- (0:30) - How Storytelling helps us make decisions: Peter Guber Article
- (4:15) - How do our perceptions effect our decision making
- (7:15) - Insights from neuroscientist, Michael Gazzaniga
- (15:00) - Experiments done by neuroeconomist, Paul Zak
- (21:50) - Molly Crockett: "Beware neruo-bunk"
Welcome back to the Mind Over Money podcast. I’m Kevin Cook, your field guide and storyteller for the fascinating arena of behavioral economics.
I’m excited about today’s topics because we are going to talk about how our brains use stories to make decisions. In fact, after I tell you a few stories about brains and stories, you’ll start to wonder which came first – brains or stories!
Obviously a brain has to exist first for there to be a story to experience, remember, and retell. But you should begin to see how stories help form neural pathways, perception, and other cognitive function – and thus our decision-making.
I begin with the current world capital of storytelling, Hollywood. Film producer and founder of PolyGram, Peter Guber, known for blockbusters from Batman to Rain Man, wrote an article in the March 2011 edition of Psychology Today titled "The Inside Story."
His goal was to explain the deep human need for stories from two vantage points: first, from his deep experience helping people craft and tell theirs and second, from the brain scientists who have discovered their importance in our daily lives.
Guber achieves his goal masterfully. After relating how the Oscar winning film starring Jack Lemmon, Missing, almost didn’t get made, he introduces the work of some giants of neuroscience that you should know about...
Stories, it turns out, are not optional. They are essential. Our need for them reflects the very nature of perceptual experience, and storytelling is embedded in the brain itself.
While we all feel ourselves to be unified creatures, that is not the reality of our experience or our brains. There is no central command post in the brain, says neuroscientist Michael Gazzaniga, professor of psychology at the University of California at Santa Barbara. Rather, there are millions of highly specialized local processors—circuits for vision, for other sensory data, for motor control, for specific emotions, for cognitive representations, just to name a few modules—distributed throughout the brain carrying out the neural processes of experience.
What's more, Washington University neuroscientist Jeffrey Zacks told me, such modules monitor external experience not continuously but in a kind of punctuated way, a process he calls event sampling. "The mind/brain segments ongoing activity into meaningful events," he says. How is it, then, that they function as an integrated whole and we experience ourselves that way?
Because we tell ourselves stories, Gazzaniga says. There is in fact a processor in our left hemisphere that is driven to explain events to make sense out of the scattered facts. The explanations are all rationalizations based on the minuscule portion of mental actions that make it into our consciousness.
There is much more in his lengthy piece from both Gazzaniga and Zacks. But in three short sentences, he sums it all up...
“We literally create ourselves through narrative. Narrative is more than a literary device—it's a brain device. Small wonder that stories can be so powerful.”
In today’s edition of the Mind Over Money podcast, I also share the research and insights of neuroeconomist Paul Zak who runs the Center for Neuroeconomics Studies at Claremont Graduate University. There, he and his team investigate the neurophysiology of economic decisions drawing on research from economic theory, experimental economics, neuroscience, endocrinology, and psychology to develop a comprehensive understanding of human decisions. Zak is also the author of The Moral Molecule and Trust Factor.
What’s interesting about Zak is that he is not a doctor of the life sciences, but he has become a trail-blazing researcher of brain biology because of his intense interests in the economics and the morality of human decision making.
Early in his career, Zak wanted to know what made us moral, or not. He learned about the biological effects of the hormone oxytocin, produced in both women and men, and he decided to focus on the aspect of human relationships centered around trust.
If you watch his 2011 TED Talk, you can get the full story, but in my podcast I actually read a few paragraphs of the transcript to give you his first-hand account (or would that be a second-hand story?).
As excited as I was by his story, I was nearly equally demoralized to hear part of it “debunked” by other experts in neuroscience. But the bottom line remains, our brains are a “bag of hormones” that compel our behavior as much as we “think” our mind is driving the bus.
Get the whole story in this week’s podcast!
Kevin Cook is a Senior Stock Strategist (and amateur brain explorer) for Zacks Investment Research where he runs the TAZR Trader stock-picking service (and dissects investor decision-making).
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