Interesting research from my alma mater CMU, on the neurological processes that occur at the moment we’re making a buying decision as customers.
"Their findings, recently published in Neuron,
suggest that there’s a battle in the brain between immediate pleasure
and immediate pain when we’re deciding what to buy. This contradicts
conventional economic theory, which states that people make decisions
based on immediate pleasure versus saving their buying power for some
future pleasure. The subjects in the MRI study weren’t thinking about
what benefits they would gain at some later date if they chose not to
purchase The Family Guy DVD set now. Rather, they were deciding based
on how painful (or not) they thought paying for it would be right now.
Loewenstein says that the findings helped
confirm what he and Prelec first noticed (i.e., that spending money can
be painful) in the early 1990s while collaborating on a paper. At the
time, they had to rely on mathematical models to prove their point. But
MRI technology now allows them to back up that claim with hard
data–real pictures of human brains that show real activity in the
brain’s pain center. Hard data is what Loewenstein hopes will
eventually lead to the acceptance of the field among doubters who still
hold fast to traditional economic theory.
Loewenstein hopes to follow up his research regarding the "pain of paying"
by exploring a growing and looming problem in the United States–why so
many people run up so much credit card debt. Much like he did in the
study with Knutson and Prelec, he wants to see what goes on in the
brain when someone pulls out plastic instead of money when making
purchases. His hypothesis is that credit cards numb the brain’s pain
center (i.e., reduce activity in the insular cortex) because no
currency is exchanged and costs are postponed, thus weakening the
body’s built-in defense mechanism against unnecessary purchases. He
believes that MRI testing could provide definitive answers." (empahsis added)