Summary: New study in neuroeconomics explores the mental processes behind buying decisions, revealing how factors like company reputation, pricing, and online than in-person experiences influence purchases. The lateral striatum, a mind region linked to praise, evaluates products even without effective decision-making.
Brands give confidence and experience, shaping customer preferences at a neurological level. By understanding these methods, consumers can make more purposeful, responsible choices that feel just as enjoyable as purchase.
Essential Information
- Mental Action in Shopping: The dorsal striatum evaluates materials, while other wires consider pricing and decisions.
- Brands and Reward: Brands generate trust and experience, activating brain regions linked to praise.
- Green Rewards: Non-material encounters, like massages, can trigger the same incentive circuits as purchases.
Origin: UCSD
Some people find this the best time of year to spend money. The National Retailer Federation estimates that 197 million people visited stores between Black Friday and Cyber Monday. On Black Friday only, consumers spent a document$ 33.6 billion.
Media outlets were flooded with advertising designed to entice customers to leave with their money in exchange for goods and services in the days leading up to Black Friday.
But what really influences women’s decisions to buy? What happens to them when they are buying anything, both psychologically and physically? And is there a hobby that is equally enjoyable but less costly and more green?
In Uma Karmarkar’s study, the variables that consciously and unconsciously influence how people make choices, including payments, are examined. What does this mean for businesses?
The associate teacher, who holds a joint session at UC San Diego’s Rady School of Management and School of Global Policy and Strategy, was just selected to be part of this month’s group of the , Marketing Science Institute ‘s , Mid-Career Scholars, and she now serves as chairman for the , Society for Neuroeconomics.
” Neuroeconomics is a field of study that uses theories and methods from science, psychology and economics to better understand how people make real-world selections”, Karmarkar said.
Karmarkar, who holds a Ph. A second Ph.D. in biology was obtained from UCLA. From Stanford, a doctor of consumer behavior, spoke with UC San Diego Today to provide more history on neuroeconomics and discuss the science behind buying.
First, what attracted you to the area of neuroeconomics?
To aid in our ability to track time, learn new things, or recall fresh memories, I began my academic career in neuroscience by studying how personal brain cells organized, stored, and transmitted information in networks.
As I became more knowledgeable about the developing industry of neuroeconomics, I began to understand decision-making as a complicated process that could use all the mental capabilities I was studying in a variety of definitely intriguing way. Additionally, I could draw connections between basic technology research and common people behavior from this topic.
I found it quite exciting that we could create models from head to head to model our behavior in terms of our choices regarding our finances, careers, or health, or even where to buy groceries.
How do you research neuroeconomics?
Ultimately, neuroeconomists are interested in choices, but we conduct a lot of psychology and/or cognitive experiments in which subjects make choices or provide details about how they evaluate their choices.
Functional magnetic resonance imaging ( fMRI ) scanning, a method that allows you to track how activity changes in people’s brains while they’re making various kinds of decisions, has also been a focus of my own research.
To find out what information people paid attention to or found helpful, I’ve even done some work with eye-tracking, or measuring what people look at and how much they look.
My field-based associates also employ a variety of different neurophysiological techniques, including biology, hormone testing, and even mental excitement techniques.
What happens in the mind during buying, and how does it differ between doing in-person and online shopping?
There’s a bunch going on! At the simplest level, it turns out there’s a part of the brain, (ventral striatum ) that rules how far we like the things we are seeing, perhaps if we’re not constantly making a buying decision about them. To simplify things a little, you may say that at least portion of your brain is metaphorically often perusing the aisles.
Numerous studies, including my own, advise that we employ more neural circuitry to consider the cost, our willingness to pay for the item, and the total decision when we do begin to consider whether to purchase that item. These liking-and-paying mental processes are identical across in-person than online shopping.
Other studies have suggested that there are factors that can affect how people interact with real products and displays when they visit stores as opposed to websites.
How does the brain react to goods made by a company?
Brands may provide experience and confidence in circumstances where we’re unsure of the product to purchase, and this assurance is rewarding at the level of the mind. We have memories of models and have associations with them that influence our decisions.
These relationships with brands are solid and multi-faceted, but they are different from those we have with people, according to research into consumer psychology. It’s helpful to know that our brains work differently for a company we like than they do for people we like.
How do businesses employ neuroeconomics to promote their goods?
Consumer biology is a key area of my study in neuroeconomics, which means it addresses consumer research questions. While some companies run their own “neuromarketing” studies, many draw from customer science findings like me to tell their advertising strategies.
As one example, I’ve talked to firms about the kinds of products they might use in their “recommended” items when shopping online. Imagine you’re looking at a sweater store and considering adding it to your shopping list.
Other products that are recommended might also be displayed on the page.  , I’ve done eye-tracking work , suggesting you’re more likely to buy the sweater if it “matches” the recommended products, like seeing your preferred sweater with other sweater options.
The presence of matched products on the page helps you feel more engaged with a” sweater-specific” decision. But if you’re seeing mismatches, like earrings or even home goods, you look around more and you’re less likely to buy. The range of mismatched products ( literally ) takes the focus off sweaters in particular.
How can consumers choose actions that are more environmentally conscious and have the same rewards as purchasing a product?
The good news for us all is that the same brain regions that respond to the rewards of purchasing things also have the same effect on the pleasures of life. So beyond necessities, we have options for treating ourselves in different ways, including more sustainable ones. Maybe a massage is a more sustainable option than a product made of non-recyclable plastic. It doesn’t have to be a sacrifice.
We enjoy novelty and new things, which is another aspect of this. So, over time, we lose the sense of reward that we are rewarded for our possessions. It’s difficult to resist the reward of a new item, even if we still enjoy our things.
However, consumers are already beginning to recognize that being “new to me” can be just as rewarding and that there are pleasures in discovering something or renewing its value.
How does your work encourage more deliberate consumption of resources?
The most valuable piece of advice is probably some of the least useful: to be a more conscious consumer, think about your objectives before entering retail situations.
Impulse purchases are called that for a reason — as I mentioned, your brain is always browsing. It’s more difficult to make plans in the moment if you don’t have a plan for how much you want to spend ( and why ). That’s also why shopping lists are a key decision-making tool.
Another tip I learned is to remember to step back and open your” consideration set,” and think about all the other ways you could use your time and money. If the product you’re considering stays in your mind, perhaps it’s the right choice in the end.
About this news from neuroeconomics research
Author: Christine Clark
Source: UCSD
Contact: Christine Clark – UCSD
Image: The image is credited to Neuroscience News
