9:59:59.000,9:59:59.000 - [Colin] We have a saying [br]in neuroscience sometimes: 9:59:59.000,9:59:59.000 don't ask the person,[br]ask the brain 9:59:59.000,9:59:59.000 because the brain activity[br]maybe something that's less 9:59:59.000,9:59:59.000 than fully conscious. 9:59:59.000,9:59:59.000 ♪ [music] ♪ 9:59:59.000,9:59:59.000 My research is about behavioral [br]economics and neuroeconomics. 9:59:59.000,9:59:59.000 And behavioral economics is using [br]ideas from psychology 9:59:59.000,9:59:59.000 and other social sciences[br]to make economics 9:59:59.000,9:59:59.000 a little bit more lifelike [br]and fit human behavior. 9:59:59.000,9:59:59.000 The neuroeconomics part [br]is that we actually try to see 9:59:59.000,9:59:59.000 what's happening in the brain 9:59:59.000,9:59:59.000 when people are making [br]economic decisions. 9:59:59.000,9:59:59.000 Hypothetical bias is a term [br]for when you ask somebody 9:59:59.000,9:59:59.000 whether they're going to something,[br]but there's no actual consequences, 9:59:59.000,9:59:59.000 like a lot of surveys:[br]"Are you going to vote?" 9:59:59.000,9:59:59.000 "Will you buy [br]this new product we have?" 9:59:59.000,9:59:59.000 You tend to get a kind [br]of upward "yes" bias. 9:59:59.000,9:59:59.000 People are more likely to say,[br]"Yeah, I'd think I'd buy it," 9:59:59.000,9:59:59.000 or, "Oh yeah, I'm planning to vote." 9:59:59.000,9:59:59.000 The hypothetical bias can [br]be pretty high, 9:59:59.000,9:59:59.000 and it can be also retrospective. 9:59:59.000,9:59:59.000 So if you ask people did they vote, 9:59:59.000,9:59:59.000 70% say yes and really [br]the answer was 45%. 9:59:59.000,9:59:59.000 One application is [br]in things like marketing. 9:59:59.000,9:59:59.000 A lot of new products fail[br]and one reason they fail 9:59:59.000,9:59:59.000 is because when [br]they test market it, 9:59:59.000,9:59:59.000 a lot of people said, [br]"Yes, I'd buy it," 9:59:59.000,9:59:59.000 who weren't going to buy it. 9:59:59.000,9:59:59.000 One thing that people that people [br]have been chasing 9:59:59.000,9:59:59.000 in different fields in economics[br]and psychology 9:59:59.000,9:59:59.000 is how can we measure the size [br]of this bias and adjust for it. 9:59:59.000,9:59:59.000 So that if 70% of the people say[br]they're going to buy a new product, 9:59:59.000,9:59:59.000 we know that [br]the real number is 45%. 9:59:59.000,9:59:59.000 We did a couple of studies using[br]brain imaging to say 9:59:59.000,9:59:59.000 is there a kind of signature [br]in the brain of when 9:59:59.000,9:59:59.000 somebody says, [br]"Yes, I would buy it," 9:59:59.000,9:59:59.000 but when they really have [br]to choose, they say no. 9:59:59.000,9:59:59.000 So we showed them pictures[br]of different goods, 9:59:59.000,9:59:59.000 and the first part [br]of the experiment, we asked them, 9:59:59.000,9:59:59.000 "Would you pay $27 [br]for this backpack, yes or no?" 9:59:59.000,9:59:59.000 That's the hypothetical part,[br]and then we kind of surprised them 9:59:59.000,9:59:59.000 when they come out of the scanner[br]and we say to them, 9:59:59.000,9:59:59.000 "Oh by the way, now we're going [br]to actually have you decide 9:59:59.000,9:59:59.000 to spend money [br]so we're going to give you $50." 9:59:59.000,9:59:59.000 If you want to buy the backpack[br]for $27, we're going to take it 9:59:59.000,9:59:59.000 out of your 50, so that now[br]they have to make real decisions, 9:59:59.000,9:59:59.000 and then we study [br]in the brain imaging, 9:59:59.000,9:59:59.000 could we tell what areas [br]we're saying yes, 9:59:59.000,9:59:59.000 but actually would later say no[br]compared to the areas that said, 9:59:59.000,9:59:59.000 "Yes, I think I'll buy it,"[br]and, yes, they really did buy it. 9:59:59.000,9:59:59.000 And we found both more activity[br]in certain regions associated 9:59:59.000,9:59:59.000 with valuation and then activity [br]in different regions, 9:59:59.000,9:59:59.000 which were somewhat predictive[br]of when a yes was going to turn in 9:59:59.000,9:59:59.000 to, "Well, not really." 9:59:59.000,9:59:59.000 In some other studies [br]on hypothetical bias, 9:59:59.000,9:59:59.000 we used eye tracking, [br]which is a computerized way 9:59:59.000,9:59:59.000 of seeing what you're looking at[br]for how long. 9:59:59.000,9:59:59.000 It also measures pupil dilation. 9:59:59.000,9:59:59.000 When you're aroused [br]by something that you like, 9:59:59.000,9:59:59.000 or possibly you're scared,[br]the pupil dilates a little bit. 9:59:59.000,9:59:59.000 So we used that method[br]and then another method 9:59:59.000,9:59:59.000 using mouse movements. 9:59:59.000,9:59:59.000 And so we found [br]that the mouse tracking 9:59:59.000,9:59:59.000 and the eye tracking[br]actually could give us an idea 9:59:59.000,9:59:59.000 of when people would say, "Yes, [br]I'm going to buy this product," 9:59:59.000,9:59:59.000 but then they really didn't[br]when they had skin in the game 9:59:59.000,9:59:59.000 and had to buy it. 9:59:59.000,9:59:59.000 The quicker a person moves a mouse[br]to a box to click on something, 9:59:59.000,9:59:59.000 the more they like it. 9:59:59.000,9:59:59.000 It's like a fast trajectory,[br]"I really like this." 9:59:59.000,9:59:59.000 A slow meandering trajectory is, [br]"Well, I don't know. I'm not sure." 9:59:59.000,9:59:59.000 The motor activity in the mouse is[br]actually an index in economic value 9:59:59.000,9:59:59.000 as well as some other things,[br]like indecision. 9:59:59.000,9:59:59.000 We live in a kind of golden age[br]of social science 9:59:59.000,9:59:59.000 in which we can measure things[br]in lots and lots of different ways. 9:59:59.000,9:59:59.000 So one thing we've just begun 9:59:59.000,9:59:59.000 that I think it's going [br]to be really, really fun 9:59:59.000,9:59:59.000 is in order to study habit[br]and a bunch of other things. 9:59:59.000,9:59:59.000 We bought a smart vending machine[br]and a smart vending machine 9:59:59.000,9:59:59.000 is basically a vending machine [br]in the back 9:59:59.000,9:59:59.000 and a giant iPad in the front. 9:59:59.000,9:59:59.000 So you could program the iPad[br]to show whatever you want. 9:59:59.000,9:59:59.000 For example, if somebody buys[br]habitually and you raise the price 9:59:59.000,9:59:59.000 by a few percent,[br]do they just ignore that 9:59:59.000,9:59:59.000 because they're not [br]even looking at the price. 9:59:59.000,9:59:59.000 Eventually, we'd like also[br]to be able to use webcam cameras 9:59:59.000,9:59:59.000 to record so when I say[br]somebody is not looking at the price, 9:59:59.000,9:59:59.000 I really mean they [br]are not looking at the price 9:59:59.000,9:59:59.000 because the camera looked[br]at where their eyes were looking. 9:59:59.000,9:59:59.000 - [Narrator] Want to see [br]more economists in the wild? 9:59:59.000,9:59:59.000 Check out our playlist. 9:59:59.000,9:59:59.000 Are you a teacher? 9:59:59.000,9:59:59.000 Here's some related material [br]for your classroom. 9:59:59.000,9:59:59.000 ♪ [music] ♪