Expert financial advice neurobiologically ‘offloads’ financial decision making under risk

J. Engelmann, C.M. Capra, C.N. Noussair, G. Berns

Research output: Contribution to journalArticleScientificpeer-review

Abstract

Background
Financial advice from experts is commonly sought during times of uncertainty. While the field of neuroeconomics has made considerable progress in understanding the neurobiological basis of risky decision-making, the neural mechanisms through which external information, such as advice, is integrated during decision-making are poorly understood. In the current experiment, we investigated the neurobiological basis of the influence of expert advice on financial decisions under risk.

Methodology/Principal Findings
While undergoing fMRI scanning, participants made a series of financial choices between a certain payment and a lottery. Choices were made in two conditions: 1) advice from a financial expert about which choice to make was displayed (MES condition); and 2) no advice was displayed (NOM condition). Behavioral results showed a significant effect of expert advice. Specifically, probability weighting functions changed in the direction of the expert's advice. This was paralleled by neural activation patterns. Brain activations showing significant correlations with valuation (parametric modulation by value of lottery/sure win) were obtained in the absence of the expert's advice (NOM) in intraparietal sulcus, posterior cingulate cortex, cuneus, precuneus, inferior frontal gyrus and middle temporal gyrus. Notably, no significant correlations with value were obtained in the presence of advice (MES). These findings were corroborated by region of interest analyses. Neural equivalents of probability weighting functions showed significant flattening in the MES compared to the NOM condition in regions associated with probability weighting, including anterior cingulate cortex, dorsolateral PFC, thalamus, medial occipital gyrus and anterior insula. Finally, during the MES condition, significant activations in temporoparietal junction and medial PFC were obtained.

Conclusions/Significance
These results support the hypothesis that one effect of expert advice is to “offload” the calculation of value of decision options from the individual's brain.
Original languageEnglish
Pages (from-to)1-14
JournalPLoS ONE
Volume4
Issue number3
Publication statusPublished - 2009

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Decision making
Chemical activation
Gyrus Cinguli
Brain
Modulation
Scanning
Experiments
Magnetic Resonance Imaging
Direction compound
Uncertainty

Cite this

Engelmann, J., Capra, C. M., Noussair, C. N., & Berns, G. (2009). Expert financial advice neurobiologically ‘offloads’ financial decision making under risk. PLoS ONE, 4(3), 1-14.
Engelmann, J. ; Capra, C.M. ; Noussair, C.N. ; Berns, G. / Expert financial advice neurobiologically ‘offloads’ financial decision making under risk. In: PLoS ONE. 2009 ; Vol. 4, No. 3. pp. 1-14.
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abstract = "BackgroundFinancial advice from experts is commonly sought during times of uncertainty. While the field of neuroeconomics has made considerable progress in understanding the neurobiological basis of risky decision-making, the neural mechanisms through which external information, such as advice, is integrated during decision-making are poorly understood. In the current experiment, we investigated the neurobiological basis of the influence of expert advice on financial decisions under risk.Methodology/Principal FindingsWhile undergoing fMRI scanning, participants made a series of financial choices between a certain payment and a lottery. Choices were made in two conditions: 1) advice from a financial expert about which choice to make was displayed (MES condition); and 2) no advice was displayed (NOM condition). Behavioral results showed a significant effect of expert advice. Specifically, probability weighting functions changed in the direction of the expert's advice. This was paralleled by neural activation patterns. Brain activations showing significant correlations with valuation (parametric modulation by value of lottery/sure win) were obtained in the absence of the expert's advice (NOM) in intraparietal sulcus, posterior cingulate cortex, cuneus, precuneus, inferior frontal gyrus and middle temporal gyrus. Notably, no significant correlations with value were obtained in the presence of advice (MES). These findings were corroborated by region of interest analyses. Neural equivalents of probability weighting functions showed significant flattening in the MES compared to the NOM condition in regions associated with probability weighting, including anterior cingulate cortex, dorsolateral PFC, thalamus, medial occipital gyrus and anterior insula. Finally, during the MES condition, significant activations in temporoparietal junction and medial PFC were obtained.Conclusions/SignificanceThese results support the hypothesis that one effect of expert advice is to “offload” the calculation of value of decision options from the individual's brain.",
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Engelmann, J, Capra, CM, Noussair, CN & Berns, G 2009, 'Expert financial advice neurobiologically ‘offloads’ financial decision making under risk', PLoS ONE, vol. 4, no. 3, pp. 1-14.

Expert financial advice neurobiologically ‘offloads’ financial decision making under risk. / Engelmann, J.; Capra, C.M.; Noussair, C.N.; Berns, G.

In: PLoS ONE, Vol. 4, No. 3, 2009, p. 1-14.

Research output: Contribution to journalArticleScientificpeer-review

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AU - Engelmann, J.

AU - Capra, C.M.

AU - Noussair, C.N.

AU - Berns, G.

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Y1 - 2009

N2 - BackgroundFinancial advice from experts is commonly sought during times of uncertainty. While the field of neuroeconomics has made considerable progress in understanding the neurobiological basis of risky decision-making, the neural mechanisms through which external information, such as advice, is integrated during decision-making are poorly understood. In the current experiment, we investigated the neurobiological basis of the influence of expert advice on financial decisions under risk.Methodology/Principal FindingsWhile undergoing fMRI scanning, participants made a series of financial choices between a certain payment and a lottery. Choices were made in two conditions: 1) advice from a financial expert about which choice to make was displayed (MES condition); and 2) no advice was displayed (NOM condition). Behavioral results showed a significant effect of expert advice. Specifically, probability weighting functions changed in the direction of the expert's advice. This was paralleled by neural activation patterns. Brain activations showing significant correlations with valuation (parametric modulation by value of lottery/sure win) were obtained in the absence of the expert's advice (NOM) in intraparietal sulcus, posterior cingulate cortex, cuneus, precuneus, inferior frontal gyrus and middle temporal gyrus. Notably, no significant correlations with value were obtained in the presence of advice (MES). These findings were corroborated by region of interest analyses. Neural equivalents of probability weighting functions showed significant flattening in the MES compared to the NOM condition in regions associated with probability weighting, including anterior cingulate cortex, dorsolateral PFC, thalamus, medial occipital gyrus and anterior insula. Finally, during the MES condition, significant activations in temporoparietal junction and medial PFC were obtained.Conclusions/SignificanceThese results support the hypothesis that one effect of expert advice is to “offload” the calculation of value of decision options from the individual's brain.

AB - BackgroundFinancial advice from experts is commonly sought during times of uncertainty. While the field of neuroeconomics has made considerable progress in understanding the neurobiological basis of risky decision-making, the neural mechanisms through which external information, such as advice, is integrated during decision-making are poorly understood. In the current experiment, we investigated the neurobiological basis of the influence of expert advice on financial decisions under risk.Methodology/Principal FindingsWhile undergoing fMRI scanning, participants made a series of financial choices between a certain payment and a lottery. Choices were made in two conditions: 1) advice from a financial expert about which choice to make was displayed (MES condition); and 2) no advice was displayed (NOM condition). Behavioral results showed a significant effect of expert advice. Specifically, probability weighting functions changed in the direction of the expert's advice. This was paralleled by neural activation patterns. Brain activations showing significant correlations with valuation (parametric modulation by value of lottery/sure win) were obtained in the absence of the expert's advice (NOM) in intraparietal sulcus, posterior cingulate cortex, cuneus, precuneus, inferior frontal gyrus and middle temporal gyrus. Notably, no significant correlations with value were obtained in the presence of advice (MES). These findings were corroborated by region of interest analyses. Neural equivalents of probability weighting functions showed significant flattening in the MES compared to the NOM condition in regions associated with probability weighting, including anterior cingulate cortex, dorsolateral PFC, thalamus, medial occipital gyrus and anterior insula. Finally, during the MES condition, significant activations in temporoparietal junction and medial PFC were obtained.Conclusions/SignificanceThese results support the hypothesis that one effect of expert advice is to “offload” the calculation of value of decision options from the individual's brain.

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JO - PLoS ONE

JF - PLoS ONE

SN - 1932-6203

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