Normalized value coding explains dynamic adaptation in the human valuation process.

The notion of subjective value is central to choice theories in ecology, economics, and psychology, serving as an integrated decision variable by which options are compared. Subjective value is often assumed to be an absolute quantity, determined in a static manner by the properties of an individual option. Recent neurobiological studies, however, have shown that neural value coding dynamically adapts to the statistics of the recent reward environment, introducing an intrinsic temporal context dependence into the neural representation of value. Whether valuation exhibits this kind of dynamic adaptation at the behavioral level is unknown. Here, we show that the valuation process in human subjects adapts to the history of previous values, with current valuations varying inversely with the average value of recently observed items. The dynamics of this adaptive valuation are captured by divisive normalization, linking these temporal context effects to spatial context effects in decision making as well as spatial and temporal context effects in perception. These findings suggest that adaptation is a universal feature of neural information processing and offer a unifying explanation for contextual phenomena in fields ranging from visual psychophysics to economic choice.