Navigation Links
'Fear of Losing' Key Emotion in Economic Decisions
Date:9/25/2008

Brain imaging reveals why some people can't resist paying too much at auctions

THURSDAY, Sept. 25 (HealthDay News) -- The fear of losing is why people tend to overpay for items bought in an auction, a new study says.

Neuroscientists and economists at New York University reached this conclusion by combining brain imaging techniques with behavioral economic research. Their findings were published in the Sept. 26 issue of Science.

The researchers, using functional magnetic resonance imaging (fMRI), examined brain activity in people playing an auction game with a partner, or a lottery game. While participants could win or lose money in either game, winning at the auction depended on outbidding a partner. Activity in the striatum, part of the brain's reward circuitry, appeared exaggerated during losses in the auction game. The magnitude of this change matched the tendency to overbid, suggesting that the possibility of losing in a social competition, such as an auction, may lead people to bid "too high."

A follow-up behavioral economic study, in which groups played an auction game against a partner under different circumstances, found similar results.

"Such a result would not have been predicted by existing economic theory. While there have been investigations of overbidding which have attributed the phenomenon to either risk aversion or the 'joy of winning,' it was the use of imaging data which allowed us to distinguish between these conflicting explanations and actually arrive at a new and different one, the 'fear of losing.' Our results provide evidence of how an understanding of the neural systems of economic behavior might inform economic theory," researcher Andrew Schotter, a professor in NYU's Department of Economics, said in a university news release.

Neuroscientist Elizabeth Phelps, an NYU professor involved in the research, added: "These results highlight a role for the contemplation of social loss in understanding the tendency to bid 'too high' in auctions and emphasize the importance of considering social factors in economic decisions. By combining neuroeconomic and behavioral economic techniques, we were able to provide novel insight into a classic economic problem."

More information

The U.S. National Institute of Neurological Disorders and Stroke has more about how the brain works.



-- Kevin McKeever



SOURCE: New York University, news release, Sept. 25, 2008


'/>"/>
Copyright©2008 ScoutNews,LLC.
All rights reserved

Related medicine news :

1. Teens failure to use condoms linked to partner disapproval, fear of less sexual pleasure
2. Laser Treatment Removes 'Fear Factor' From Gum Disease
3. UK Physicians Fear New Revalidation Procedures Will Reduce Morale, Decrease Time with Patients and Belittle GP Professionalism, According to New TNS Healthcare Research
4. Whom do we fear or trust?
5. African American-Owned Condom Company Fears the Widening AIDS Epidemic
6. Alleviating the fear of falling
7. Canine Cancer #1 Fear of Dog Lovers; Web Exclusive By Morris Animal Foundation Provides News on Latest Breakthroughs - Crucial Facts for Dog Owners
8. Rutgers research identifies brain cells related to fear
9. Guardian Survey: Fear of Losing Income Due to the Economy Equals Fear of Losing Income Due to Disability
10. Drinking Dampens Ability to Feel Fear
11. Genes Influence on Fears Changes Over Time
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:6/26/2016)... Lake Orion, Clarkston, Michigan (PRWEB) , ... June ... ... direction with respect to fertility once they have been diagnosed with endometriosis. These ... tolerable intercourse but they also require a comprehensive approach that can help for ...
(Date:6/25/2016)... FL (PRWEB) , ... June 25, 2016 , ... The temporary closing of Bruton Memorial ... Plant City Observer , brings up a new, often overlooked aspect of head lice: the ... closing for fumigation is not a common occurrence, but a necessary one in the event ...
(Date:6/25/2016)... ... June 25, 2016 , ... As a lifelong Southern Californian, Dr. Omkar Marathe ... from the David Geffen School of Medicine at UCLA. He trained in Internal Medicine ... his fellowship in hematology/oncology at the UCLA-Olive View-Cedars Sinai program where he had the ...
(Date:6/25/2016)... Montreal, Canada (PRWEB) , ... June 25, 2016 , ... ... the pursuit of success. In terms of the latter, setting the bar too high ... low, risk more than just slow progress toward their goal. , Research from ...
(Date:6/24/2016)... ... 2016 , ... June 19, 2016 is World Sickle Cell Observance Day. In ... benefits of holistic treatments, Serenity Recovery Center of Marne, Michigan, has issued ... Sickle Cell Disease (SCD) is a disorder of the red blood cells, which can ...
Breaking Medicine News(10 mins):
(Date:6/23/2016)... June 23, 2016 Roche (SIX: RO, ROG; ... for its Elecsys BRAHMS PCT (procalcitonin) assay as a ... septic shock. With this clearance, Roche is the first ... integrated solution for sepsis risk assessment and management. ... infection and PCT levels in blood can aid clinicians ...
(Date:6/23/2016)... Capricor Therapeutics, Inc. ... company focused on the discovery, development and commercialization ... in its ongoing randomized HOPE-Duchenne clinical trial (Halt ... its 24-patient target. Capricor expects the trial to ... 2016, and to report top line data from ...
(Date:6/23/2016)... -- Bracket , a leading clinical trial technology and ... platform, Bracket eCOA (SM) 6.0, at the 52 nd ... 2016 in Philadelphia , Pennsylvania.  A demonstration ... of its kind to fully integrate with RTSM, will be ... is a flexible platform for electronic clinical outcomes assessments that ...
Breaking Medicine Technology: