The Frontal Cortex

Reason, Emotion and Consumption

One of the frustrations with writing a science book is that you keep on bumping into brand new research that you want to include. That’s precisely what happened to me when I read this just published paper in the Journal of Consumer Research by Leonard Lee, Dan Ariely, and On Amir. The behavioral economists were interested in evaluating which decision-making system – the slow rational, deliberate approach (System 1) or the fast, emotional, instinctive approach (System 2) – was best suited for everyday consumer choices. The question, of course, is how one defines a “superior” decision. Who’s to say whether it’s better to pick Honey Nut Cheerios or Lucky Charms? Or if Diesel jeans are better than discounted Levis? In other words, how can one judge decisions when those decisions reflect individual preferences?

This is why the researchers chose to rely on consumer consistency. I’ll let them explain:

When faced with a choice task, consumers need to evaluate the overall utility of each of
the alternatives they are facing and compare these utilities in order to make their final choice. Such a utility computation process is likely to vary from case to case based on the exact information consumers consider, the particular facts they retrieve from their memories, as well as the particular computations that they carry out; any of these process components is a potential source for decision inconsistency. For example, when shopping for a new Nikon digital camera, it is possible that consumers might change the aspects of the camera they focus on, the particular information they retrieve from memory, the relative importance weights they assign to the attributes, or the process of integrating these weights.

As researchers, we often treat such inconsistencies as ―noise‖ and use statistical inference tools that allow us to examine the data while mostly ignoring these fluctuations. Yet, such noise can convey important information about the ability of the decision maker to perform good decisions, and, in particular, it can reflect their ability to conceptualize their own preferences. In the current work we focus on such inconsistencies / noise in decision making as indicators of the ease in which consumers can formulate their preferences: we focus on the question of whether
the cognitive or emotional decisions are more prone to this kind of error.

In other words, they don’t care whether or not you prefer Cheerios to Lucky Charms. They just want to make sure you pick Cheerios every time.

Their experimental setup was straightforward. The behavioral economists set up three distinct choice environments, which allowed them to subtly bias the decision-making approach of the subjects. For instance, in condition two the volunteers were forced to memorize a long random string of numbers, which took up valuable cognitive space in working memory. There’s a large body of evidence that such random digits make it harder to engage in “rational” thought, and thus make it more likely for people to rely on their emotional system. The researchers then had subjects choose between a series of paired objects. For instance, people were given a choice between a “Quick Release Micro-Light Keychain” and a “Voice Recording Keychain with LED”.

What did they find? In all three conditions, subjects who relied more on their emotional system made a more consistent set of decisions. In other words, the property of transitivity – which, along with “completeness” is one of the basic assumptions of rational preference relations in economic theory – seems to depend not on rational thought processes but on those subtle emotional signals emanating from the limbic system. Here’s the irony: In order to behave like a “rational agent” one needs to rely on the emotional brain.

For the consumers, contrary to lay perceptions, attending to one’s emotional responses
may prove to be very valuable in understanding one’s preferences. It is possible consumers would be much happier with choices based more on their emotional reaction. For example, if one buys a house and relies on very cognitive attributes such as resale value, one may not be as happy actually living in it, as opposed to a person who attends to his or her emotional reaction to the house prior to purchasing it. Indeed, our results suggest that the heart can very well serve as a more reliable compass to greater long-term happiness than pure reason.

One additional interesting implication of this research is how online shopping might influence our decision-making process. The scientists speculate that the internet leads consumers to engage in more rational deliberation, since there are fewer affective cues. (This certainly fits with my own experience – before I buy something online, I always check the price at other stores, read consumer reviews, etc.) And yet, this sort of thinking might also lead to consumer inconsistency.

Thanks to Mo for the tip!

Comments

  1. #1 hegemonicon
    February 24, 2009

    The part of our brain that makes us happy seems like its separate from the part that does rational thinking. (Its probably tied to some function that regulates our desires, but thats just a guess). Obviously we don’t know how they directly interact, but what seems likely is that when something makes us happy, our rationality takes that into account when making a decision. (I believe there’s research that shows the rational part of our brain doesn’t show any activation until after we’ve made a decision, though I don’t know the quality of it.) Normally our happy section is a pretty good judge (for whatever reason), so there’s no conflict.

    But sometimes our rationality overrides our happy section. When this happens it can’t just tell the happy section to “Be happy” anymore than you can tell your body “Send more dopamine to the brain”. The brain apparently doesn’t work that way. So we’re left being unhappy with our perfectly rational decision.

    Of course, I don’t actually know anything about neuroscience, so don’t take this too seriously.

  2. #2 Ally
    February 25, 2009

    This was a very interesting and useful article to be introduced to, particularly the distinction between “the slow rational, deliberate approach (System 1)” and “the fast, emotional, instinctive approach (System 2). Neuroscience informs us that while emotional regulation takes place in the limbic system, emotions themselves are located throughout much of the frontal lobe as a whole (though I am not informed about emotions being located in the “reptilian” brain – brain stem.)

    The limbic system, prefrontal cortex, and brain stem are interdependent upon one another in ways that are often unconscious to us. I’m wondering why the emotional influence on decision-making isn’t discussed in terms of degree of emotion, rather than the chopping board approach to overly simplify the distinction between emotion and logic? The notion that people make decisions based on emotions or logic is too simplistic I believe. Although this study is informative and offers results that are useful to science and possibly marketing agents, it would be interesting to see a similar study discussed on this blog that doesn’t segregate emotion from logic, a study that highlights findings that suggest there is no such thing as pure emotion without rational influence, or logic without emotional influence.

    [Here's the irony: In order to behave like a "rational agent" one needs to rely on the emotional brain.]…we should start to get used to the notion that we already rely on the emotional brain all the time, only in varying degrees measured on a spectrum.

    I am new to this blog, so forgive my ranting if this has already been discussed!

  3. #3 Dan
    February 26, 2009

    Jonah,
    Really have enjoyed the new book. I like the question you raise in this post about how to define a “superior decision”? In the book, the example given of the NFL QB making decisions in the chaos of a live play is a good example.
    In sports, there’s often the same question of “was that the best decision/option?” Even if the pass is completed, was there someone else further downfield that would have been a better option? Should the point guard have passed the ball instead of taking the shot?
    We’ll never know the outcomes of all the variations of our decisions, so are we improving our decision making or not? I think of Frost’s “The Road Not Taken” when it comes to comparing the decision we did make with all the others we could have chosen. We’ll never know where the other path led, so just assume we picked the right one?

  4. #4 Susan Weinschenk
    February 26, 2009

    There are lots of affective cues when buying online. I believe the research on decision-making is very applicable to the internet. I just wrote a book about it!

  5. #5 Sam
    February 27, 2009

    The paper really doesn’t claim that people make “better” decisions when relying on emotional cues. Instead the article is focused on preference consistency (as measured by the number of intransitivity cycles). This is important in itself because, as you mentioned, it highlights the fact that people can be less likely to be rational even when they think more. Preference consistency is also useful for marketers because it allows them to predict future behavior, and this finding suggests that market researchers should not encourage participants to think hard about their answers.

    There’s a good complementary study that’s also forthcoming in JCR on “Thinking too much”. And yet another forthcoming JCR article on “When choice reveals preference” shows that subjects can actually appear to be behaving rationally when thinking very little.

  6. #6 Susan Brumm
    March 2, 2009

    I just listened to your interview on NPR and was interested in your explanation about patterns and dopamine. You mentioned a woman who took a dopamine antagonist and became obsessed with slot machines. Are there any other compulsions that would be apparent taking the dopamine antagonist? Are there other obsessive compulsive disorders that would manifest as well?

  7. #7 f bonerigo
    March 4, 2009

    Maybe marketing people already know these concepts albeit in an intuitive way. Go to a trendy mall clothing store with the loud noise, dim lights, and so on. Impulse purchasing seems easier.

  8. #8 marc heisler
    March 4, 2009

    I thought that we had learned all about “the fallacy of spock.” To separate reason (or decision-making) from emotion is to divide an integrated system, akin to separating vision from the eyeball. Reason does not exist in the absence of emotion.

  9. #9 Phillip
    March 4, 2009

    Not really all that ironic. Consider the Iowa gambling task and those with ventromedial PFC damage. Inability to infer from emotions results in a complex array of behavioral effects; some good (an attenuated overcompensation reaction when ‘losing’ begins), some bad (losing more in the long run due to being unable to respond to the somatic markers the way an unlesioned brain does). Also, does consistency necessarily mean anything other than that? Diversifying one’s experiences could serve to broaden the array of feedback one can use to evaluate future decisions, thereby honing in more accurately on what happens to be the right choice. It almost seems as though the narrative is set up as if to mean that those who are using more of the deliberative system eventually get frustrated, say ‘screw it’, and choose capriciously. I’m sure this happens (the example with the 30 chocolates versus 4 to choose from or whatever from months ago being apropo) but this doesn’t necessarily have to be the case.

  10. #10 Matt Grist
    March 7, 2009

    I think we should stop talking about irrational emotional cognition altogether – there is just rational cognition and emotion is central to it!

    See: http://socialbrain.rsablogs.org.uk/?p=206

  11. #11 Farouk
    October 28, 2009

    thanks a lot for the useful info!!

  12. #12 detox
    November 21, 2009

    Neuroscience informs us that while emotional regulation takes place in the limbic system, emotions themselves are located throughout much of the frontal lobe as a whole…

  13. #13 Vertie Amistoso
    December 15, 2010

    I love getting notes on that blog, it makes fuel topic and gives humans to feel like they can become involved in the chat. I tend to agree. It’s a perfect way.

  14. #14 Gabriel Schiess
    August 4, 2011

    I could ask a lot of questions about this information, but you have laid everything out on the table here to the point it is easy to catch on. I agree with much of your article. I was trying to find something you might have left out for this information, but you’ve been very thorough.

  15. Ill spell it right , before a left wing liberal nutcase wants to correct that, Constitution!!!!!!!!!!!!!!!!!!!!

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