Thursday, November 18, 2010

Thinking About Buying

Brain activity during simulated shopping shows that thinking about buying a good is itself an enjoyable activity.

When presented with products, participant's nucleus accumbens (subcortal brain region) - associated with the anticipation of pleasure - was activated. When presented with excessive prices: insula (another brain region) activated and medial prefrontal cortex - associated with balancing gains versus losses deactivated.

The study challenges conventional economic understanding of consumer purchases - consumers decide b/w immediate pleasure of a purchase and delayed pleasures of alternative things. Instead, the study suggests that consumers trade off immediate pleasure of a purchase VS. immediate pain of spending money. This may explain why overspending when using credit cards instead of cash.

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