence expressed by the firing follows random trajectories. Surprisingly, these random trajectories are similar to Brownian motion, the random movement seen when particles move, collide and change direction.” A precise statistic defines whether a random process follows Brownian motion or not. “When we did the stats, we found that the replay patterns follow Brownian motion. But this didn’t coincide with the actual movement of the animal – the rat hadn’t run about randomly. Instead, the complex circuit of the hippocampus generates a pattern that is like a simple physical situation.”

Advances in measurement techniques

This new finding was possible only because of the rapid advancement of recording techniques, says Stella. “Five years ago, it was thought that when a rat runs around randomly, only single places are replayed. Now that we can record from hundreds of place cells at the same time, we can distinguish firing between cells that are located close to each other – previously mistaken as the same area firing.”

Replay is an abstraction of experience

The random replay gives researchers an insight into the circuit dynamics of the hippocampus, Csicsvari explains. “In an experimental environment like ours, in which the animals don’t learn about the environment through for example hidden food rewards, the hippocampus generates firing trajectories on its own. Our work shows that the brain circuit itself has a complex dynamic, which influences how neurons fire. Experience probably acts as a constraint on what can possibly be replayed.”

Stella sees random replay as an abstraction of a rat’s experience. “This abstraction could be used for cognitive purposes, such as planning new behavior in the same environment, or for generalizing across different experiences.” In the future, Stella plans to investigate the role of replay in the post-processing of memories as well as how rats can use replay to plan behavior. “How is randomness affected when the rat has an intention? That’s what I’d like to know now.”

Originalpublikation:
Federico Stella, Peter Baracskay, Joseph O’Neill, and Jozsef Csicsvari: Hippocampal Reactivation of Random Trajectories Resembling Brownian Diffusion, Neuron, 2019
DOI: 10.1016/j.neuron.2019.01.052

Weitere Informationen:

A Breakthrough Is Claimed in Systemic Risk Monitoring: Brunetti, Harris and Mankad's Bank Holdings and Systemic Risk

A Breakthrough Is Claimed in Systemic Risk Monitoring. Katherine Heires. GARP, Feb 22, 2019. https://www.garp.org/#!/risk-intelligence/technology/quant-methods/a1Z1W000004nxXBUAY

American University’s Jeffrey Harris and two co-authors say their novel, more timely statistical approach can be applied to sectors beyond banking

More than 10 years since the global financial market meltdown, regulators and central bankers are confident that a stronger and well capitalized banking system is better able to withstand another major systemic shock. Yet proven measures of systemic risk, and particularly predictive tools that cut through market noise and volatility, remain hard to come by.

Bank Holdings and Systemic Risk, a paper published last year on the Federal Reserve Board website, puts forward what its co-authors claim is a unique and effective statistical approach that can monitor for systemic risk in banking. It can also be utilized for tracking change and risk in other complex sectors such as mutual funds, real estate investment trusts (REITs) and broker-dealer holdings.

The approach is based on what the paper calls a novel “statistical model and estimation framework” that regulators can use to “better assess, in a timely manner, concentrated risk within a bank without having to directly examine bank balance sheets. Moreover, the similarity of bank portfolios indicates interconnectedness, an important measure for the propagation of shocks.”

[...] Plans are under way to improve and expand upon the initial research and validation testing, with an updated paper to be released this summer.

“Many of the regulations we currently have in place in the financial sector somehow miss many of the risks out there in the real world,” says Prof. Harris, who served from September 2017 through May 2018 as the Securities and Exchange Commission's chief economist and director of its Division of Economic and Risk Analysis (DERA).

“If we can shed new light on those financial institutions and the obligations or counterparty obligations that they hold,“ Harris adds, “the better it will be. This paper is a way to add to the multiple dimensions of risk management out there.”

Past Attempts

Academics and official and government bodies such as the Financial Stability Board, the SEC's DERA and U.S. Treasury Office of Financial Research (OFR) have been hard at work on systemic risk indicators and tools. Pre-existing literature on the subject was compiled in a January 2012 paper, the first in the OFR's working paper series, by Massachusetts Institute of Technology professor Andrew Lo and three co-authors. A Financial Stress Index and Financial System Vulnerabilities Monitor are among the monitoring tools subsequently developed and maintained by the OFR.

[...]

Balance-Sheet Estimates

Brunetti, Harris and Mankad propose a new statistical method estimating the portfolio concentration or stock returns on balance sheet within each bank, along with an estimate of the common asset holdings across all banks. The former provides a measure of each bank's asset diversification; the latter, an indication the overall banking system's susceptibility to shocks.

It relies on an analysis of daily inter-bank trades and stock returns for individual banks and across all banks, culled from the e-MID European interbank deposit market, and publicly available stock return data, culled from annual reports and other, more current sources.

What's new about this approach, Harris explains, is that it focuses on the asset side of the balance sheet and identifies the concentration risk within each bank – the degree of concentration in one or a few assets. Other approaches tend to focus on the liability side or on capital adequacy, which is what the MES (marginal expected shortfall) and SRISK systemic risk monitoring approaches tend to do.

Faster Readings

Harris and his co-authors, in their paper, describe the asset-based approach as “more timely” and “a robust forecasting tool.”

They say that their testing indicates that the standard deviation and skewness of their measures generally lead, or are more predictive than, data published by the European Central Bank – the Composite Systemic Risk Index, the Simultaneous Default Probability and Sovereign Composite Systemic Risk Index, as well as EU macroeconomic indicators such as the Consumer Confidence Index (CCI) and Purchasing Managers' Index (PMI).

Harris says that risk insights can be produced with greater frequency than with quarterly or annual bank earnings statements.

“Instead of waiting for a quarterly report, you can see the buildup of risks within a bank much earlier,” Harris says. “This allows an auditor or central bank to investigate bank holdings and financial stability before the next quarter comes around,” and before significant risk starts to build up.

One factor contributing to the new formulation is the fact that “we now have access to incrementally better data about the interbank market, and so, any central bank would be able to replicate our approach.” However, Harris cautions that the e-MID does not provide 100% of market data related to the European bank sector, but rather 30% of interbank data in the European sphere. This limitation is overcome with machine learning tools.

Bayesian Framework

As described in the paper, the approach involves eight categories of bank data – cash, commercial loans, intangible assets, interbank assets, residential loans, investments, other holdings and remainder holdings.

A “novel Bayesian estimation framework” utilizes the two sets of data: stock returns and interbank lending data. This allows for the creation of a concentration index, which captures the degree of diversification of each bank's portfolio, and a similarity index, which captures how similar portfolio holdings are across banks.

“We view these two as indicators of system risk,” Harris says.

This data enables a “daily assessment of whether banks are strong or weak and what asset classes may be pushing them into a position of strength or weakness,” Harris says.  Regulators may prefer to assess monthly tallies.

Finally, the authors have tested and validated their approach from both a statistical perspective through various simulation exercises, and from an accounting perspective.

Technological Assist

Charles Kane, a senior lecturer at MIT Sloan, says that new approaches for monitoring systemic risk are welcome.

“What the developers of this new approach and others are trying to do now is apply the newest technology to be able to measure risk as quickly as possible,” Kane says. “I applaud any new technology or technology-based approach that can measure the liquidity of banking institutions.” He believes that aside from regulators, credit rating agencies could benefit.

Sam Malone, director of research at Moody's Analytics (not the credit rating business of Moody's Investors Service), says, “This new approach is a good idea because it allows for greater frequency in systemic risk measurement.” He also applauds the use of bank stock returns as a data input, something that Moody's employs in its own Systemic Risk Monitor tool, and the triangulation of this information with interbank trading data.

“When the credit cycle begins to turn, which it soon will in the U.S. and is already happening in China, we will need tools such as these to help us get a handle on what is going on,” Malone says.

European Research

Another recently proposed systemic risk monitor, with a standard set of financial stability indicators, is in “A new financial stability risk index to predict the near-term risk of recession,” a European Central Bank paper by senior financial stability expert Peter Welz and two others.

A 2016 paper from Paolo Giudici of the University of Pavia, Italy, and two others, “The multivariate nature of systemic risk: direct and common exposure,” looks at network structures as a way of identifying systemic risk in the integrated design of financial systems.

Sean Campbell, executive vice president and director of policy research at the Financial Services Forum, which represents the biggest, diversified U.S. financial institutions, believes that a clear definition of systemic risk and its causes – a prerequisite for better monitoring tools – is still lacking.

“We should be more demanding of the regulators,” Campbell insists, “asking them to explain more precisely what they mean by systemic risk. When we talk about bank capital, we know exactly what we mean, and when we talk about volatility, we know the meaning, but in the context of systemic risk, we are still in the early days of understanding.”

Campbell says he does appreciate efforts to produce “a more evidence-based way of assessing for systemic risk.”

Policy Limitations

In a forthcoming American Economic Review article, “Macroprudential Policy: What We've Learned, Don't Know and Need to Do,” Kristin J. Forbes, Jerome and Dorothy Lemelson professor of management at the MIT Sloan School, considers whether policymakers have done enough to prevent the next crisis.

“There are key issues around macroprudential policy about which we do not have sufficient understanding, such as on the new risks generated from the leakages and spillovers, on how to calibrate the different regulations (especially given political incentives), and on the potential risks to financial stability outside the mandates for most macroprudential authorities,” Forbes writes.

MIT's Kane says that no single approach is adequate to this complex task, and we still need to measure the sustainability, credit ratios and liability side of the banks' balance sheets and regulatory policies to realize the overall risk.

The Brunetti-Harris-Mankad framework is “not a silver bullet,” Kane says, noting that it is more focused on commercial banking as opposed to investment banking, where sophisticated, hard-to-measure derivative instruments can be a source of extreme risk.

Leverage and Stress Testing

Malone of Moody's Analytics says one limitation of the asset-based approach – in its initial iteration and testing – is that it does not look closely at leveraged loan activity in the U.S. and the way in which “as an asset class, we have seen a suboptimal amount of crowding,” a trend of concern to systemic risk watchers.

“It would be wonderful if they could extend their assessment and look at the rising risk in the leveraged loan asset class in the U.S., how U.S. banks' exposure is evolving in this area, and how this activity may be interconnected,” Malone says.

He believes that any thorough effort to monitor for systemic risk would require the inclusion of systemic risk metrics with U.S. CCAR regulatory stress tests. “It is curious that we haven't seen that,” Malone says.

Complementary Strengths

Kane says he is concerned about rising risks in the insurance sector, shadow banking, fintech and in cryptocurrency markets, and whether approaches are or are not being developed to measure such risks that may rise to the level of systemic concern.

Harris and colleagues acknowledge their approach's limitations, which they intend to address in future testing and iterations. The initial testing was limited to an analysis of 40 to 60 European banks. Future tests will include larger quantities of data specific to the U.S. banking system.

Harris is optimistic about the new tool's ability to advance systemic risk monitoring within banks, in particular when it is used in combination with approaches that monitor for network effects and interconnectedness.

“Our methods complement other approaches for assessing systemic risk that build on network science techniques,” Harris says, which is important at a time when both banks and regulators consume and analyze massive quantities of data.

“Integrating data from myriad products across various regulated and unregulated markets remains a significant challenge,” Harris says, adding that this new method provides a practical means for assessing complex financial institutions that trade hundreds of financial products in markets around the world.

[...]