Money Talks: A Brain Image of a Microeconomic Theory

Poor people get it faster than wealthier ones when there is a small financial reward
man finds money

The microeconomic law of diminishing marginal utility states that while accumulating a good—pretzels, pencils, nickels, whatever—each successive unit of that good will be less satisfying to acquire than the one before it. Finding a shiny quarter on the street is a real thrill. But, if you are carrying around a bag of coins, acquiring another one does not seem nearly as exciting. In fact, would you even bother to pick it up?

That hesitation is what researchers at the University of Cambridge in England were banking on when they designed a study to see if the haves catch on more slowly than the have-nots when it comes to reward-based learning. Reporting in the current issue of Neuron, the scientists reveal that when a small sum of money is on the line, poorer people learn quickly how to maximize their profits, leaving their wealthier counterparts in the dust.

In a Pavlovian paradigm, a number of abstract shapes flashed in front of 14 participants. After each shape appeared for three seconds, a picture of either a 20-pence coin (roughly 40 cents) or a scrambled image followed. A card of one particular shape was always followed by the coin, and subjects were told that they could take a 20-pence piece home if they could accurately predict when the money card was the next one up.

The participants had in personal assets an average of about $1,700 in their bank accounts, which ranged from zero to nearly $6,000. The group's average income was just over $20,000, spanning from no income for students to the equivalent of about $60,000 for the most well-off of the bunch.

By measuring response time, the researchers got a sense of how quickly people learned which one of the abstract pictures indicated money would follow. They noticed an inverse correlation between how much money a person had (assets and income) and the swiftness with which they were conditioned. The poorer people tended to figure out which card signaled money ahead within about 12 trials, says neurobiologist Philippe Tobler, the study's lead author, whereas the richer people took about 35 trials.

The team next repeated the experiment while the subject's brains were scanned by an fMRI (functional magnetic resonance imaging) machine. Researchers focused their scans on the midbrain (which contains neurons or nerve cells that produce dopamine, a neurotransmitter central to reward-based learning), and the striatum, another reward-based center located under the cerebral cortex. This time, however, the participants did not have to physically respond. "We didn't want them to do that because there are neurons in the striatum that are responding to initiate an action of responding to reward," Tobler says. It was this response preparation that the researchers timed.

Once again, an inverse association between wealth and learning appeared, with poor people displaying more increased activity in the midbrain and striatum when compared with the more affluent subjects.

Tobler says the study, which is one of the first to try to measure marginal utility in a laboratory setting, challenges the notion held by many economists that utility comparisons cannot be made between people, because they likely value objects differently. He says, however, "It is possible that these kinds of comparisons are more easily done with money, because money is on an absolute scale." A $20 bill is worth the same no matter who had it, but one person might value it more.

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