New York University neuroscientists and economists have combined functional MRI with behavioral economic research to discover why people tend to overbid for products sold at auction: fear of losing a social competition.
Investigators examined brain activation patterns while volunteers played either an auction game with a partner or a lottery game.Winning the auction game depended on outbidding a partner, a key social difference that could be seen in variations of activation in the striatum. Past fMRI studies have linked the striatum with reward-related brain activity.
The study was published in the Sept. 26 issue of the journal Science (2008;21 [5897]:1849-1852).The social competition inherent in an auction produced a more pronounced blood oxygen level-dependent response to losing an auctioned item than to winning it.
The magnitude of the BOLD effect correlated directly with the amount of overbidding. A follow-up behavioral economic study confirmed these findings in real life.
