Abstract

http://ssrn.com/abstract=2140038
 


 



Brain, Decision, and Debt


Brian Knutson


Stanford University - Psychology

Gregory R Samanez-Larkin


Yale University - Department of Psychology

2012

In R. Brubaker, R. M. Lawless, & C. J. Tabb (Eds.) A Debtor World: Interdisciplinary Perspectives on Debt (pp. 167–180). New York: Oxford University Press, 2012

Abstract:     
In this chapter, we summarize recent findings in neuroeconomics suggesting that emotion (specifically, “anticipatory affect”) can influence financial decisions, and then discuss how individual differences in anticipatory affect may promote proneness to consumer debt. Thanks to improvements in spatial and temporal resolution, functional magnetic resonance imaging (FMRI) experiments have begun to suggest that activation of a brain region associated with anticipating gains (i.e., the nucleus accumbens or NAcc) precedes an increased tendency to seek financial gains, whereas activation of another region associated with anticipating losses (i.e., the anterior insula) precedes an increased tendency to avoid financial losses. By extension, individual differences in increased gain anticipation, decreased loss anticipation, or some combination of the two (plus a third nonreflective factor) might promote proneness to debt (Knutson, Samanez-Larkin, and Kuhnen 2011). Ultimately, neuroeconomic advances may help individuals to optimize their investment strategies, as well as empower institutions to minimize consumer debt. Neuroeconomists seek to explain how brains choose. Thanks to technological advances, scientists can now “open the black box” of the brain, moving below the surface mapping between input and output to identification of mediating neural and psychological processes. Thus, neuroeconomic methods might allow scientists to bridge gaps between neural, psychological, and behavioral levels of analysis. Below, we summarize ongoing attempts to forge links from affective neural circuits to affective experience and, eventually, to decisions that can lead to debt.

Number of Pages in PDF File: 14

Keywords: assets, debt, learning, affect, psychology, neuroscience

JEL Classification: D83, K00, H63, C91

Accepted Paper Series


Download This Paper

Date posted: September 2, 2012  

Suggested Citation

Knutson, Brian and Samanez-Larkin, Gregory R, Brain, Decision, and Debt (2012). In R. Brubaker, R. M. Lawless, & C. J. Tabb (Eds.) A Debtor World: Interdisciplinary Perspectives on Debt (pp. 167–180). New York: Oxford University Press, 2012. Available at SSRN: http://ssrn.com/abstract=2140038

Contact Information

Brian Knutson
Stanford University - Psychology ( email )
Stanford, CA 94305
United States
650 723 7431 (Phone)
650 725 5699 (Fax)
HOME PAGE: http://psychology.stanford.edu/~knutson
Gregory R Samanez-Larkin (Contact Author)
Yale University - Department of Psychology ( email )
P.O. Box 208205
New Haven, CT 06520-8205
United States
Feedback to SSRN


Paper statistics
Abstract Views: 867
Downloads: 143
Download Rank: 114,585
Paper comments
No comments have been made on this paper

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo5 in 0.422 seconds