Neuroeconomics,

Neuromarketing & Neuroethics

Dr. Michael A. Davis

 What is Neuroeconomics?
• Neuroeconomics is the use of information
about brain activity, derived from
neuroimaging tools and brain scans, to further
understand the processes involved in
economic decision-making.
• Key: “where the brain chooses to look.”
 Neuroimaging Tools
• Event-related Brain Potentials (ERP)
• Functional Magnetic Resonance Imagery
(fMRI)
• Positron Emission Tomography (PET)
• Magnetoencephalograms (MEG)
• Single Photon Emission Computed
Tomography (SPECT)
 Research Focus
• Risk Preferences – aversion to uncertain
rewards
• Decisions Under Uncertainty
• Brain States
• Emotional States
• Prior Experiences
• Bottom Line: Economic decision-making is not
rational
 Framing
• 1,286 cancer deaths per 10,000 people is
thought to be 32% riskier than 12.86%!
• 78% chance of meeting financial goals
overrides “22 out of 100 people with your
strategy will end up eating cat food in the
park.”
• Buy one get one free is preferred over 50% off.
 Brain Scans
• Greed is Good, Gain is Mundane
• Expecting Dough vs. Expecting Dope
• Learning without Awareness
• I’m in Control Here
• The “Known Unknown”
• Don’t Go There
From Your Money & Your Brain, Zweig
 References
• http://www.neuroeconomics.org/
• http://neuroeconomics.net/ (George Mason)
• http://www.neuro-economics.org/ (CalTech)
• http://www.neuroeconomicstudies.org/
(Claremont)
• http://neuroeconomics.duke.edu/
• http://www.neuroeconomics.nyu.edu/index.php
• Your Money & Your Brain, Jason Zweig
 Neuromarketing
• “Neuromarketing is a new discipline which uses
neuroimaging techniques to visualize the brain
area activated by stimuli related with advertising,
marketing and communication.”
imagilys.com
• “What this kind of research attempted to do is to
get at the internal, subconscious states of mind,
unadulterated by conscious deliberation.”
Imediaconnection.com
 “Buyology”
• “But if marketers could uncover what is going
on in our brains that makes us choose one
brand over another – what information passes
through our brain’s filter and what
information doesn’t – well that would be key
to truly building brands of the future.”
• Buyology: Truth and Lies About Why We Buy,
Martin Lindstrom
 Taste vs. Memory
• “A team of researchers studied the Coke-Pepsi
paradox: during blind taste tests, the majority of
testers preferred the taste of Pepsi, despite the
fact that they buy more Coke. Functional MRI
permitted demonstrating an astonishing fact:
invoking the Coke trademark activates large areas
of the brain, linked to memory, which shows that
consumers are more influenced by their memory
of the trademark than they are by the taste of the
product.”
imagilys.com
 Sophisticated
• http://www.youtube.com/watch?v=M3wY0M
POPI4
• http://www.youtube.com/watch?v=S0ht2mm
a3YY
• http://www.sandsresearch.com/Staff_Favorite
s.aspx
 References
• http://www.wisegeek.com/what-is-
neuromarketing.htm
• http://www.neurosciencemarketing.com/blog
• http://www.imagilys.com/neuromarketing/
• http://www.imediaconnection.com/content/6
317.asp
• Buyology, Martin Lindstrom
 Neuroethics
• “Neuroethics encompasses a wide array of
ethical issues…. These include ethical
problems raised by advances in functional
neuroimaging, brain implants, brain-machine
interfaces and psychopharmacology as well as
by our growing understanding of the neural
bases of behavior, personality, consciousness,
and states of spiritual transcendence.”
neuroethics.upenn.edu
 Issues
• http://www.youtube.com/watch?v=NOfKyjyW
iU0
• http://www.youtube.com/watch?v=oHaMQ3t
AXes
 Legal Implications
• “The researchers found that activity in an analytic part of the
brain, known as the right dorsolateral prefrontal cortex, tracked
the decision of whether or not a person deserved to be
punished but, intriguingly, appeared relatively insensitive to
deciding how much to punish. By contrast, the activity in brain
regions involved in processing emotions, such as the amygdala,
tracked how much subjects decided to punish.”
• sciencedaily.com/releases/2008/12/081210121912.htm

• Brain is not fully matured until 25 years old.

• Techniques to “rewire” the brain.

 HOW IT ALL FITS
• Be prepared to add “neuro” to the front of
everything.
• Raises Mind vs. Brain consciousness questions
• Significant problems around manipulation and
exploitation
 References
• http://www.neuroethics.upenn.edu/
• http://neuroethics.stanford.edu/
• http://kolber.typepad.com/
• http://neuroethics.ca
• http://www.bioethics.gov/
• http://bioethics.com/
• Neuroethics, Neil Levy