Money Troubles? Blame your Brain!

What can neuroscience teach us about financial risk?

Neuroscientists at the California Institute of Technology report that the amygdalae – two almond-shaped clusters of tissue located deep in the brain and which register rapid emotional reactions – are responsible for the fear of losing money.

In a previous blog post I described how the size of your amygdala (plural; amygdalae) is related to the size of your social network. Well it gets a lot more interesting!  A recent study of amygdala-damaged patients – described in a paper entitled Amygdala damage eliminates monetary loss aversion in the prestigious scientific journal Proceedings of the National Academy of Sciences (PNAS) – may also offer insight into the state of your monthly bank balance.

The study involved an examination of two patients whose amygdalae had been destroyed due to a very rare genetic disease; those patients, along with individuals without amygdala damage, volunteered to participate in a simple gambling task.

In the task, all individuals were asked whether or not they were willing to accept a variety of gambles, each with a different possible gain or loss.

For example, all individuals were asked to choose from the following three gambles.

  1. Take a gamble to win $20 or lose $5 (a risk most people will choose to accept).
  2. Take a gamble to win $20 or lose $20 (a risk most people will not choose to accept).
  3. Take a gamble to win $20 or lose $15 (a risk most people will reject even though the net expected outcome here is positive).

It turns out that both of the amygdala-damaged patients took risky gambles much more often and showed no aversion to monetary loss whatsoever, in sharp contrast to those individuals of the same age and education who had no amygdala damage.

The findings suggest that the amygdala is critical for triggering a sense of caution toward making gambles in which you might lose – similar to its role in fear and anxiety. Your brain’s very own Fort Knox!

Who knows but sometime in the future we may be required to undergo a brain scan to check the size of our amygdalae in order to qualify for a credit card, enrol for a business degree or manage a bank!

Maybe the next ten years of brain research should be dedicated – the decade of the amygdala – to help us relearn a healthy sense of respect for money and get us back into the black?

Weekly Round Up

How does cigarette addiction affect the brain?

The effects of nicotine upon brain regions involved in addiction mirror those of cocaine, according to new neuroscience research.

Aspirin and other anti-inflammatory drugs taken for pain relief may reduce the effectiveness of anti-depressants such as Prozac, say US researchers.

Moments of absent mindedness such as losing your keys could be the result of tiny parts of the brain taking “naps” to recharge, a study finds.Researchers discovered that contrary to popular opinion the brain is not always entirely asleep or awake but parts of it can go “offline”.

Neuroscientists at the California Institute of Technology and their colleagues have tied the human aversion to losing money to a specific structure in the brain-the amygdala.

Music is not only able to affect your mood — listening to particularly happy or sad music can even change the way we perceive the world, according to researchers from the University of Groningen.

The positive effects of mindfulness meditation on pain and working memory may result from an improved ability to regulate a crucial brain wave called the alpha rhythm. This rhythm is thought to “turn down the volume” on distracting information, which suggests that a key value of meditation may be helping the brain deal with an often-overstimulating world. And in other  mindfulness research – fMRI shows how mindfulness meditation changes the decision making process