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Perceptions Of Morality Influence Economic Decisions, Brain Responses To Rewards

Date:
October 17, 2005
Source:
New York University
Summary:
How we perceive another's moral character can influence the nature of our economic decisions and the neural mechanisms underlying these choices, according to a new study by researchers at New York and Cornell universities. The findings, which appear in the latest issue of the journal Nature Neuroscience, run counter to the assumptions favored by many economists that individuals behave opportunistically.

How we perceive another's moral character can influence the nature ofour economic decisions and the neural mechanisms underlying thesechoices, according to a new study by researchers at New York andCornell universities. The findings, which appear in the latest issue ofthe journal Nature Neuroscience, run counter to the assumptions favoredby many economists that individuals behave opportunistically.

The study's researchers were Mauricio Delgado, a post-doctoral researchfellow at NYU, Robert Frank, an economics professor at Cornell'sJohnson School of Management, and Elizabeth A. Phelps, a professor ofpsychology and neural science at NYU.

In conducting the study, researchers examined brain responses whileparticipants performed a "trust game" involving two-person interactionsin which mutually beneficial outcomes are more likely if partners aretrustworthy and perceive one another as such. Participants could eitherkeep $1 on a given trial or transfer it to a partner, in which case thepartner would receive $3. The partner could either keep the entire $3or share half of it back. It was thus advantageous to transfer money toa partner who was expected to share, but disadvantageous to transfermoney to one not expected to share.

Participants were instructed that they would be playing with threefictional partners and were given detailed descriptions of eachpartner's life events indicating praiseworthy, neutral, or suspectmoral character. Participants were also told that their fictionalpartners' responses would not necessarily be consistent with thedescriptions given. In fact, each of the three fictionalpartners--"good," "bad," and "neutral"--was programmed to share halfthe time and keep half the time.

Despite having been warned that the fictional partners' behavior mightnot match their descriptions, participants were initially much morewilling to transfer money to good partners, and much less willing totransfer money to bad partners. But after having completed multipletrials with each type of partner, participants reported correctly thatthe different partners seemed to be sharing at about the same rate.Strikingly, however, participants continued to be more likely to trustgood partners and less likely to trust bad ones, even though theyindicated explicit knowledge that the response patterns for thedifferent types were the same.

In mapping participants' underlying neural processes, the researchersdiscovered activation in the brain's striatum--more specifically, astructure called the caudate nucleus--which had previously been linkedto reward processing. The brain responses matched the patternstraditionally seen during trial and error reward learning (i.e.,differential responses between positive and negative feedback) onlywhen participants were interacting with the neutral partner. Incontrast, activation was either weak or absent when subjects wereplaying with good or bad partners.

"It was as if the influence of participants' prior impressions servedto disrupt some of their normal feedback learning mechanisms andconsequently affected their ability to adapt choices," explainedDelgado.

The study's findings run counter to the self-interest model in economics.

"The self-interest model predicts that people should be skeptical ofeveryone," Frank said. "Yet people seem reluctant to adopt that posturetoward someone described as trustworthy, even when they know thedescription is fictional."

According to Phelps, these findings suggest that "second-hand accountsof moral character can override the impact of first-hand experience oftrustworthiness as expressed in both behavioral choices and theunderlying neural mechanisms"

###

The research was supported by National Institute of Mental Health, theJames S. McDonnell Foundation, the Beatrice and Samuel A. SeaverFoundation, and Cornell's S.C. Johnson School of Management.


Story Source:

The above story is based on materials provided by New York University. Note: Materials may be edited for content and length.


Cite This Page:

New York University. "Perceptions Of Morality Influence Economic Decisions, Brain Responses To Rewards." ScienceDaily. ScienceDaily, 17 October 2005. <www.sciencedaily.com/releases/2005/10/051017071630.htm>.
New York University. (2005, October 17). Perceptions Of Morality Influence Economic Decisions, Brain Responses To Rewards. ScienceDaily. Retrieved July 26, 2014 from www.sciencedaily.com/releases/2005/10/051017071630.htm
New York University. "Perceptions Of Morality Influence Economic Decisions, Brain Responses To Rewards." ScienceDaily. www.sciencedaily.com/releases/2005/10/051017071630.htm (accessed July 26, 2014).

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