Study shows why it is so scary to lose money

WASHINGTON Mon Feb 8, 2010 4:38pm EST

A woman plays a slot machine at the Island View Casino in Gulfport, Mississippi November 9, 2009. REUTERS/Carlos Barria

A woman plays a slot machine at the Island View Casino in Gulfport, Mississippi November 9, 2009.

Credit: Reuters/Carlos Barria


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WASHINGTON (Reuters) - People are afraid to lose money and an unusual study released on Monday explains why -- the brain's fear center controls the response to a gamble.

The study of two women with brain lesions that made them unafraid to lose on a gamble showed the amygdala, the brain's fear center, activates at the very thought of losing money.

The finding, reported in the Proceedings of the National Academy of Sciences, offers insight into economic behavior and suggests that humans evolved to be cautious about the prospects of losing food or other valued possessions.

Benedetto De Martinoa of the California Institute of Technology in Pasadena and University College of London and colleagues were studying why people will turn down gambles that are likely to lead to gain.

"Laboratory and field evidence suggests that people often avoid risks with losses even when they might earn a substantially larger gain, a behavioral preference termed 'loss aversion'," they wrote.

"For instance, people will avoid gambles in which they are equally likely to either lose $10 or win $15, even though the expected value of the gamble is positive ($2.50)."

They studied two women with a rare genetic condition called Urbach-Wiethe disease, which damages the amygdala, the almond-shaped center in the brain that controls fear and certain other acute emotions.

The researchers compared the women's responses to 12 people with undamaged brains. They noted this kind of study usually involves only a few people as it is not possible or ethical to deliberately damage a person's brain to see what happens.

The volunteers were asked to make gambles in which there was an equal probability they would win $20 or lose $5 (a risk most people will take) -- or would win or lose $20 (one most people will reject).

The two patients with damaged amygdalas fearlessly risked a $50 pot.

"We think this shows that the amygdala is critical for triggering a sense of caution toward making gambles in which you might lose," Colin Camerera of University College London, who worked in the study, said in a statement.

"A fully functioning amygdala appears to make us more cautious," added his colleague Ralph Adolphs. "We already know that the amygdala is involved in processing fear, and it also appears to make us 'afraid' to risk losing money."

The study could also help researchers understand why some people are more willing to take risks than others. Perhaps genetic differences in the DNA activated in the amygdala explain it, the researchers said.

(Edited by John O'Callaghan)

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Comments (15)
dratman wrote:
I love the quotation marks around Mr. Adolphs’ use of the word “afraid.” Compare that punctuation with Wittgenstein’s eerily objective discussions of what we might describe as “psychological states.” After a researcher studies human emotional reactions while simultaneously monitoring what’s happening in the brain, I’m not surprised to see that a sequence of events such as human fear arousal in a relatively innocuous situation could begin to feel somewhat abstract and stereotyped.

Feb 08, 2010 5:11pm EST  --  Report as abuse
Red46 wrote:
Someone financed this “study”? People don’t like to take chances because they might lose their security. Hmmm. Brilliant. Man, I’d love to make a living like this. I want to study why people eat ice cream. Do you think it is because it tastes good?

Feb 09, 2010 1:39am EST  --  Report as abuse
hyuipo wrote:
So your saying that people are scared to lose thier money at gambling but are more than willing to just give up thier money to some random “study” that would probably cost millions? ok sure…

Feb 09, 2010 8:05am EST  --  Report as abuse
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