Brain, Decision, and Debt
This chapter summarizes recent findings in neuroeconomics suggesting that emotion (specifically, "anticipatory affect") can influence financial decisions. It then discusses how individual differences in anticipatory affect may promote proneness to consumer debt. Thanks to improvements in spatial and temporal resolution, functional magnetic resonance imaging experiments have begun to suggest that activation of a brain region associated with anticipating gains (i.e., the nucleus accumbens or NAcc) precedes an increased tendency to seek financial gains, whereas activation of another region associated with anticipating losses (i.e., the anterior insula) precedes an increased tendency to avoid financial losses. By extension, individual differences in increased gain anticipation, decreased loss anticipation, or some combination of the two might promote proneness to debt. Ultimately, neuroeconomic advances may help individuals to optimize their investment strategies, as well as empower institutions to minimize consumer debt.
Duke Scholars
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