Letting your brain off the financial hook

EMORY (US)—In times of uncertainty, such as an economic recession, many people feel unqualified to sort out the implications of their financial decisions. A recent brain imaging study sheds light on how we can sometimes suspend judgment when guided by an “expert.”

Led by Emory University psychiatrist and neuroeconomist Gregory Berns, researchers investigated the neural mechanisms through which advice is integrated into the financial decision-making process. The results were published recently in Public Library of Science (PLOS) One.

“While the field of neuroeconomics has made progress in understanding the neurobiological basis of risky decision-making, the neural mechanisms through which external information is integrated in that process had not been studied before this,” says Berns.

Study participants were asked to make a series of financial choices between a guaranteed payment and a lottery while undergoing fMRI (functional magnetic resonance imaging) scanning. During portions of the testing, the participants had to make decisions on their own; during other portions, they received advice from a “financial expert” about which choice to make.

If the advice test subjects received was labeled as coming from an expert, the decision-making and risk-evaluating parts of their brains tended to shut down.

“Results showed that brain regions consistent with decision-making were active in participants when making choices on their own; however, there occurred an offloading of the decision-making process in the presence of expert advice,” says researcher Jan B. Engelmann.

“The expert provided very conservative advice, which in our experiment did not lead to the highest earnings. But the brain activation results suggested that the offloading of decision making was driven by trust in the expert,” adds economist C. Monica Capra.

“This study indicates that the brain relinquishes responsibility when a trusted authority provides expertise, ” says Berns. “The problem with this tendency is that it can work to a person’s detriment if the trusted source turns out to be incompetent or corrupt.”

Other researchers involved in the study include Charles Noussair, Department of Economics, Tilburg University, Netherlands. The study was funded by a grant from the National Institute on Drug Abuse.

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