Neuroeconomics How Executives Think

I've been lying on my back inside a coffin-sized tube for what seems like hours. My head is wedged tight to avoid movement and I have plugs in my ears to cut down on the loud clicks and odd clanks, bings, and bongs inside the tube.

EXPERIMENTAL MAN David Ewing Duncan explores advances in personalized medicine and what they can tell us about ourselves.

My eyes are locked onto a series of images on a screen above my head that display different bets I can choose that involve winning or losing the $100 in cash I was given before climbing into the tube.

I'm undergoing a functional magnetic resonance imaging scan at the Center for Neural Science at New York University to see what happens inside my head when I gamble. The scan, by continually monitoring the flow of oxygen-rich blood, can show which regions of my brain activate and connect to one another based on my expectations, decisions, victories, and defeats.

Understanding this circuitry is part of a decade-old field called neuroeconomics, which is searching for nothing less than a physical basis for why people make the choices they do in business and other activities, and how we might better predict behaviors.

In the tube, I'm given a choice between two pie charts, each one offering a chance to make or lose money. One pie might offer a 50/50 chance of making or losing $5; the other pie would offer a 75 percent chance of losing $5, and a 25 percent chance of winning the same amount.

Obviously, I pick pie No. 1, clicking a button on a small box in my hand. Then the computer decides whether I win or lose, with the odds of each decision dependent on the pie I chose. The test is timed—if I hesitate and don't click a choice in one second, I lose $10.

While I'm gambling, a giant magnet surrounding the tube is zapping my brain with harmless radio waves that can detect subtle changes in the density of tissue inside my head, and measure spikes in blood flow to regions that have been activated either consciously or subconsciously.

In this case, the region is the striatum, which receives inputs from the dopamine neurons in the midbrain. When you get rewards, the brain carries extra oxygen into the stratium, and these increases can be detected by the fMRI.