Wednesday 9 February 2011

Lizard brains

To the LSE for Paul Dolan's inaugural lecture. Ambitiously he aims to bring behavioural economics together with human happiness. It's a bravura performance to a house packed with people from across the political spectrum. This thinking is, after all, supposed to be one of the engines of the Big Society.

I rather like the fact that Dolan frames his lecture around a song from The Jam -- how young professors are getting, or am I simply getting old? But content wise I am most interested by the insights into how our ancient, instinctive limbic system, lizard brain to me, can be manipulated to any number of ends. He cites a study where a group of human guinea pigs were sent loan offers with randomised interest rates, additionally some of these offers were presented with the picture of an attractive woman. The results showed that people would give up a 1% interest rate advantage to sign up for the loan with the attractive woman. No they weren't all male respondents, nor lesbians, they were a properly balanced sample. The explanation? The lizard brains had taken over matching attractive human with attractive financial deal. So much for the rational decision making of Homo Economicus, much more Homer Economicus. I think this is all fascinating in its implications for economics, for the spurious sciences of consumer research and for the way (as Professor Dolan is working on just now) in which governments influence the public.

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