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)... ... , ... On June 10-11, 2016, A Forever Recovery, a holistic treatment center ... Breakfast Table in Battle Creek, MI, where the rehabilitation facility is located. This annual ... the world’s leading providers of cereal and other breakfast foods. Its residents often refer ...
(Date:6/25/2016)... , ... June 25, 2016 , ... ... policy issues and applications at AcademyHealth’s Annual Research Meeting June 26-28, 2016, at ... on several important health care topics including advance care planning, healthcare costs and ...
(Date:6/25/2016)... ... 25, 2016 , ... As a lifelong Southern Californian, Dr. Omkar Marathe earned ... the David Geffen School of Medicine at UCLA. He trained in Internal Medicine at ... fellowship in hematology/oncology at the UCLA-Olive View-Cedars Sinai program where he had the opportunity ...
(Date:6/24/2016)... (PRWEB) , ... June 24, 2016 , ... Those who ... with these feelings, many turn to unhealthy avenues, such as drug or alcohol abuse, ... Marne, Michigan, has released tools for healthy coping following a traumatic event. , Trauma ...
(Date:6/24/2016)... ... June 24, 2016 , ... Dr. Amanda Cheng, ... treatment. Dr. Cheng has extensive experience with all areas of orthodontics, including robotic ... osteogenic orthodontics. , Micro-osteoperforation is a revolutionary adjunct to orthodontic treatment. It ...
Breaking Medicine News(10 mins):
(Date:6/24/2016)... Research and Markets has announced the ... Tests" report to their offering. ... The World Market for Companion Diagnostics covers the ... analysis in the report includes the following: ... Kits) by Region (N. America, EU, ROW), 2015-2020 , ...
(Date:6/24/2016)... Belgium , June 24, 2016 ... the appointment of Dr. Edward Futcher ... Non-Executive Director, effective June 23, 2016.Dr. Futcher was ... Nominations and Governance Committees.  As a non-executive member ... independent expertise and strategic counsel to VolitionRx in ...
(Date:6/23/2016)... , June 23, 2016 Research ... Devices Global Market - Forecast to 2022" report to ... the treatment method for the patients with kidney failure, it ... excess fluid from the patient,s blood and thus the treatment ... potassium and chloride in balance. Increasing number ...
Breaking Medicine Technology: