The Econophysics Blog

This blog is dedicated to exploring the application of quantiative tools from mathematics, physics, and other natural sciences to issues in finance, economics, and the social sciences. The focus of this blog will be on tools, methodology, and logic. This blog will also occasionally delve into philosophical issues surrounding quantitative finance and quantitative social science.

Sunday, January 21, 2007

Neuroeconomics of Spendthrifts vs Tightwads

John Tierney's column in the New York Times (January 16, 2007) discusses neuroscience / neuroeconomic research into the difference between the minds of spendthrifts versus the minds of tightwads. According to research done at Carnegie Mellon, the difference can be explained by the relative differences of how different people experience the pain of spending (or not spending): More pain from spending, more likely you are to be a tightwad; less pain, more likely you are to be a spendthrift. A lot of this type of research is carried out by using functional M.R.I. machines scanning subjects' brains as they make economic decisions in a laboratory setting.

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