Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Financial advice causes 'off-loading' in the brain

25.03.2009
Researchers used functional magnetic resonance imaging (fMRI) in a study to determine the neural mechanisms involved in financial decision-making under risk when a financial expert gives advice.

Study findings show that expert advice suppresses areas of the brain responsible for making value judgments. Conversely, those regions of the brain show activity when outside advice is not involved in the decision-making process.

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).

During times of uncertainty such as an economic recession, many people feel unqualified to sort out the implications of their financial decisions. Often they will seek the advice of a consultant on what choices to make.

In a study led by Gregory Berns, MD, PhD, professor of neuroeconomics and psychiatry at Emory University School of Medicine, researchers investigated the neural mechanisms through which advice is integrated into the financial decision making process.

"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 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."

Berns is the Emory Distinguished Chair of Neuroeconomics and leads the Center for Neuropolicy at Emory University. Scientists at the Center for Neuropolicy focus on how the biology of the brain influences decision-making in politics, policy and business.

Other researchers involved in the study include Charles Noussair, Department of Economics, Tilburg University, Netherlands.

This study was funded by a grant from the National Institute on Drug Abuse (NIDA).

Reference: Expert Financial Advice Neurobiologically "Offloads" Financial Decision-Making under Risk; PLoS One http://dx.plos.org/10.1371/journal.pone.0004957

The Robert W. Woodruff Health Sciences Center of Emory University is an academic health science and service center focused on missions of teaching, research, health care and public service. Its components include schools of medicine, nursing, and public health; Yerkes National Primate Research Center; the Emory Winship Cancer Institute; and Emory Healthcare, the largest, most comprehensive health system in Georgia. The Woodruff Health Sciences Center has a $2.3 billion budget, 17,000 employees, 2,300 full-time and 1,900 affiliated faculty, 4,300 students and trainees, and a $4.9 billion economic impact on metro Atlanta.

Kathi Baker | EurekAlert!
Further information:
http://www.emory.edu

More articles from Studies and Analyses:

nachricht New study: How does Europe become a leading player for software and IT services?
03.04.2017 | Fraunhofer-Institut für System- und Innovationsforschung (ISI)

nachricht Reusable carbon nanotubes could be the water filter of the future, says RIT study
30.03.2017 | Rochester Institute of Technology

All articles from Studies and Analyses >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Wafer-thin Magnetic Materials Developed for Future Quantum Technologies

Two-dimensional magnetic structures are regarded as a promising material for new types of data storage, since the magnetic properties of individual molecular building blocks can be investigated and modified. For the first time, researchers have now produced a wafer-thin ferrimagnet, in which molecules with different magnetic centers arrange themselves on a gold surface to form a checkerboard pattern. Scientists at the Swiss Nanoscience Institute at the University of Basel and the Paul Scherrer Institute published their findings in the journal Nature Communications.

Ferrimagnets are composed of two centers which are magnetized at different strengths and point in opposing directions. Two-dimensional, quasi-flat ferrimagnets...

Im Focus: World's thinnest hologram paves path to new 3-D world

Nano-hologram paves way for integration of 3-D holography into everyday electronics

An Australian-Chinese research team has created the world's thinnest hologram, paving the way towards the integration of 3D holography into everyday...

Im Focus: Using graphene to create quantum bits

In the race to produce a quantum computer, a number of projects are seeking a way to create quantum bits -- or qubits -- that are stable, meaning they are not much affected by changes in their environment. This normally needs highly nonlinear non-dissipative elements capable of functioning at very low temperatures.

In pursuit of this goal, researchers at EPFL's Laboratory of Photonics and Quantum Measurements LPQM (STI/SB), have investigated a nonlinear graphene-based...

Im Focus: Bacteria harness the lotus effect to protect themselves

Biofilms: Researchers find the causes of water-repelling properties

Dental plaque and the viscous brown slime in drainpipes are two familiar examples of bacterial biofilms. Removing such bacterial depositions from surfaces is...

Im Focus: Hydrogen Bonds Directly Detected for the First Time

For the first time, scientists have succeeded in studying the strength of hydrogen bonds in a single molecule using an atomic force microscope. Researchers from the University of Basel’s Swiss Nanoscience Institute network have reported the results in the journal Science Advances.

Hydrogen is the most common element in the universe and is an integral part of almost all organic compounds. Molecules and sections of macromolecules are...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Dortmund MST Conference presents Individualized Healthcare Solutions with micro and nanotechnology

22.05.2017 | Event News

Innovation 4.0: Shaping a humane fourth industrial revolution

17.05.2017 | Event News

Media accreditation opens for historic year at European Health Forum Gastein

16.05.2017 | Event News

 
Latest News

New approach to revolutionize the production of molecular hydrogen

22.05.2017 | Materials Sciences

Scientists enlist engineered protein to battle the MERS virus

22.05.2017 | Life Sciences

Experts explain origins of topographic relief on Earth, Mars and Titan

22.05.2017 | Physics and Astronomy

VideoLinks
B2B-VideoLinks
More VideoLinks >>>