When given expert financial advice, people’s brains grow dull

According to a study led by an Emory University neuroscientist, the decision-making areas of the brains of people given “expert” financial advice decrease in activity. Given the ange and quality of advice available, this isn’t necessarily a good thing:

“When the expert’s advice made the least sense, that’s where we could see the behavioral effect,” said study co-author Greg Berns, an Emory University neuroscientist. “It’s as if people weren’t using their own internal value mechanisms.”

Then there’s this shocker:

Contrary to neoliberal economic theory, markets are not always driven by individuals acting rationally in their own best interests.

It’s safe to say we’ve seen that this is true and are now enjoying the results.
This phenomenon obviously does not extend to experts in all fields. I’d like to see the brain scans of, for example, creationists following exposure to the declarations of evolutionary biologists. Their brains would seemingly be shown to shut down, but not in a manner that implies any sort of trust or abdication of convictions. Of course, most people seeking financial advice are admittedly clueless and free of preconceived ideas, whereas with creationists this is obviously not the case.

  1. #1 by Coturnix on March 26, 2009 - 2:49 pm

    Hey Kevin, the paper is Open Access so you should send your readers to it: http://www.plosone.org/article/info:doi/10.1371/journal.pone.0004957
    You can also send a trackback: http://www.plos.org/cms/node/261

  2. #2 by Snowbird on March 26, 2009 - 10:16 pm

    I think it’s probably because the brain of a rational person is too shocked to believe that anyone could be so stupid and still be trusted with someone’s financial well-being that causes this problem. Most financial “experts” I’ve dealt with are like creotards — they believe the most worthless woo that you can believe, and are unshakable in their belief they are right even when they lose 90% of their assets.

%d bloggers like this: