I’m always fascinated by the ways in which societal issues impact the research program of modern neuroscience. (After all, the virtue of studying the brain is that it can be made relevant to just about anything, from the formation of financial bubbles to internet searches.) We’re still living through the aftermath of the Great Recession, which was obviously caused by a number of factors. But one clear cause was the astonishing number of bad mortgages, many of which were in the subprime category. These mortgages were made possible by irresponsible speculation on Wall Street, but they also involved some spectacularly bad decision-making on the part of consumers, who took out big home loans they couldn’t afford. (It’s worth noting, of course, that in some instances these decisions were influenced by fraudulent and dishonest brokers.)
Let’s look, for instance, at 2/28 mortgage, one of the most popular subprime variants. The structure of the loan is simple: there is a low, fixed-interest rate for the first two years (aka the teaser rate) and a much higher, adjustable rate for the next twenty-eight. In other words, the loan works a lot like a credit card: it lets people get a home for very little up front, but then hits the borrower with high interest payments at some point in the distant future. By the time the housing market went bust in the summer of 2007, subprime loans like the 2/28 accounted for almost 20 percent of all mortgages. (Some neighborhoods, of course, fared much worse, with more than 60 percent of all mortgages falling into the subprime category.) Unfortunately, this popularity came with a steep cost. Once the rates start to rise⎯and they always do⎯many people can no longer afford the monthly mortgage payment. That’s when you get a foreclosure.
On the one hand, subprime mortgages make no sense. Over the lifetime of the loan, a homeowner with a 2/28 mortgage will be pay far higher rates and make far larger interest payments. (Of course, many homeowners assumed they’d simply refinance their mortgage within the first two years, which is why, during the peak of the housing boom, 55 percent of all 2/28 mortgages were sold to homeowners who could have gotten prime mortgages.) So if the 2/28 loan is such a bad idea, why did so many people do it? The answer involves the inevitable temptation of immediate rewards. We want something now, and so we discount those future costs; the emotional pull of the present is simply too potent. As Plato might have put it, the passionate horses are pulling the rider against his rational will.
What does this collective failure have to do with neuroscience? Last week, I blogged about an interesting new paper that looked at how thinking about any event in the future can help us resist the allure of instant gratification. Now comes another interesting paper that uses transcranial magnetic stimulation (TMS) to better understand the causal relationship between activity in certain brain areas, such as the lateral prefrontal cortex, and the ability to make rational decisions about the future.
The experiment used the standard paradigm: subjects were given a choice between receiving a larger amount of money next month, or a smaller amount right now. By changing the amounts of money on offer, the scientists were able to generate different responses. For instance, while most people would wait for $35 next month as opposed to $20 right now, they wouldn’t wait when only offered $21 next month. So far, so obvious: our tendency to delay gratification depends upon the incentives.
In recent years, there’s been a number of experiments that have asked people these sorts of questions in the brain scanner. The results have been a bit confusing. Here’s Joseph Kable, a psychologist at Penn, summarizing the data:
Although some functional imaging studies have observed greater lateral prefrontal activity when people choose larger, delayed rewards over smaller, immediate ones, others have not replicated this finding. Similarly, although some lateral prefrontal regions show increased activity in more patient individuals, other lateral prefrontal regions show the opposite effect. Furthermore, although decreased gray matter in lateral prefrontal regions is associated with greater impatience, damage to dorsolateral prefrontal cortex does not seem to affect decision-making regarding delayed rewards.
Confusing, right? Imperfect tools give us noisy data, and fMRI is a very imperfect tool. Brain damage can also be ambiguous, as different parts of the tightly interconnected PFC can compensate for local damage. Here’s where TMS comes in handy. TMS involves rapidly oscillating magnetic fields, which can generate weak electrical currents in brain tissue. This leads to a collective depolarization in a specific brain area – the pulses of TMS can be narrowly focused – which makes it harder for that bit of tissue to become excited and exert its influence. The end result is that it’s possible to selectively and temporarily “knock-out” circuits in the brain.
This latest study, led by Bernd Figner at Columbia, used TMS to disrupt the lateral prefrontal cortex while people were debating whether or not to delay for a larger reward. The end result was that people became much more impulsive: when the massive beam of electromagnetism was aimed at our forehead, we found it harder to delay gratification, and became significantly more likely to choose $20 right now, instead of $25 next month.
Interestingly, the TMS beam didn’t disrupt our desire for the rewards. Although subjects had a largely incapacitated lateral PFC, they still assigned the various rewards the same level of attractiveness. What this suggests is that the lateral PFC doesn’t compute the subjective value of things. Instead, it represents a modulatory signal that selectively favors the future, and allows us to discount the impulses of the present moment. In other words, it turns down the volume knob on our desires, so that we can make a more “rational” decision. Because TMS is reversible, this elegant study adds to the growing weight of evidence that the lateral PFC plays a causal role in delayed gratification.
We’re living in an age that lived beyond its means. If we’re ever going to move beyond these tiresome conversations about defaults, foreclosures and debt, then we’re going to have to learn to live without, to forgo the instant pleasure for the delayed reward. That’s not an easy thing to do, but we’re beginning to learn how we do it.