- [Colin] We have a saying 
in neuroscience sometimes:

"Don't ask the person,
ask the brain,"

because the brain activity
may be something

that's less than fully conscious.

♪ [music] ♪

My research is about
behavioral economics

and neuroeconomics.

And behavioral economics

is using ideas from psychology
and other social sciences

to make economics
a little bit more lifelike

and fit human behavior.

The neuroeconomics part 
is that we actually try to see

what's happening in the brain

when people are making 
economic decisions.

Hypothetical bias is a term 
for when you ask somebody

whether they're going
to do something,

but there's no actual consequences,

like a lot of surveys:
"Are you going to vote?"

"Will you buy 
this new product we have?"

You tend to get a kind 
of upward "yes" bias.

People are more likely to say,
"Yeah, I'd think I'd buy it"

or "Oh, yeah,
I'm planning to vote."

The hypothetical bias
can be pretty high,

and it can be also retrospective.

So if you ask people did they vote,

70% say yes and really 
the answer was 45%.

One application is 
in things like marketing.

A lot of new products fail,
and one reason they fail

is because when 
they test marketed,

a lot of people said, 
"Yes, I'd buy it,"

who weren't going to buy it.

One thing that people 
have been chasing

in different fields in economics
and psychology is

how could we measure the size 
of this bias and adjust for it?

So that if 70% of the people say
they're going to buy a new product,

we know that 
the real number is 45%.

We did a couple of studies
using brain imaging to say

is there a kind
of signature in the brain

of when somebody says, 
"Yes, I would buy it,"

but when they really have 
to choose, they say no.

So we showed them pictures
of different goods,

and the first part 
of the experiment, we asked them,

"Would you pay $27 
for this backpack, yes or no?" --

that's the hypothetical part.

And then we kind of surprised them,
when they come out of the scanner,

and we say to them,
"Oh, by the way,

now we're going to actually
have you decide to spend money,

so we're going to give you $50."

If you want to buy
the backpack for $27,

we're going to take it
out of your 50,

so that now they have
to make real decisions.

And then we study 
in the brain imaging,

could we tell what areas 
were saying yes,

but actually would later say no,

compared to the areas that said,
"Yes, I think I'll buy it,"

and, yes, they really did buy it.

And we found both
more activity in certain regions

associated with valuation

and then activity
in different regions,

which were somewhat predictive

of when a yes was going to turn
into, "Well, not really."

In some other studies 
on hypothetical bias,

we used eye tracking, 
which is a computerized way

of seeing what you're looking at
for how long.

It also measures pupil dilation.

When you're aroused 
by something that you like

or possibly you're scared,
the pupil dilates a little bit.

So we used that method

and then another method
using mouse movements.

And so we found 
that the mouse tracking

and the eye tracking
actually could give us an idea

of when people would say, "Yes, 
I'm going to buy this product,"

but then they really didn't
when they had skin in the game

and had to buy it.

The quicker a person moves a mouse
to a box to click on something,

the more they like it.

It's like a fast trajectory,
"I really like this."

A slow meandering trajectory is, 
"Well, I don't know. I'm not sure."

The motor activity in the mouse is
actually an index in economic value

as well as some other things,
like indecision.

We live in a kind of golden age
of social science

in which we can measure things
in lots and lots of different ways.

So one thing we've just begun

that I think is going 
to be really, really fun

is in order to study habit
and a bunch of other things,

we bought a smart vending machine,

and a smart vending machine

is basically a vending
machine in the back

and a giant iPad in the front.

So you could program the iPad
to show whatever you want.

For example, if somebody
buys habitually,

and you raise the price
by a few percent,

do they just ignore that

because they're not 
even looking at the price?

Eventually, we'd like also
to be able to use

webcams or cameras to record,

so when I say somebody
is not looking at the price,

I really mean they are
not looking at the price

because the camera looked
at where their eyes were looking.

- [Narrator] Want to see 
more economists in the wild?

Check out our playlist.

Are you a teacher?

Here's some related material 
for your classroom.

♪ [music] ♪