Tag Archives: neuroeconomics

BigBang

Vampire Wedding and the Moral Molecule

Attend a wedding. Gather the hundred or so guests, and take their blood. Take samples that is. Then, measure the levels of a hormone called oxytocin. This is where neuroeconomist Paul Zak’s story beings — around a molecular messenger thought to be responsible for facilitating trust and empathy in all our intimate relationships.

[div class=attrib]From “The Moral Molecule” by Paul J. Zak, to be published May 10, courtesy of the Wall Street Journal:[end-div]

Could a single molecule—one chemical substance—lie at the very center of our moral lives?

Research that I have done over the past decade suggests that a chemical messenger called oxytocin accounts for why some people give freely of themselves and others are coldhearted louts, why some people cheat and steal and others you can trust with your life, why some husbands are more faithful than others, and why women tend to be nicer and more generous than men. In our blood and in the brain, oxytocin appears to be the chemical elixir that creates bonds of trust not just in our intimate relationships but also in our business dealings, in politics and in society at large.

Known primarily as a female reproductive hormone, oxytocin controls contractions during labor, which is where many women encounter it as Pitocin, the synthetic version that doctors inject in expectant mothers to induce delivery. Oxytocin is also responsible for the calm, focused attention that mothers lavish on their babies while breast-feeding. And it is abundant, too, on wedding nights (we hope) because it helps to create the warm glow that both women and men feel during sex, a massage or even a hug.

Since 2001, my colleagues and I have conducted a number of experiments showing that when someone’s level of oxytocin goes up, he or she responds more generously and caringly, even with complete strangers. As a benchmark for measuring behavior, we relied on the willingness of our subjects to share real money with others in real time. To measure the increase in oxytocin, we took their blood and analyzed it. Money comes in conveniently measurable units, which meant that we were able to quantify the increase in generosity by the amount someone was willing to share. We were then able to correlate these numbers with the increase in oxytocin found in the blood.

Later, to be certain that what we were seeing was true cause and effect, we sprayed synthetic oxytocin into our subjects’ nasal passages—a way to get it directly into their brains. Our conclusion: We could turn the behavioral response on and off like a garden hose. (Don’t try this at home: Oxytocin inhalers aren’t available to consumers in the U.S.)

More strikingly, we found that you don’t need to shoot a chemical up someone’s nose, or have sex with them, or even give them a hug in order to create the surge in oxytocin that leads to more generous behavior. To trigger this “moral molecule,” all you have to do is give someone a sign of trust. When one person extends himself to another in a trusting way—by, say, giving money—the person being trusted experiences a surge in oxytocin that makes her less likely to hold back and less likely to cheat. Which is another way of saying that the feeling of being trusted makes a person more…trustworthy. Which, over time, makes other people more inclined to trust, which in turn…

If you detect the makings of an endless loop that can feed back onto itself, creating what might be called a virtuous circle—and ultimately a more virtuous society—you are getting the idea.

Obviously, there is more to it, because no one chemical in the body functions in isolation, and other factors from a person’s life experience play a role as well. Things can go awry. In our studies, we found that a small percentage of subjects never shared any money; analysis of their blood indicated that their oxytocin receptors were malfunctioning. But for everyone else, oxytocin orchestrates the kind of generous and caring behavior that every culture endorses as the right way to live—the cooperative, benign, pro-social way of living that every culture on the planet describes as “moral.” The Golden Rule is a lesson that the body already knows, and when we get it right, we feel the rewards immediately.

[div class=attrib]Read the entire article after the jump.[end-div]

[div class=attrib]CPK model of the Oxitocin molecule C43H66N12O12S2. Courtesy of Wikipedia.[end-div]

Idea Soup

Hari Seldon, Meet Neuroeconomics

Fans of Isaac Asimov’s groundbreaking Foundation novels will know Hari Seldon as the founder of “psychohistory”. Entirely fictional, psychohistory is a statistical science that makes possible predictions of future behavior of large groups of people, and is based on a mathematical analysis of history and sociology.

Now, 11,000 years or so back into our present reality comes the burgeoning field of “neuroeconomics”. As Slate reports, Seldon’s “psychohistory” may not be as far-fetched or as far away as we think.

[div class=attrib]From Slate:[end-div]

Neuroscience—the science of how the brain, that physical organ inside one’s head, really works—is beginning to change the way we think about how people make decisions. These findings will inevitably change the way we think about how economies function. In short, we are at the dawn of “neuroeconomics.”

Efforts to link neuroscience and economics have occurred mostly in just the last few years, and the growth of neuroeconomics is still in its early stages. But its nascence follows a pattern: Revolutions in science tend to come from completely unexpected places. A field of science can turn barren if no fundamentally new approaches to research are on the horizon. Scholars can become so trapped in their methods—in the language and assumptions of the accepted approach to their discipline—that their research becomes repetitive or trivial.

Then something exciting comes along from someone who was never involved with these methods—some new idea that attracts young scholars and a few iconoclastic old scholars, who are willing to learn a different science and its research methods. At some moment in this process, a scientific revolution is born.

The neuroeconomic revolution has passed some key milestones quite recently, notably the publication last year of neuroscientist Paul Glimcher’s book Foundations of Neuroeconomic Analysis—a pointed variation on the title of Paul Samuelson’s 1947 classic work, Foundations of Economic Analysis, which helped to launch an earlier revolution in economic theory.

…

Much of modern economic and financial theory is based on the assumption that people are rational, and thus that they systematically maximize their own happiness, or as economists call it, their “utility.” When Samuelson took on the subject in his 1947 book, he did not look into the brain, but relied instead on “revealed preference.” People’s objectives are revealed only by observing their economic activities. Under Samuelson’s guidance, generations of economists have based their research not on any physical structure underlying thought and behavior, but on the assumption of rationality.

…

While Glimcher and his colleagues have uncovered tantalizing evidence, they have yet to find most of the fundamental brain structures. Maybe that is because such structures simply do not exist, and the whole utility-maximization theory is wrong, or at least in need of fundamental revision. If so, that finding alone would shake economics to its foundations.

Another direction that excites neuroscientists is how the brain deals with ambiguous situations, when probabilities are not known or other highly relevant information is not available. It has already been discovered that the brain regions used to deal with problems when probabilities are clear are different from those used when probabilities are unknown. This research might help us to understand how people handle uncertainty and risk in, say, financial markets at a time of crisis.

[div class=attrib]Read the entire article here.[end-div]

[div class=attrib]Image: Hari Seldon, Foundation by Isaac Asimov.[end-div]