All the people who watch financial news channels and then decide how to invest are probably thinking less than those who do not watch those shows. Brain scans show expert advice reduces brain activity in areas active when doing decision-making.
ATLANTA– A study using functional magnetic resonance imaging (fMRI) shows that expert advice may shut down areas of the brain responsible for decision-making processes, particularly when individuals are trying to evaluate a situation where risk is involved. The study was published in the March 2009 issue of the Public Library of Science (PLOS One).
People just say "Hey, I got answers. I can stop thinking about it." There's a lesson here.
Study participants were asked to make a series of financial choices between a guaranteed payment and a lottery while undergoing fMRI 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.
"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 Jan B. Engelmann, PhD, Emory research fellow in the Department of Psychiatry and Behavioral Sciences, and first author of the study.
"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," explains C. Monica Capra, PhD, an economist in the Department of Economics at Emory and coauthor of the study.
"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."
It is hard to know whether someone is an expert. Those confident-sounding types might just be wishful bettors. Sometimes they stand to profit if they can get more people to listen to them and so they strive to sound credible.
You can not escape the need to think - at least not without paying a price.
|Share |||Randall Parker, 2009 March 24 10:58 PM Brain Economics|