How marketing affects the brain

I'm taking Dr. Hunt's History of Wine course at Stanford University CSP - a great learning experience. Wine fascinates me not only because (in moderate amounts) it stimulates creative thinking. From an inventor perspective, wine is interesting because it defies the common wisdom "Necessity is the mother of invention." We, humans, invented and perfected an incredible variety of wines and spirits just to make our lives more enjoyable. Arguably, the invention of wine turned enjoyment into a necessity in the modern society. Since enjoyment is a highly subjective matter, wine can serve as our entry point into the world of studying how attitudes affect human perceptions and thinking.

In 2007, a group of scientists from CalTech used wine tasting to study the impact of marketing on people's brains.

It's been widely reported that when subjects know the price of wine they consistently give high ratings to expensive wines. It's also known that in blind trials subjects don't find much difference between expensive and cheap wines. The important questions are, "How does the price information skew our brainwork? Does expensive wine taste better because we anticipate a better tasting experience from an implicit marketing message that a higher price means a higher product quality?" Here's an excerpt from the published paper:

Because perceptions of quality are known to be positively correlated with price (9), the individual is likely to believe that a more expensive wine will probably taste better. Our hypothesis goes beyond this by stipulating that higher taste expectations would lead to higher activity in the medial orbitofrontal cortex (mOFC), an area of the brain that is widely thought to encode for actual experienced pleasantness (6, 10–16). The results described below are consistent with this hypothesis. We found that the reported price of wines markedly affected reported EP and, more importantly, also modulated the blood-oxygen-level-dependent (BOLD) signal in mOFC.

In short, a $90 price tag activated the brain's pleasure center more than a $10 one - an almost 10X impact! Since in both cases researchers used the same wine, areas of the brain responsible for the more basic perceptions, including smell and taste, did not make any difference. The findings of the study was consistent with the placebo effect. External marketing information dominates internal perceptions.

As an exercise in creative thinking, we can try to use these results beyond the realm of wine tasting. For example, how does a perceived value of a startup or its founders affect the valuation in the early stages of financing when no objective data can be found yet? Are hype cycles are endemic in the high-tech industry because there's an inevitable time gap between the real and imaginary results of proposed innovations? Is the Mathew Effect hardwired into human brains?

tags: effect, brain, entrepreneurship, biology, research, science, perception, hype

Reality Distortion Field (RDF) discovered.

Here's what Wikipedia tells us about Steve Jobs' RDF:

Reality distortion field (RDF) is a term coined by Bud Tribble at Apple Computer in 1981, to describe company co-founder Steve Jobs' charisma. The RDF was said by Andy Hertzfeld to be Steve Jobs' ability to convince himself and others to believe almost anything with a mix of charm, charisma, bravado, hyperbole, marketing, appeasement and persistence. RDF was said to distort an audience's sense of proportion and scales of difficulties and made them believe that the task at hand was possible.

Is RDF real? Yes, seems the the answer. According to an MRI study conducted at Aarhus University in Denmark,

We find that recipients’ assumptions about senders’ charismatic abilities have important effects on their executive network. Most notably, the Christian participants deactivated the frontal network consisting of the medial and the dorsolateral prefrontal cortex bilaterally in response to speakers who they believed had healing abilities. An independent analysis across subjects revealed that this deactivation predicted the Christian participants’ subsequent ratings of the speakers’ charisma and experience of God’s presence during prayer.

In summary, interaction with a perceived charismatic person inhibits critical thinking. Furthermore, once the charismatic person becomes an authority figure ("genius"), the effect is combined with people's natural tendency to conform.

tags: psychology, control, communications, innovation, effect, cognition

Source: Uffe Schjoedt, et. al. The power of charisma—perceived charisma inhibits the frontal executive network of believers in intercessory prayer. Soc Cogn Affect Neurosci (2011) 6 (1): 119-127. doi: 10.1093/scan/nsq023 First published online: March 12, 2010.

Problem of the Day: Sugar Addiction.

A comment in Nature (Feb 2, 2012) about addictive properties of sugar:

Sugar also has a clear potential for abuse. Like tobacco and alcohol, it acts on the brain to encourage subsequent intake. There are now numerous studies examining the dependence-producing properties of sugar in humans6. Specifically, sugar dampens the suppression of the hormone ghrelin, which signals hunger to the brain. It also interferes with the normal transport and signalling of the hormone leptin, which helps to produce the feeling of satiety. And it reduces dopamine signalling in the brain’s reward centre, thereby decreasing the pleasure derived from food and compelling the individual to consume more.

The more sugar we consume (either through food or drink), the hungrier we feel. Therefore, sugary drinks in combination with junk food make a lot of business sense, if one wants sell a lot of food.

tags: effect, health, problem

All you need is love!

Feb 14, 2012. NS -- ...falling in love also appears to buffer people from negative emotions. They showed 55 new lovers and 57 single people six video clips, including two selected to trigger positive emotions and two that would trigger negative emotions. Electrodes were used to monitor the volunteers for signs of stress.

While single people showed signs of stress when watching the negative films, new lovers seemed to be unaffected by them (Emotion, DOI: 10.1037/a0024090).

To improve the economy, or at least how people feel about it, the government should have sponsored massive love fests and invested in dating services. Also, sponsoring Twitter love bots and Facebook "heart" apps would help to relieve the pain of unemployment among young people.

tags: problem, solution, effect, social, emotion, psychology

The good, the bad, and the loss aversion bias.

Nobel Laureate Daniel Kahneman writes about the bad news bias:

The brains of humans contain a mechanism that is designed to give priority to bad news. No comparably rapid mechanism for recognizing good news has been detected. Threats are privileged above opportunities, as they should be. Loss aversion is one of many manifestations of a broad negativity dominance in people.

John Gottman, an expert in marital relations, observed that the long-term success of a relationship depends far more on avoiding the negative than on seeking the positive. Gottman estimated that a stable relationship requires that good interactions outnumber bad ones by at least 5-to-1.

By now, there must be a smartphone app for counting good and bad martial interactions. You can probably hook it up to facial, voice, or some other vital signs detection/recognition software.

His three other articles on Bloomberg (Part 1, Part 2 and Part 4.)

In the meantime, here's your good news of the day: Justin Bieber reaches 2B YouTube views.




tags: reverse brainstorm, mobile, psychology, problem, effect

According to research cited in Wired, travelers seem to think that south-bound routes are shorter than north-bound ones of the same length. The authors of the study explain the effect by a common perception that north is "up" on all maps, therefore people instinctively associate "north/up" with working against gravity.

For journeys that averaged 798 miles, time estimates for north-going jaunts averaged one hour and 39 minutes more than south-going trips, he and his colleagues report in an upcoming Memory & Cognition.

“This finding suggests that when people plan to travel across long distances, a ‘north is up’ heuristic might compromise their accuracy in estimating trip durations,” Brunyé says.

Moving up through a company hierarchy is also more difficult than down. It must be the gravity :)

tag: psychology, effect, example

Hong Kong's air polution: 500 on a 0 to 500 scale.

An update to my yesterday's post about China's need for new energy infrastructure:

NYT: Air pollution in Hong Kong, one of the perpetual banes of living and working in this Asian financial hub, reached record levels on Monday, setting off an official government warning to avoid outdoor activities and physical exertion.

Pollution levels are now 12 to 14 times the amount recommended by the World Health Organization, according to the Clean Air Network

Some of it is due to a major sandstorm in northern China. But sandstorms are a regular event in this part of the world; they are not going away any time soon. All this makes deployment of clean energy technologies even more desirable.

tags: problem, energy, effect, economy, system

The spinning woman illusion. To me, she always seem to spin clockwise: from right to left; and I have to make a conscious effort to look at the figure sideways to it reverse the direction.

The link comes courtesy a New Scientist article that proposes:

...when people make decisions, their pupils dilate, a subtle cue that could be used to predict a person's intentions, or even converse with people with locked-in syndrome.

A useful clue in negotiations. It would be good to have a monitoring device that tracks, Blade runner-style, your opposition's pupils.

The title of the article is slightly misleading, though. It mentions wide eyes rather than dilated pupils. The "wide eyes" effect is a sign of interest from another person, rather than decision-making activity. That's why men prefer women who listen to them with eyes wide open. Maybe the reporter for the story, Ewen Callaway, who is male, got carried away by his imagination. Or maybe it's a plot to grab our attention. Or maybe it's a little bit of both.

tags: psychology, effect, science, detection

Mind games

The placebo effect:

Several times a day, for several days, you induce pain in someone. You control the pain with morphine until the final day of the experiment, when you replace the morphine with saline solution. Guess what? The saline takes the pain away.

This is the placebo effect: somehow, sometimes, a whole lot of nothing can be very powerful.

The nocebo effect:

The placebo effect has an evil twin: the nocebo effect, in which dummy pills and negative expectations can produce harmful effects. The term "nocebo", which means "I will harm", was not coined until the 1960s, and the phenomenon has been far less studied than the placebo effect. It's not easy, after all, to get ethical approval for studies designed to make people feel worse.

An interesting knowledge asymmetry is developing in the mind-body science: due to ethical considerations, we will know a lot less about harmful nocebos than harmless placebos.

Selling with a smile

A curious outcome of a behavioral economics experiment:

a fleeting exposure to a smiling face makes people more likely to make risky investment decisions.
Volunteers who were shown a happy face were much more likely to choose the risky stocks. It made no difference whether the face was displayed long enough for the volunteers to register it consciously, or flashed up fleetingly so it was only perceived subliminally.

I wonder whether online smileys have the same effect. If the answer is yes, then it might mean that we somehow perceive the general mood of the situation, rather than a specific facial expression. :))))

Dilemma of the Day

As an inventor you want to create a snob effect, i.e. to find an exclusive path (solution) in a problem space.

As an innovator you want to create a bandwagon effect, i.e. to find a most common path in the problem space.

A simple solution to a difficult problem - chores and walks!

One 20-minute session of housework or walking reduced the risk of depression by up to 20 per cent. A sporting session worked better, reducing risk by a third or more. Failing housework or sport, says Hamer, try to find something physical to do. "Something - even for just 20 minutes a week - is better than nothing."