Wednesday, March 25, 2009

Financial advice can 'off load' decision process

A study using fMRI shows that expert financial advice may shut down areas of the brain responsible for decision-making processes. "The expert provided very conservative advice, which in our experiment did not lead to the highest earnings. But the brain activation results suggested that the offloading of decision making was driven by trust in the expert," said Monica Capra, assistant professor of economics and co-author of the study.

The study results were featured on CNN International, and in a New Scientist article: "Brain quirk could help explain financial crisis."

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