Yes, you secretly like giving your money to the government. University of Oregon scientists have found that doing things like donating money to charity or even paying your taxes can give you the same sort of satisfaction you derive from feeding your own hunger pangs.

A cognitive psychologist and two economists gave 19 female participants $100 and then scanned their brains with functional magnetic resonance imaging (fMRI) as they watched their money go to the food bank through mandatory taxation, and as they made choices about whether to give more money voluntarily or keep it for themselves.

The participants lay on their backs in the fMRI scanner for an hour-long session and viewed the financial transfers on a computer screen. The scanner used a super-cooled magnet, carefully tuned radio waves and powerful computers to calculate what parts of the brain were active as subjects saw their money go to the food bank and made yes or no decisions on additional giving.

Researchers found that two evolutionarily ancient regions deep in the brain – the caudate nucleus and the nucleus accumbens – fired when subjects saw the charity get the money. The activation was even larger when people gave the money voluntarily, instead of just paying it as taxes. These brain regions are the same ones that fire when basic needs such as food and pleasures (sweets or social contact) are satisfied.

“The surprising element for us was that in a situation in which your money is simply given to others – where you do not have a free choice – you still get reward-center activity,” said Ulrich Mayr, a professor of psychology. “I don’t think that most economists would have suspected that. It reinforces the idea that there is true altruism – where it’s all about how well the common good is doing. I’ve heard people claim that they don’t mind paying taxes, if it’s for a good cause – and here we showed that you can actually see this going on inside the brain, and even measure it.

The study gives economists a novel look inside the brain during taxation, said co-author William T. Harbaugh, a UO professor of economics and member of the National Bureau of Economic Research in Cambridge, Mass. “To economists, the surprising thing about this paper is that we actually see people getting rewards as they give up money,” he said. “Neural firing in this fundamental, primitive part of the brain is larger when your money goes to a non-profit charity to help other people.”

“On top of that,” Harbaugh added, “people experience more brain activation when they give voluntarily – even though everything here is anonymous. That’s a very surprising result – and, to me, an optimistic one.”

However, this latter finding, which offers confirmation to the economic theory of “warm-glow” giving, doesn’t necessarily mean that taxes should be lowered and charity relied on more heavily, Harbaugh said. In a voluntary environment, he added, lots of people free-ride and donations fall.

The study, Mayr said, reflects the balancing act that every society must face. “What this shows to someone who designs tax policy is that taxes aren’t all bad,” he said. “Paying taxes can make citizens happy. People are, to varying degrees, pure altruists. On top of that they like that warm glow they get from charitable giving. Until now we couldn’t trace that in the brain.”

Neural activation from mandatory taxation, the researchers said, helps predict who will give. “We could call the people whose brains light up more when money goes to charity than to themselves altruists,” Mayr said. “The others are egoists. Based on what we saw in the experiments, we can use this classification to predict how much people are willing to give when the choice is theirs.”

There remain a lot of unanswered questions, Harbaugh said. “We show that people liked paying a tax that went to a food bank. But suppose the tax had been unfair. What then? Or suppose that people voted to make other people pay the tax, too? That would help other people even more, so would the voter get a bigger neural reward?”

Harbaugh, Mayr and co-author Dan Burghart, an economics graduate student, say they are not worried about the possibility that governments could use their method to monitor tax evasion, or charities could use it to figure out whom to ask for money. “To do this, we needed a $3 million scanner, some liquid helium and a few weeks of computer time,” Harbaugh said.

“If a participant moved her head,” Burghart added, “we had to start all over. It will be a while before this is built into cell phones.”

Source: University of Oregon

People deal with percentages every day: the performance of a stock portfolio, a sale at the department store, or the performance of a new hybrid car, are all often expressed as percent changes. As an everyday occurrence, calculating percentages should be second nature to the average person. “Not so,” says Akshay Rao, professor of marketing at the University of Minnesota Carlson School of Management.

In the paper “When Two and Two is Not Equal to Four: Errors in Processing Multiple Percentage Changes,” Rao and Haipeng Chen, a Carlson School doctoral alum and assistant professor at the University of Miami, show that consumers treat percentages like whole numbers, and this results in systematic errors in calculation. People simply aren’t coming up with four when they add two plus two. The paper will appear in a forthcoming issue of the Journal of Consumer Research.

Fictive learning affects the brain and plays an important role in the choices individuals make – and may play a role in addiction, said Baylor College of Medicine researchers and others in a report that appears online today in the Proceedings of the National Academy of Sciences.

These “fictive learning” experiences, governed by what might have happened under different circumstances, “often dominate the evaluation of the choices we make now and will make in the future,” said Dr. P. Read Montague, Jr., professor of neuroscience at BCM and director of the BCM Human Neuroimaging Laboratory and the newly formed Computational Psychiatry Unit. “These fictive signals are essential in a person’s ability to assess the quality of his or her actions above and beyond simple experiences that have occurred in the immediately proximal time.”

Recently, I placed an item on [craigslist.com->http://www.craigslist.com] in an attempt to sell it. A beautiful set of Russian nesting dolls that I know are worth far more than the $35 I listed as the asking price. Recalling, albeit vaguely, the Russian word for these dolls, I searched Google for ‘marushka’ and sure enough several pages of results appeared listing marushka Russian nesting dolls.

Today I received an email from someone who was kind enough to inform me that the dolls are in fact ‘matreshka’ dolls. While emailing my thanks I realized that this situation serves to illustrate how Web2.U is distinct from Web2.0. If you’re as yet unfamiliar with the basic concepts of Web2.U, I direct your attention to the following: [From Web2.0 to Web2.U->web20-web2u], [Why Web2.0 Must Go->web20-must-go], [Web2.U - A Standard->web2u-standard], and [Cooperative Computing->cooperative-computing].

Keywords Preference Engines - There’s been a great deal of emphasis and progress in the development of preference engines. Sites such as netflix, rhapsody and amazon use preference engines to make product suggestions to consumers. Google uses a preference engine to suggest keywords which one might have misspelled. Isn’t this Web2.U? Isn’t this pointing the User towards information that the User might find meaningful or useful? Not necessarily.

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