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January 14, 2008

EP & neuroeconomics: how thinking about the price of wine tweaks your brain's sensation of pleasure

I just received this e-mail message: "Due to an embargo break, PNAS [Proceedings of the National Academy of Sciences] is lifting the embargo early on the following paper: Article #07-06929: "Marketing actions can modulate neural representations of experienced pleasantness [EP]," by Hilke Plassmann, John O'Doherty, Baba Shiv, and Antonio Rangel." (PDF)

Basically, the researchers had their subjects lying flat on their backs in an fMRI scanner using computerized pumps to send different wines to their lips via a plastic tube as brain scans were performed. They gave the subjects a taste of 5 different Cabernet Sauvignons, but here's the twist as reported in their paper:

Unbeknown to the subjects, the critical manipulation was that there were only three different wines, and two of them (wines 1 and 2) were administered twice, one identified at a high price and one at a low price. For example, wine 2 was presented half of the time at $90, its retail price, and half of the time at $10. Thus, the task consisted of six trial types: $5 wine (wine 1), $10 wine (wine 2), $35 wine (wine 3), $45 wine (wine 1), $90 wine (wine 2), and neutral solution.

So wine 1 was given twice, once telling the subjects the real price ($5), then inflating the price 9x to $45. Wine 2 really costs $90, but was given a second time, and the subjects were told it was a $10 wine, or 9x less.

Just to take a step back, an fMRI (functional magnetic resonance imaging) imge lights up when an increase in blood flow occurs in any part of the brain. This is supposed to correlate with increased neural activity, since it is assumed that this creates a higher oxygen demand.

Now, from their abstract:

Our results show that increasing the price of a wine increases subjective reports of flavor pleasantness as well as blood-oxygen-level-dependent activity in medial orbitofrontal cortex [mOFC], an area that is widely thought to encode for experienced pleasantness during experiential tasks.


This illustration from their paper shows the graphs of increased percent signal change in fun-loving mOFC. Graph A shows results of wine 1 and D, wine 2. You can see in both cases that when the subject was told it was a higher price wine (green lines, the uppermost lines in A and D), there was a greater, and the authors assume, a more pleasurable response. On the right, you can see the mOFC signalling, "yes, yes, I'll take more of the high-priced stuff, please."

The authors conclude that while "[a] basic assumption in economics is that the experienced pleasantness (EP) from consuming a good depends only on its intrinsic properties and on the state of the individual," they can now offer the a neuronal basis for evaluating EP--a field which may be called neuroeconomics. This can be thought of as using the placebo effect to make the public think they're going more than they're paying for, but it also suggests a quantitative approach to study how perception can increase the EP and therefore the value of a product.

BTW, their gadget that lets you drink wine while lying down might be marketable, but I'd stay away from the $5 stuff.


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