by Roger Dooley on 9 August, 2006 - 10:13
It’s no great surprise to marketers, or even most semi-aware humans, that people often make decisions based more on emotion than on rational processing of information. Oddly, for decades economists ignored this apparent truth, assuming that business managers strove for maximum profits, buyers and sellers slid smoothly along supply and demand curves until they intersected, and so on.
While some simplification of complexity is necessary and useful - think of the ubiquitous “frictionless surface” so loved by teachers of introductory physics - sometimes it can lead to poor explanations of real world phenomena. Over the years, economists have gradually poked holes in theories based on purely rational behavior, perhaps beginning with Herb Simon’s famous work showing that business managers often strove for satisfactory, rather than optimal or maximum, results. In recent years, neuroscience has entered the fray, with researchers in the new field of neuroeconomics attempting to use the tools of neuroscience to get to the root of human decision-making. Now, brain scan work conducted at the University College of London by Benedetto De Martino offers intriguing proof of the extent to which emotions rule the decision process.
The “Framing Effect”. De Martino’s work is described in a paper published in the current issue of Science, Frames, Biases, and Rational Decision-Making in the Human Brain, abstracted as,
Human choices are remarkably susceptible to the manner in which options are presented. This so-called “framing effect” represents a striking violation of standard economic accounts of human rationality, although its underlying neurobiology is not understood. We found that the framing effect was specifically associated with amygdala activity, suggesting a key role for an emotional system in mediating decision biases. Moreover, across individuals, orbital and medial prefrontal cortex activity predicted a reduced susceptibility to the framing effect. This finding highlights the importance of incorporating emotional processes within models of human choice and suggests how the brain may modulate the effect of these biasing influences to approximate rationality.
The “framing effect” refers to the difference in response to the same question framed different ways. Is a product shown to be 99% pure good? What about a product shown to contain 1% impurities? Same product, almost the same question, but the way the question is asked may elicit sets of responses that are statistically different. De Martino put this issue to the test, by asking subjects questions while they were undergoing an fMRI brain scan. His questions were based on a simple gambling proposition in which people could choose between a certain option and a gambling option. From a press release describing the work,
Subjects were presented with these choices under two different frames (i.e. scenarios), in which the sure option was worded either as the amount to be kept from the starting amount (”keep £20″), or the amount to be deducted (”lose £30″). The two options, although worded differently, would result in exactly the same outcome, i.e. that the participant would be left with £20… The UCL study found that participants were more likely to gamble at the threat of losing £30 than the offer of keeping £20. On average, when presented with the “keep” option, participants chose to gamble 43 per cent of the time compared with 62 per cent for the “lose” option.
The interesting part is what was happening in the brains of the subjects as they made their choices. In every case, both the amygdala, the brain region thought to control emotions, and the prefrontal cortex, the brain area responsibe for higher level information processing, showed activity. Subjects that exhibited more rational decision-making also showed a greater level of activity in the prefrontal cortex, suggesting that these individuals were better able to balance their emotional response with a rational evaluation process. De Martino notes,
Our study provides neurobiological evidence that an amygdala-based emotional system underpins this biasing of human decisions. Moreover, we found that people are rational, or irrational, to widely differing amounts. Interestingly, the amygdala was active across all participants, regardless of whether they behaved rationally or irrationally, suggesting that everyone experiences an emotional reaction when faced with such choices. However, we found that more rational individuals had greater activation in their orbitofrontal cortex (a region of prefrontal cortex) suggesting that rational individuals are able to better manage or perhaps override their emotional responses.
There’s a great discussion of De Martino’s work in The Framing Effect at the Economist’s View blog. The blog author reprints a great number of charts from the article, and there’s a lively discussion of the relevance of this work to the real world.
What does this research in neuroeconomics tell marketers and would-be neuromarketing practitioners? First, it’s a good reminder of what marketers already know - emotions play a big role in decisions, and the way you frame a question can shape the answer you get. Second, it highlights both the differences in response between individuals as well as their similarities. Most marketing campaigns try to frame relevant issues in a way that makes their product or service attractive; this research suggests that marketers would do well to look for those emotional hot buttons - risk of loss, pain, etc. - and consider them as they lay out the issues.
Negative Advertising. When political marketers highlight obscure or minor negative information about a candidate, they are “framing” that information in a way that makes the candidate look bad. An incumbent who “missed 14 critical opportunities to vote on matters of importance to his constituents” sounds a lot more negligent than one with a “99% perfect attendance record”. Such framing is effective - political marketers have known that negative ads often work (as much as viewers hate them), and now De Martino shows, in part, why they work. 100% of the viewers will have at least some emotional response to the negatively-phrased information. While some “rational” viewers will be able to suppress the emotional response and look at the facts, and perhaps still others will view the ad through a biased lens (see The Neuroscience of Political Marketing), some portion of the viewers are likely to let their emotions rule.
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