Decision making is a task that each and every single person is subject to every day of their lives. What will I wear today? What roads will I take to drive to work today? What should I write about for my homework assignment? Each decision has many different ways that it can go,making some decisions more costly than others. Say instead of deciding what to wear to work or what to write your blog post on, you have to make decisions that affect the day to day operations of a publicly traded company. Clearly, these decisions carry a little more weight. In a recent Forbes article, it is highlighted that 98% of managers and executives, in a study of 500, “fail to apply the best practices when making decisions.” This study is even more concerning, as in the same article it is stated that researchers found that “decision effectiveness is 95% correlated with financial performance,” suggesting that making the wrong decisions is not only inconvenient, but may also be costly.
But where does neuroscience come in? The exciting field of neuroeconomics provides the answer to that question. Neuroeconomics is a field in which decision making itself is examined. Through paradigms set in neuroeconomics, one can see how one decision may be efficient and justified, while another is costly and impulsive. The work of Brian Sweis delves into these paradigms of decision making and what affects them.
Before describing Sweis’s results, I would like to very briefly describe how a decision is graded in the neuroeconomic research that Sweis has done with rodents. The animals were tested in a restaurant experiment, in which during their foraging time for the day, the animal would run around an enclosure in which it would encounter different restaurants. At these different restaurants, there would be different flavors of food pellets available to the rodent. The pellet would also be accompanied by a tone which would indicate how long the animal would have to wait at that restaurant before receiving the food. Tones that indicated a long wait time were posed to be bad deals, as waiting longer for one food pellet would not be worth the animal’s time, when it could just go to the next restaurant and receive food faster. Therefore, if the rodent waited for food at a bad deal, then it can be said to have made a bad decision.
While this seems straight forward, Sweis found that there were several things that could influence whether the animal made a good or a bad decision. One of these was drug usage. Rodents that had been made to be abstinent from cocaine (given cocaine, then forced abstinence) were shown to be more impulsive in their choices. This led to more bad deals being accepted. Rodents that were made to be abstinent from morphine also showed an effect on their decision making ability, in that they were less likely to reevaluate bad deals that they accepted. These results suggest that drug abuse alters the decision making pathway (learning and memory) and leads to more errors in decision making.
Another factor shown to affect decision making was the assigned value by the animal to the pellet. Essentially, the animals showed a tendency to favor certain flavors of food pellets, such as banana, over others. The tendency to prefer certain flavors could influence the animal’s decision. For instance, the animal may decide to take a slightly worse deal in order to get the food flavor that it likes more. Related to the concept that value assigned to something might influence one’s decision making process, Sweis also examines “sunken cost.” Sunken cost is the idea that the more time that has been spent on something, the more valuable or worthwhile that thing is. Both humans and animals display this tendency. In rodents, the longer the animal spends waiting for a food pellet, the more likely the animal is to finish the waiting period (even if it’s still a bad deal). In humans, sunken cost is shown in translational neuroeconomic studies that reveal that people rate longer internet videos as being more entertaining than shorter videos about similar topics.
Concerning where neuroeconomics is heading in the future, the field seems very promising. Testing paradigms are expanding (even growing to include primates at the University of Minnesota). Testing has also grown to include things like mental health issues, sex differences, and more.
In summary, why is neuroeconomics valuable? The answer is that the more we understand a process as crucial to our daily lives as decision making, the better. The more we know about the process of decision making, the more we know about how decision making is influenced. In turn this will allow us to make better decisions in the long run.
Works Cited
Larson, Erik. “Don't Fail At Decision Making Like 98% Of Managers Do.” Forbes, Forbes Magazine, 18 May 2017, www.forbes.com/sites/eriklarson/2017/05/18/research-reveals-7-steps-to-better-faster-decision-making-for-your-business-team/#597bea5d40ad.
Sweis, Brian M., et al. “Prolonged Abstinence from Cocaine or Morphine Disrupts Separable Valuations during Decision Conflict.” Nature Communications, vol. 9, no. 1, 2018, doi:10.1038/s41467-018-04967-2.
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