Proving a fear of losing, losing face
Auction experiments show activated brains and overbidding.
Winning isn't everything, of course. But losing might be.
The psychology of loss is a hot topic right now, so a team of economists and neuroscientists decided to tackle one intriguing slice: When does your brain light up at an auction?
Most people overbid, a phenomenon that has long puzzled economists. The most common explanations, the researchers write in the current issue of Science, are a desire to avoid risk or to experience the joy of winning.
To test these theories, they enrolled volunteers in a series of simulated silent "auctions" (bidding against a person they had met) and "lotteries" (deciding repeatedly whether or not to bid against a computer). All while lying in functional MRI machines that scanned their brains.
The resulting images clearly showed the greatest activity in the brain's right striatum - an area involved with reward - when the subject lost a contest with a human.
Hypothesizing that fear of loss might trigger overbidding, the researchers next set up auctions that were framed to emphasize winning (participants were told that successful bidders would take home their winnings plus $15) or losing (everyone was given $15 beforehand and told that unsuccessful bidders would have to give it back).
Overbidding was highest when the auction emphasized loss. The faux auctioneer made more money, too.
Fear of losing in front of one's peers presumably could be an incentive - and theoretically could be proven with brain scans - in everything from sports to politics.
"Fear in general is pretty primal," says cognitive neuroscientist Mauricio Delgado, a research team member while at New York University. He's now at Rutgers, studying the activity of brains facing a loss of status.
- Don Sapatkin