What can neuroeconomics tell us about the economy

brain research

Christian Hoppe

To person

Dr. rer. nat., born 1967; Neuropsychologist at the Clinic for Epileptology, University Hospital Bonn, Sigmund-Freud-Straße 25, 53127 Bonn.
Email: [email protected]

Neuromarketing will determine the psychological and neural prerequisites for advertising measures, but will by no means be able to conjure up the perfect advertising. Neuroeconomics does not replace argumentation in everyday social life.

introduction

The ranks of neuroscientists today largely agree that mental and spiritual phenomena are without exception physically realized as brain processes; In any case, there is no recognized empirical or even experimental evidence of brain-independent mental and spiritual phenomena. The behavior and experience of an individual in his environment is inseparably linked with the processes in one of his organs, namely the brain; but these phenomena are obviously not identical.






While the fact that this mind-brain relationship seems clear, how is largely unclear. Clinical neuropsychologists observe the consequences of brain diseases on human experience and behavior (e.g. loss of speech after a stroke). Experimental neuropsychologists specifically physically change the brain function, e.g. in animal models through surgical lesions (damage) or in humans using drugs or repetitive transcranial (through the skull) magnetic stimulation, and investigate the effects of these interventions on the behavior and experience of the individual. Psychophysiologists go the opposite way and control behavior and experience within the framework of experimental psychological paradigms and concepts (e.g. through defined stimuli or tasks), while at the same time using electroencephalography (EEG), functional brain imaging (fMRI etc.) or other harmless Physiological measurement methods observe the processes triggered in the brain (e.g. regional blood flow changes as a result of locally increased nerve cell activity).

In a fascinating way, hot spots of brain activity can be identified for various psychological functions, the integrity of which is a necessary prerequisite for intact function. To name just a few examples, one knows the primary motor and tactile-sensory regions (gyrus pre- and postcentralis), the structures absolutely necessary for the formation of episodic memory contents (the hippocampus in the deep temporal lobe), regions that play a decisive role in the processing of emotions are (e.g. almond kernel) as well as areas that activate strongly in the case of success and reward experiences (nucleus accumbens, the striatum, so-called "reward system"). Although the functional imaging in healthy test persons could not in itself prove that the observed brain processes ("activations") are actually causally relevant for the intact cognitive processes, the image data in conjunction with the existing structure-function knowledge a kind of psychological "dissection" of a cognitive process is possible on a quasi-secondary basis.

Neuromarketing

Psychological knowledge can be used in very different areas of society to promote desired behavior and suppress undesired behavior (psychotherapy, pedagogy, forensics, personnel selection / development, advertising, etc.). No other psychological factors and functions play a role in advertising than in other human experience and behavior: attention, perception, learning and memory, emotion, motivation, influences of personality, social situation. Brand and advertising psychology have been practiced for decades, and the research results are used to a large extent in the planning of new products and marketing strategies. Larger companies and advertising agencies have their own advertising psychology research and development departments, or they cooperate intensively with academic partners. The attempt to research human behavior and experience from the point of view of a commercial application of this knowledge is at least as old as scientific psychology. Conditioning, learning from the model and exploiting attention, perception or thinking psychological "weaknesses" are the order of the day in our advertising culture. Isn't it astonishing that psychology has not yet been the subject of public ethics debates?

"Neuromarketing" refers to the psychophysiology or neuropsychology of brand and advertising effects, i.e. brand and advertising psychology expanded to include neuroscientific processes. Many reliably reproducible brand and advertising psychological effects are already known - but by no means understood. Neuromarketing looks for explanations at the brain level. The neuropsychology of advertising can determine the behavioral effects of a targeted manipulation of the brain; For example, it would be conceivable that the application of suitable neuroactive substances dissolved in the room air via the nasal mucous membrane could have a positive effect on customers' buying mood and ultimately their buying behavior (keyword: oxytocin). But marketers (people who are responsible for the marketing of a product) hardly intend to intervene directly physiologically-mechanically, chemically, genetically or electro-magnetically in the minds of their customers. Open use of neurophysiological influencing methods appears unacceptable in the long term; secret use would be highly risky in terms of the company's image. The boundaries between manipulation that is still psychological and already neurophysiological, however, are fluid. It should be remembered here, however, that psychological stimulation can be more subtle and effective and ultimately endanger the integrity of the person more than neurophysiological manipulation.

Psychophysiologists can use functional brain imaging to break down the neural mechanisms of known or suspected brand and advertising psychological effects. In fact, today the term "neuromarketing" is primarily associated with this approach and non-clinical, non-invasive (neither injections nor radiation) research on healthy subjects without any intervention at the brain level. It is undisputed that this research helps to research the functions of certain areas of the brain: With the help of experimental psychological methods, certain modules of the brain function are identified and characterized based on their psychological function. Secondly, i.e. using existing structure-function knowledge, this "neuroimaging" enables a more precise psychological analysis of cognitive processes. For example, it could be disputed whether the experience of a preferred brand has more to do with the resurgence of previous positive memories or more motivationally with the current experience of reward. A functional imaging study could provide valuable data to clarify this question, because in the case of the memory-related hypothesis one would expect a strong activation of memory-associated brain structures in the deep temporal lobe (hippocampus), while an activation of the nucleus accumbens associated with reward situations in the frontal lobe would be more of a motivational model would confirm.

Advertising measures that are touted with reference to certain advantages at the brain level - which is by no means rare - can now be evaluated with regard to these claims (e.g. stronger activation of the right hemisphere when using figurative marks, stronger activation of emotion-associated areas when using them of faces). Brain data can also help to clarify the causes of the differential effects of advertising measures: Why do certain advertising measures only catch on, for example, with young or female or with extraverted or European customers? In this respect, one can rightly expect an advance in knowledge from neuromarketing that goes beyond the mere illustration of already known psychological phenomena and helps to elucidate underlying neural and (indirect) psychological mechanisms.

However, as with the neuropsychological approach, the question arises of how interesting the problems and possible research results of a psychophysiological neuromarketing are for the user. They will continue to want to read the effect of their measures not from presumed or even proven brain activation, but from representative survey values ​​(awareness and attitude measurements) and (better still) manifest sales figures (buying behavior). That means, from the point of view of the pure user, the psychological level counts and suffices methodically and conceptually - the experience and behavior of customers under the influence of an advertising context. The attitude and behavioral effects themselves, which the marketeer is ultimately concerned with, can also be determined more cost-effectively than the brain physiological mechanisms on which they are based.

Neuromarketing has yet to prove that, for example, predicting the success of an advertising campaign with the additional use of costly neuroscientific processes is more efficient than using exclusively psychological processes. Furthermore, one should not forget that advertising is not just an individual, but primarily a socio-cultural phenomenon, the effect of which has to take place not only in a single brain, but in a large number of brains. So far, neuromarketing has only dealt with advertising effects on an individual level; a laboratory experimental image of social phenomena in the magnetic resonance tomograph or under the EEG cap is not excluded, but it will always differ significantly from the real field.

In summary, it can be said that with neuromarketing - neuropsychology and psychophysiology - one discovers necessary prerequisites for efficient advertising measures on a psychological and neuronal level, while the sufficient conditions remain unknown. For decades, brand and advertising psychology has been helping to plan advertising measures on a rational psychological basis and thus avoid unnecessary expenditure (example: compliance with minimum presentation times for verbal information so that it can be read at all). However, psychological knowledge does not replace the creative and always risky process of developing a new campaign - a good physicist is not necessarily a good inventor either - nor its careful psychological and economic evaluation.

Neuroeconomics

Neuroeconomics is the psychophysiology or neuropsychology of socio-economic behavior of animals and humans (e.g. decisions made under uncertainty). This area of ​​expertise should be carefully distinguished from neuromarketing. The term "neuroeconomics" is also associated with long-term application-oriented issues; but at this point in time this subject can be classified as more fundamental. It is currently being formed academically with its own specialist journals and professorships.

The paradigms used in neuroeconomics have typically been studied for some time in the area of ​​so-called behavioral economics, a sub-area of ​​economics. The paradigms have a game theory or microeconomic background, so that the optimal behavior of the test subjects (or a computer opponent) can be calculated mathematically. In this way, the model of homo oeconomicus, which is still widespread in economics, can be empirically tested. Even if specialist representatives attach great importance to the demarcation from psychology, this approach can be methodically and conceptually qualified as "psychological" in a comprehensive sense, because obviously it is primarily about the experience and behavior of individuals or small groups.

A first example: In the so-called trust game, a test person A receives a certain amount of money from the "bank" (test leader), of which he is to give another person B a certain share. If person B accepts the deal, they can both keep their respective stake; however, if person B rejects A's offer, neither of them receive anything. Rationally speaking, person B would have to accept every offer; because every amount received is more than nothing. In fact, however, people reject offers that are perceived as unfair. The rejection threshold is subject to strong cultural influences - just like the typical offers from person A. In some cultures more than half is offered from the outset (and no less accepted), while in other cultures just ten to twenty percent of the sum is offered and be accepted. The game situation can be varied in many ways: For example, the two players can be personally known or unknown to each other; one can invent virtual players with certain personality traits and thereby experimentally examine the effects of gender, socio-economic status, ethnic background or personality on cooperation behavior; furthermore, a change of role may or may not take place, be announced in advance or not, in order to determine the reciprocity of fair and unfair behavior.

The operationalization of altruistic (altruistic) behavior is hidden in the Trust Game; because if person B rejects an offer, then they punish person A at their own expense for unfair behavior. From an economic point of view, this finding appears incomprehensible. This is where neuroeconomics comes in; because the representation of the brain structures involved may provide interesting clues to explain this strange behavior. Corresponding studies show activation of the nucleus accumbens in the event of altruistic punishment. This structure is mainly activated in situations associated with success, reward or pleasure. So if an unfair offer is rejected, is there a kind of secret desire to be able to punish the other for his unfairness by the fact that his share of the rejection also goes to the bank? Is this feeling of pleasure worth the cost? It seems that subtle mechanisms for the creation, maintenance and termination of cooperation are neurobiologically well anchored. In the long term, person A will learn to behave more fairly (culturally) through the consistent punishment on the part of person B in the sense of operant conditioning (learning through reward or reinforcement) - that is, the apparently irrational strategy only causes short-term costs on the part of person B In the sense of an investment in a more cooperative future (which you are neurobiologically balanced by a positive activation, so to speak). In the long term, the apparently irrational behavior pays off for person B.

Another example: It is well known that job and financial satisfaction is crucially dependent on the comparison of wages with other people. Once a certain standard has been reached, an absolute increase brings less additional satisfaction than a relative increase compared to other people. Imaging studies have shown that relative wage differences also activate the “reward center” of the brain - regardless of the absolute wage level. Two test persons were allowed to play against each other at the same time in two neighboring scanners (magnetic resonance tomographs). The game only consisted of repeatedly assessing the number of points in a point cloud that was briefly presented. The subsequent reward depended on the correctness of the answers, but in some situations, according to a given plan, one of the two people was rewarded more than the other despite the same good performance (keyword: wage injustice). In these cases there was an activation of the nucleus accumbens on the part of the defrauded. So far, only men have been examined in this study, and it remains to be seen whether the follow-up study currently being carried out on women will provide similar indications of the rewarding effects of relative wage differentials.

The two examples mentioned follow a psychophysiological approach. A final example illustrates the possibilities of neuropsychological studies in the field of neuroeconomics: In the investment game, a "sponsor" gives a certain amount of money to a "creditor"; the "bank" (the test leader) doubles this amount, and the creditor then pays back a freely selectable portion of his assets to the sponsor. Then the game starts all over again. The willingness to sponsor in this game can be influenced by appropriate profit sharing on the part of the creditor. It is known that the pituitary hormone oxytocin has a positive effect on the attachment behavior of animals and humans; Interestingly, it can be easily absorbed through the nasal mucosa and from there quickly reaches the brain. How does the hormone influence the behavior of the sponsor neuropsychopharmacologically? It turns out that the willingness of a sponsor to trust oxytocin (compared to a placebo nasal spray) increases, but only towards people, not towards computer players. The behavior of the creditor remains unaffected by oxytocin.Supplementary imaging studies by the Zurich research group recently showed that this hormone effect could be mediated by deactivating the almond kernel (emotion) and the striatum (reward center). So is it conceivable that a medium-sized company that urgently needs a loan from its bank will secretly spray a little oxytocin in the room before the negotiation in order to make its financial advisor more merciful?

Overall, the extent of cooperation that can be discovered in behavioral-economic and neuro-economic studies is astonishing. Complex long-term collaborations can be observed, especially in humans. The conditions for the creation, maintenance and termination of cooperation can be empirically studied with the help of game theory paradigms and are currently one of the most researched topics in biology. The examples listed above all point to a pronounced sense of "fairness" or justice, and perceived fairness or justice is actually an essential condition of stable cooperation.

With a view to the (future) application of decidedly neuroeconomic knowledge and the interest of pure users in this research direction, reference can be made to the explanations on neuromarketing. Direct brain manipulation is hardly intended, because the neuropsychological neuroeconomics is of no benefit to the user. The effects of economic measures are recorded in the manifest behavior, not at the level of the brain activation on which this behavior is based; the psychophysiological neuroeconomics is also of little help to the user. Here, too, the pure user will fall back on reliably reproducible psychological or behavioral-economic effects.

Neuroethics

Neuromarketing and neuroeconomics stand in a special way for the current expansion of brain research with its originally medical examination methods (EEG, magnetic resonance imaging) in an extra-clinical research context, up to a commercial application. The two new subject areas represent methodically and conceptually a neuroscientific extension of psychological (or behavioral-economic) research, which has existed for many decades, has been used commercially for a long time and, remarkably, has hardly been discussed publicly from an ethical point of view. The preceding statements have shown that the pure user will have little interest in this neuroscientific extension - i.e. the inclusion of brain data by means of functional imaging and the like. The look into the customer's head, which the marketeer might want metaphorically, is not a look into a fifteen hundred gram organ made of water, fat, proteins, carbohydrates and minerals, but into the customer's "mind", the psychological one Laws that underlie behavior and experience. With regard to the measures as well as their evaluation, only the psychological level is relevant to the application: experience (e.g. brand awareness and attitude to brands) and manifest behavior (sales figures).

Viewed in this way, it seems strange, only because large-scale medical devices are now being used in brand and advertising impact research and the brain is being looked at as an organ, to start an excited discussion of ethics under the heading of "neuroethics". Obviously, the opinion is widespread that action only takes on a socially and politically relevant ethical dimension when expensive equipment and risky technology come into play - the ethical dimension of psychotechnics is neglected. The diverse usability of psychological knowledge - even without knowledge of the underlying neural mechanisms - is misunderstood. An evaluation of the factual influence of applied psychology, established over decades, on everyday and economic behavior in many different social and political contexts would be the necessary basis for an appropriate neuroethical discussion.

The emerging neuroethical questions show structurally significant similarities to the problems relating to genetics and genetic engineering that have been intensely discussed in the past two decades. The brain is, however, even closer to behavior and experience, i.e. to the person, than the genome. Comparable questions concern, for example, how to deal with incidental findings in research on healthy test persons, how to deal with prognostically significant knowledge (e.g. indications of a significantly increased risk of dementia in young people), who should and who should not have access to relevant data (e.g. Life insurances, HR departments), as well as the fundamental question of protecting the privacy of the person. The neuroethics debate would benefit from a detailed analysis of the genetic ethics debate. It would be desirable that irrational elements - for example unfounded diffuse fears based on fictitious future scenarios - are kept out of the public discussion as far as possible. The journalistic media have a central role and responsibility here.

Quite apart from the fact that good advertising or a skilful sales pitch is by no means only associated with undesired manipulation, but also with pleasant experiences of successful seduction into new positive experiences, every company is entitled to optimize its marketing activities and dialog with customers and carry out appropriate studies to be carried out or to have carried out. Larger advertising agencies do research because they want to convincingly explain the proposed measures to their customers. It seems to be desirable that as much of this research as possible is carried out publicly, with academic links and regularly published in the peer review process, so that in principle everyone can find out about new findings. This would ensure long-term trust in the seriousness of this research and the quality of the studies.

In the long term, a company also benefits from transparent communication strategies. With increasing "manipulation knowledge" it could be necessary to regularly adapt the legal situation and to ensure that certain forms of intransparent manipulation are excluded. After all, it would be conceivable that companies would disclose the psychological principles of their current advertising measures e.g. on their website - be it because a company can maintain a serious image with it, be it because the customers demand it or because it is legally binding.

Neuromarketing will be able to determine the inevitable psychological and neural prerequisites for efficient advertising measures, but by no means conjure up perfect advertising in a direct way. Neuroeconomics will be able to show important principles for efficient socio-economic behavior, but does not replace the creative process of reasoning and strategy that is adequate in terms of content in everyday social life. There are therefore good reasons to give more space to the fascination of these research directions and our curiosity about such everyday phenomena than to fears with regard to a misuse of new knowledge that can never be completely ruled out. [1]