THE UNIVERSITY OF CHICAGO
LIST AND HORTACSU: TRADING EXPERIENCE CHANGES HOW BRAIN PROCESSES SELLING DECISIONS (2016)
PUBLISHED ON OCTOBER 3, 2016
Recently published research by John List, Ali Hortaçsu, et al. suggests that trading changes how the human brain evaluates the sale of goods, decreasing economic bias known as the "endowment effect," with experienced traders having reduced activity in brain regions associated with pain and negative emotions. “We were excited to see that our brief intervention can reduce the endowment effect, both in terms of the behavioral response and the brain mechanisms involved," said Hortacsu, in a UChicago News feature. Using magnetic resonance imaging (MRI) to create images of the brain, the researchers found that "specific economic experiences can modify how the brain responds, changing the process people use to make future decisions."