Brain, Decision, and Debt

Abstract

In this chapter, we summarize recent $ ndings in neuroeconomics suggesting that emotion (speci $ cally, “anticipatory a % ect”) can in & uence $ nancial decisions, and then discuss how individual di % erences in anticipatory a % ect may promote prone-ness to consumer debt. ' anks to improvements in spatial and temporal resolution, functional magnetic resonance imaging (FMRI) experiments have begun to suggest that activation of a brain region associated with anticipating gains (i.e., the nucleus accumbens or NAcc) precedes an increased tendency to seek $ nancial gains, whereas activation of another region associated with anticipating losses (i.e., the anterior * Much of the research described in this chapter was supported by funding from the National Institute on Aging (R21-AG030778, P30-AG017253, P30-AG024957, F31-AG032804) and the FINRA Investor Education Foundation. ' e views expressed here are those of the authors and not of our funding agencies. We thank Alan M. Garber and Camelia M. Kuhnen for their ongoing contributions to our thinking about the psychology of debt. Portions of this chapter were adapted from Knutson and Greer (2008).

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