Random Walk
Money on Your Mind
It’s perhaps not surprising that aversion to losing money is hardwired into our brains, but a sense of fairness seems to be as well. These are just two results from recent work at Caltech’s Brain Imaging Center, where a multidisciplinary team of biologists and social scientists are using functional Magnetic Resonance Imaging (fMRI) to map behavior onto brain structure with millimetric precision.
An fMRI scanner tracks blood flow in the brain as a proxy for brain activity. The test subject lies in the scanner and is then asked a series of questions or told to perform some other sort of mental activity, such as memorizing a list of names, while the experimenters literally watch him or her think. Many experiments use pairs of volunteers, each in their own scanner, trying to outwit each other in various strategy games where cash is on the line.
It turns out that the fear of losing money lives in the amygdalae, two almond-shaped clusters of tissue located in the medial temporal lobes. (The amygdala registers rapid emotional reactions and appears to play a role in depression, anxiety, and autism.) Benedetto de Martino, a visiting researcher from University College London; Colin Camerer, the Kirby Professor of Behavioral Economics; and Ralph Adolphs (PhD ’92), the Bren Professor of Psychology and Neuroscience and professor of biology, found the seat of this fear by studying two patients whose amygdalae had been destroyed by a very rare genetic disease.
These two people, as well as other volunteers, were each given $50 in cash and then offered a series of bets on the outcome of a computer-generated coin toss. Each potential wager had the same odds, 50/50, but a different ratio of payout to loss. For example, you might get the chance to win $20 or lose $5 (a risk most people will accept), or you might stand to lose $20 for the same $20 return (a bet most people will decline). In general, people shied away from the prospect of large losses, so even the proposition of winning $20 versus losing $15 got few takers, “even though the net expected outcome is positive,” Adolphs says.
Neither of the amygdala-damaged patients were fazed by the prospect of losing money, taking risky gambles much more often than control subjects. “We think this shows that the amygdala is critical for triggering a sense of caution,” explains Camerer. This function, he says, may be similar to the amygdala’s role in fear and anxiety. “Loss aversion has been observed in many economics studies, from monkeys trading tokens for food to people on high-stakes game shows,” he adds, “but this is the first clear evidence of a special brain structure that is responsible for fear of such losses.”
A paper on this research appeared in the February 23 issue of the Proceedings of the National Academy of Sciences. The work was supported by the Gordon and Betty Moore Foundation, the Human Frontier Science Program, the Wellcome Trust, the National Institutes of Health, the Simons Foundation, and a Global Center of Excellence grant from the Japanese government.
Another study, by Professor of Psychology John O’Doherty, Camerer, then-postdoc Elizabeth Tricomi, and Associate Professor of Economics Antonio Rangel (BS ’93), looked at the brain’s reward centers. It’s long been known that we don’t like inequality, especially when it comes to money. Tell two people working the same job that their salaries are different, and there’s going to be trouble, notes O’Doherty. “It’s not just the application of a social rule or convention; there’s really something about the basic processing of rewards in the brain that reflects these considerations.”
The experimenters watched how the ventromedial prefrontal cortex (VMPFC) and the ventral striatum—two well-known reward centers in the brain—reacted to the prospect of being offered various amounts of money. But there was a twist—the 40 volunteers were paired off beforehand, and one person in each pair was given an extra $50 before the experiments even began. Then, in each trial, the pair would be told how much more money they could potentially get—from zero dollars up to another $50—in a payout scheme selected at random at the end of the run.
As it turned out, the way the volunteers—or, to be more precise, the reward centers in their brains—reacted depended strongly upon whether the volunteer was the “poor” or the “rich” member of the pair. “People who started out poor had a strong reaction to getting money, and essentially no reaction to money going to another person,” Camerer says. “By itself, that wasn’t too surprising.” What was surprising was the other side of the coin—“people who started out rich had a stronger reaction to other people getting money than to themselves getting money. In other words, their brains liked it better when their poorer partner got the money.”
“We now know that these areas are not just self-interested,” adds O’Doherty. “They don’t exclusively respond to the rewards that one gets as an individual.” Instead, contrary to the prevailing wisdom about human nature, the brain evaluates the overall equity of the situation. “It shows that the basic reward structures in the human brain are sensitive to even subtle differences in social context.”
Camerer, too, found the results thought provoking. “We economists have a widespread view that most people are basically self-interested, and won’t try to help other people,” he says. “But if that were true, you wouldn’t see these sort of reactions to other people getting money.” Still, he says, the rich may have been at least partly motivated by self-interest—or a reduction of their own discomfort. “We think that, for the people who start out rich, seeing another person get money reduces their guilt over having more than the others.”
O’Doherty says that the next step is to attempt to figure out how these reactions translate into changes in behavior. “For example, the person who finds out they’re being paid less than someone else for doing the same job might end up working less hard. It will be interesting to try to understand the brain mechanisms that underlie such changes.”
These findings were published in the February 25 issue of Nature. The project was funded by grants from the National Science Foundation, the Human Frontier Science Program, the Gordon and Betty Moore Foundation, and the Caltech Brain Imaging Center. —KS/LO
