Weber, Bernd and Rangel, Antonio and Wibral, Matthias and Falk, Armin (2009) The medial prefrontal cortex exhibits money illusion. Proceedings of the National Academy of Sciences of the United States of America, 106 (13). pp. 5025-5028. ISSN 0027-8424 http://resolver.caltech.edu/CaltechAUTHORS:20090827-142548166
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Behavioral economists have proposed that money illusion, which is a deviation from rationality in which individuals engage in nominal evaluation, can explain a wide range of important economic and social phenomena. This proposition stands in sharp contrast to the standard economic assumption of rationality that requires individuals to judge the value of money only on the basis of the bundle of goods that it can buy—its real value—and not on the basis of the actual amount of currency—its nominal value. We used fMRI to investigate whether the brain's reward circuitry exhibits money illusion. Subjects received prizes in 2 different experimental conditions that were identical in real economic terms, but differed in nominal terms. Thus, in the absence of money illusion there should be no differences in activation in reward-related brain areas. In contrast, we found that areas of the ventromedial prefrontal cortex (vmPFC), which have been previously associated with the processing of anticipatory and experienced rewards, and the valuation of goods, exhibited money illusion. We also found that the amount of money illusion exhibited by the vmPFC was correlated with the amount of money illusion exhibited in the evaluation of economic transactions.
|Additional Information:||Copyright ©2009 by the National Academy of Sciences. Communicated by George A. Akerlof, University of California, Berkeley, CA, February 12, 2009 (received for review December 3, 2008). Published online before print March 23, 2009, doi: 10.1073/pnas.0901490106 We gratefully acknowledge financial support from the Deutsche Forschungsgesellschaft through SFB/TR 15 and from the European Research Council Starting Grant. Author contributions: B.W., A.R., M.W., and A.F. designed research; B.W. and M.W. performed research; B.W., A.R., M.W., and A.F. analyzed data; and B.W., A.R., M.W., and A.F. wrote the paper. The authors declare no conflict of interest. This article contains supporting information online at www.pnas.org/cgi/content/full/0901490106/DCSupplemental.|
|Subject Keywords:||neuroeconomics; ventromedial prefrontal cortex|
|Usage Policy:||No commercial reproduction, distribution, display or performance rights in this work are provided.|
|Deposited By:||George Porter|
|Deposited On:||08 Sep 2009 19:10|
|Last Modified:||26 Dec 2012 11:16|
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