Tag Archives: neuroscience

Penny/Dollar Auction Psychology (The Workings of Swoopo)

I first heard of the bidding fee scheme/online auction site Swoopo in a Coding Horror post that takes a look at the company’s business plan, calling it “pure, distilled evil”. It’s also a pretty simple (or, as the post said, “brilliantly evil”) plan:

It’s almost an exploit of human nature itself. Once you’ve bid on something a few times, you now have a vested financial interest in that product, a product someone else could end up winning, rendering your investment moot. This often leads to irrational decisionmaking — something called the endowment effect, which has even been observed in chimpanzees. So instead of doing the rational thing and walking away from a bad investment, you pour more money in, sending good money after bad.

A few month later Mark Gimein produced a widely-shared (and frankly inferior) rehash of Atwood’s article, calling Swoopo “the crack cocaine of auction sites”.

However my interest piqued again as Jonah Lehrer picked up on the neuroscience of bidding fee schemes, noting that the success of Swoopo isn’t just down to our irrationality toward apparent sunk costs and divestiture aversion, but also how our dopamine circuitry works.

What’s interesting about this system is that it’s all about expectation. Our dopamine neurons constantly generate patterns based upon experience: if this, then that. They realize that the tone predicts the juice, or that betting on the laptop might get us a discounted reward. This means that our dopamine circuitry isn’t just titillated when we win the auction – those predictive cells are excited every time we bid, as they wait to see whether or not the reward will arrive. […]

This, in a nutshell, is how Swoopo works. It’s one near-miss after another, as we bid and then bid again. The experience feels awful – we know we’re wasting money – and yet we can’t look away.

As noted in a Mind Hacks post looking at dopamine functions during gambling tasks; “although near-misses were experienced as aversive they increased the desire to play the game”.

Now behavioural economist Richard Thaler has produced a piece on dollar auctions and Swoopo that again reads like a poor rehash of Atwood’s article.

Seeing with Tongues

A new breakthrough device, recently covered in Scientific American, restores partial eyesight to the blind by using sensors in the tongue to send sign signals to the brain.  The research comes from neuroscientist Paul Bach-y-Rita.

Experiments have shown that:

within 15 minutes of using the device, blind people can begin interpreting spatial information via the BrainPort, says William Seiple, research director at the nonprofit vision healthcare and research organization Lighthouse International. The electrodes spatially correlate with the pixels so that if the camera detects light fixtures in the middle of a dark hallway, electrical stimulations will occur along the center of the tongue.

The thesis behind the the device, known as the Brainport, is that we see with our brains, not our eyes.  It comes down to how we learn, not what we learn.

“It becomes a task of learning, no different than learning to ride a bike,” Arnoldussen says, adding that the “process is similar to how a baby learns to see. Things may be strange at first, but over time they become familiar.”

This is a guest post from Alex J. Mann.  You can subscribe to his blog here and follow him on Twitter here.

The Neuroscience of Driving

Elderly drivers are the most dangerous on the road, we are often led to believe thanks to the news highlighting accidents involving the aged.

This is not necessarily the case, research is showing, but it’s partly true due to the decline of many cognitive functions. In a comprehensive article looking at the neuroscience of driving, Drake Bennett looks at what safeguards can be put in place to prevent unsuitable drivers from taking to the road and why elderly drivers aren’t inherently bad.

“[Studying driving] turns out to be an excellent way to look at the limits of our attentional abilities, especially as we get older and we start to show significant declines,” says David Strayer, a psychology professor at the University of Utah. “It’s one of the most direct ways to be able to look at how attention works, how multi-tasking works.” […]

There is such a thing as too much caution, of course: driving too slowly on a highway can be as dangerous as driving too fast. But according to the researchers who study them, the wisdom of the elderly driver consists in treating driving as something dangerous – which, no matter how sharp our skills, it is.

via Mind Hacks

Information Gaps and Knowledge Rewards

Starting with two great examples of marketing through curiosity (the Hot Wheels mystery car and California Pizza Kitchen’s Don’t Open It thank you card), Stephen Anderson looks at how you can use ‘information gaps’ to drive curiosity and then interaction with your customers.

Information can be presented in a manner that is straightforward or curious. If we opt for the latter, we are guaranteed not only attention, but likely higher engagement as well—curiosity demands we know more! What was known information (a simple coupon or another toy car option) that might have been ignored has been converted into something unknown, something mysterious, something that demands resolution.

The article goes on to discuss George Loewenstein and his information-gap theory before offering some advice on inciting curiosity in your product:

If you want to make someone curious, make them aware of something they don’t know. Find that information you can use to tease people. Chances are, you’re either withholding all the specific information or giving it all away. To get attention and engage the senses, look for ways to turn these direct messages into a quest to be completed.

It’s no surprise that curiosity can be a powerful tool, as some recent research is suggesting that information is as much a reward as thirst, neurologically speaking.

Dopamine neurons are thought to be involved in learning about rewards – by adjusting the connections between other neurons, they “teach” the brain to seek basic rewards like food and water. Bromberg-Martin and Hikosaka think that these neurons also teach the brain to seek out information so that their activity becomes a sort of “common currency” that governs both basic needs and a quest for knowledge.

via @bfchirpy

Cognitive Benefits of Exercise

Walter van den Broek (AKA Dr Shock) provides a summary of the research on the neuroscience of exercise, or: the cognitive benefits of an active lifestyle. Exercise…

  • improves learning and intelligence scores.
  • increases the resilience of the brain in later life resulting in a cognitive reserve.
  • [attenuates] the decline of memory, cortex and hippocampus atrophy in aging humans.
  • improves memory and cognition.
  • protects against brain damage caused by stroke.
  • promotes recovery after brain injury.
  • can be an antidepressant.

Reporting on a study conducted at the Neuroplasticity and Behavioral Unit, National Institute on Aging (part of the National Institutes of Health), van den Broek also looks at foods that have been shown to be beneficial for learning (among other brain functions), in addition to providing a bit of neuroscience on how exercise actually “improves the brain”.