A research team led by Stanford University neuroscientist Brian Knutson has identified the parts of the human brain that respond when presented with a product and those that then act as we decide on whether or not to purchase it. The group reports its findings in this week's issue of Neuron.
According to Knutson, he and his colleagues set out to determine whether "thinking about potential good and bad outcomes actually influences behavior." By scanning subjects' brains using functional magnetic resonance imaging (fMRI), the researcher found that, in fact, weighing possible outcomes does influence decision making. "This is the first study to show that you can use brain activation alone to predict purchasing on a trial-by-trial basis," proclaims Knutson.
Twenty-six subjects were scanned while they took part in a task called SHOP, short for "Save Holdings Or Purchase." A product, such as a box of Godiva chocolates or a DVD of the popular TV show The Simpsons, would be displayed on a screen in front of them. After four seconds, a price would be shown below the item. Four seconds later, a box would appear on each side of the screen--one labeled "YES," the other labeled "NO"--at which point the participant decided whether to buy or to pass on the product.
The YES and NO boxes randomly switched positions during each of the 80 trials, so that there would be no rehearsed movements once a subject saw an item. Most trials were virtual, but two randomly selected sales were real, allowing volunteers, who received $20 at the outset of the experiment, to actually obtain those items.
Researchers discovered that when the product first flashed on the screen it activated the nucleus accumbens, a section near the middle of the brain that has been implicated in the brain's reward center, effectively appraising the item. When the price appeared, the scientists noticed activity in the mesial prefrontal cortex, a region of the brain known for higher executive functions. Its activity seemed to vary according to the difference between what someone would pay for an item and its actual cost, as if in error adjustment. Finally, the response of the insula (a lateral section of the brain's cortex known to activate during responses to negative stimuli) depended on the purchasing decision--activity there increased when a participant nixed a purchase. "What we're looking at is not so much the brain's reaction to products and prices as a person's subjective reaction to the products and prices," Knutson says. "Is the product preferable? And is the price too much?"
Colin Camerer, a Caltech economist, says the findings of the paper illustrate what behavioral economists label "transaction utility"--"the special pleasure or pain we get from knowing we got a good deal or got ripped off"--because of the response of the insula, the region associated with negative emotions like disgust. "This shows there is an automatic 'is it worth it?' process," he says, "that has a rapid emotional reaction if the answer is 'no.'"
Knutson says this network of reactions can help neuroeconomists better understand what happens to shoppers when they use credit cards, a behavior many economists characterize as disadvantageous (not to mention, risky) because it encourages overspending and under-saving.
"[This] provides the tools for making hypotheses," Knutson remarks. "Maybe [a shopper's] insula isn't engaged when they're using credit cards." Or rather, he adds, maybe the mesial prefrontal cortex is more activated when a person encounters a "for sale" sign.