Brain Scans Predict When People Will Buy Products

Science Daily — For the first time, researchers have used functional
magnetic resonance imaging (fMRI) to determine what parts of the
brain are active when people consider whether to purchase a product
and to predict whether or not they ultimately choose to buy the
product. The study appears in the journal Neuron and was co-authored
by scientists at Carnegie Mellon University, Stanford University and
the MIT Sloan School of Management.

This paper is the latest from the emerging field of neuroeconomics,
which investigates the mental and neural processes that drive
economic decision-making. The results could have a profound impact on
economic theory, because the decision of whether to purchase a
product is the most basic and pervasive economic behavior.

Previous imaging studies have found that separate parts of the brain
are activated when people are confronted with financial gains versus
financial losses. The authors of this latest study believed that
distinct brain regions would be activated when people were presented
with products they wish to purchase (representing a potential gain)
and when they were presented with those products' prices
(representing a potential loss). The researchers wanted to see if
they could then use this information to predict when a person would
decide to buy a product, and when they would pass it up.

Twenty-six adults participated in the study, in which they were given
$20 to spend on a series of products that would be shipped to them.
If they made no purchases, they would be able to keep the money. The
products and their prices appeared on a computer screen that the
participants viewed while lying in an fMRI scanner. The researchers
found that when the participants were presented with the products, a
subcortal brain region known as the nucleus accumbens that is
associated with the anticipation of pleasure was activated. When the
subjects were presented with prices that were excessive, two things
happened: the brain region known as the insula was activated and a
part of the brain associated with balancing gains versus losses --
the medial prefrontal cortex -- was deactivated.

Furthermore, by studying which regions were activated, the authors
were able to successfully predict whether the study participants
would decide to purchase each item. Activations of the regions
associated with product preference and with weighing gains and losses
indicated that a person would decide to purchase a product. In
contrast, when the region associated with excessive prices was
activated participants chose not to buy a product.

This study challenges the conventional economic account of consumer
purchases, which views consumers as deciding between the immediate
pleasure of making a purchase and the delayed pleasures of
alternative things for which the same money could be used. The
results of this paper support an alternative perspective that views
consumers as trading off the immediate pleasure of making a purchase
against an immediate pain: the pain of forking out the money for the
item. The results can explain the growing tendency of consumers to
overspend when purchasing items with credit cards instead of cash,
because consumers do not immediately pay for items charged to credit
cards and the "pain" of the potential loss is minimized. Economic
policies designed to promote savings would thus need to take this
into account. It also suggests that differences in how much people
spend and save may be partly explained by differences in the degree
to which they find spending money painful.

The Neuron paper was authored by Scott Rick and George Loewenstein of
the Department of Social and Decisions Sciences at Carnegie Mellon;
Brian Knutson and G. Elliott Wimmer of the Department of Psychology
at Stanford; and Drazen Prelec at MIT's Sloan School of Management.

Note: This story has been adapted from a news release issued by
Carnegie Mellon University.

http://www.sciencedaily.com/releases/2007/01/070103201418.htm