Financial advice makes the brain 'follow blindly'

Expert financial opinion can make a person's brain disengage from any decision-making and blindly agree with the advice being given, a new study suggests.

 

By Caroline Gammell 
Last Updated: 2:46PM GMT 24 Mar 2009

From the following link:

http://www.telegraph.co.uk/news/uknews/5043174/Financial-advice-makes-the-brain-follow-blindly.html

The brain "offloads" its normal calculations if faced with an authoritative figure because claims of expertise were found to suppress activity in the neural circuit linked to decision-making.

It means that people who make decisions after speaking to a financial adviser or a bank manager may be helpless to avoid following their lead.

The research, published in the Published Library of Science One, studied the brains of 24 volunteers who were asked to make several financial choices.

They were asked to choose between a guaranteed payment and gambling on the lottery and received advice at different stages of the process.

When the volunteers were advised to follow a certain course of action, they tended to follow that advice, even if it was not the best solution.

Brain activity was notably different on the occasions a person received an "expert opinion" and when they made a decision on their own.

Author of the study Gregory Berns, Professor of Neuroeconomics and Psychiatry at Emory University in Atlanta, said: "This study indicates that the brain relinquishes responsibility when a trusted authority provides expertise.

"The problem is that it can work to a person's detriment if the trusted source turns out to be incompetent or corrupt."

He went on: "Seeking advice from experts is common practice. The most prominent situations in which people turn to experts for advice occur under conditions of enhanced uncertainty, such as an economic recession.

"During such times, people may feel unfit to predict the consequences of their choices, and may seek the counsel of experts to reduce the enhanced perception of risk.

"Our behavioural results indicated that the expert's advice significantly influenced behaviour."