Thursday, February 2, 2012

Would You Prefer a $5 Bottle of Wine or a $90 Bottle?

Antonio Rangel, an associate professor of economics at Caltech did a study in which the participants tried five red wines and rated them.  They showed a price for each of the wines ranging from $5 - $90.  As would be expected the participants rated the wines basically according to price. The higher priced wines were rated higher than the cheaper wines. The researchers had connected brain scan equipment that showed the activity in the pleasure centres of the brain were highly active when they tried the higher priced wines. The participants experienced more pleasure cognitively when they tried the expensive wines.

Here was the catch.  The $90 bottle of wine and the $10 bottle of wine were the same wine and yet the ratings showed the $90 bottle to be highly preferred and the $10 wine to be less preferred. The pleasure centres of the brain were significantly more active when tasting the $90 bottle versus the same wine labelled at $10. "The area of their brain that is thought to encode for the pleasantness of the experience was more active when they drank wine they believed had higher prices."

Now it makes sense that we consciously prefer the $90 bottle given our  past experiences that tell us that  a $90 bottle of wine will be better than a $10 bottle.  Add in that generally people want to be viewed as knowing a good thing when it is presented to them, and that higher price generally dictates a better wine. But how do we explain an actual physical reaction in the brain to a $90 bottle and a completely different physical reaction in the brain to that same wine with a $10 price tag.

The researchers concluded that "the brain encodes pleasure because it is useful for learning which activities to repeat and which ones to avoid, and good decision making requires good measures of the quality of an experience. But the brain is also a noisy environment, and thus, as a way of improving its measurements, it makes sense to add up other sources of information about the experience. In particular, if you are very sure cognitively that an experience is good (perhaps because of previous experiences), it makes sense to incorporate that into your current measurements of pleasure. Most people believe, quite correctly, that price and the quality of a wine are correlated, so it is therefore natural for the brain to factor price into an evaluation of a wine's taste."

It exposes how vulnerable we are to marketing and persuasion. Our brains, seeking to be efficient in evaluating our world, learn short cuts and in actuality that very efficiency encourages conformity as we seek to hurry through our environment and evaluate the endless choices offered. It also highlights that our expectations can create our experiences.  Our expectations can create a physical experience in our brain! This one has immense potential if we use it.

Just a note that when the same researchers had the participants evaluate the wines without price tags the highest pleasure centre activity came from the $5 bottle. Hmmmm....

I like studies like this as they make me become more conscious in how I choose.  I find it insanely fascinating when we get to watch our brains in action.  Years of learning layered in and influencing choices that we are unaware that we are even making. Seeing into our subconscious mind is enlightening.  It makes me want to see more and it changes the way I view my life.

Thanks to researchers at Caltech for sharing your experiences.

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