Logic fights impulse in economic decision-making

Money can make people act crazy, but there is a small group of people that act more rationally than most, and this behavior may be due to their high "cognitive control," according to a new study being published in the Nov. 9 issue of the online journal PLoS ONE.

The researchers, led by Wim De Neys of National Center for Scientific Research (CNRS) in France, tested subjects' behavior in the , in which two players have to split a sum of money. One player makes an offer, and the other must accept or refuse the offer. If it is declined, neither receives any money. The rational choice, and the scenario predicted by most economic models, would be for the first player to offer only a small amount to the second player, and for the second player to accept this offer, since something is better than nothing. However, most people do not behave this way. The first player often offers an even split, and the second player often rejects an offer of an uneven split, likely due to strong emotional .

There are, however, a small group of people who behave as expected by the models. When the researchers studied this further, they found that they had high "," as measured by a simple computer task, brain-imaging during a simple computer task, relative to the non-rational players. In other words, they have a generally greater capacity to override impulsive tendencies, which allowed them to behave more in accordance with traditional economic models and make more money in the end.

More information: De Neys W, Novitskiy N, Geeraerts L, Ramautar J, Wagemans J (2011) Cognitive Control and Individual Differences in Economic Ultimatum Decision- Making. PLoS ONE 6(11): e27107. doi:10.1371/journal.pone.0027107

Related Stories

Sense of justice built into the brain

May 03, 2011

A new study from the Karolinska Institute and Stockholm School of Economics shows that the brain has built-in mechanisms that trigger an automatic reaction to someone who refuses to share. In the study publishing next week ...

Recommended for you

The Edwardians were also fans of brain training

5 hours ago

Brain-training programmes are all the rage. They are part of a growing digital brain-health industry that earned more than US$1 billion in revenue in 2012 and is estimated to reach US$6 billion by 2020. The extent to which they actually improve brain function re ...

Report advocates improved police training

Aug 29, 2014

A new report released yesterday by the Mental Health Commission of Canada identifies ways to improve the mental health training and education that police personnel receive.

Meaningful relationships can help you thrive

Aug 29, 2014

Deep and meaningful relationships play a vital role in overall well-being. Past research has shown that individuals with supportive and rewarding relationships have better mental health, higher levels of subjective well-being ...

User comments

Adjust slider to filter visible comments by rank

Display comments: newest first

Vendicar_Decarian
1 / 5 (1) Nov 09, 2011
An implicit assumption in this study is that the goal of rational people will be to maximize their profit rather than teaching their opponent that greed will not go unpunished.

Ultimately, which goal is more rational?

The fact that most Economic models presume the wrong answer says much about the fundamental failures of modern Economics - Particularly Conservative/Libertarian Economics.