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Economists Study the Brain

Magnus Johannesson

Magnus Johannesson

What happens in the brain when you make a decision about money? This is the kind of question studied in neuroeconomics, a new area of research that has just been established at Linköping University.

Magnus Johanesson, a professor in health economics, is on the front lines of the field. His device is the magnetic camera, which reveals which convolutions of the brain are activated when a person considers an economic situation.

In October, he starts a five-year position as a visiting professor at LiU and the Department of Management and Engineering. At the same time, he is retaining his full-time professorship at the Stockholm School of Economics.

“Linköping University has the infrastructure, and the technical and medical qualifications around the magnetic camera, and they’ve been looking around for a new area to apply it. They contacted me and it was a good fit, since I was interested in developing the research,” Johannesson said.

Johannesson has not set foot in unfamiliar territory. He completed both his undergraduate and postgraduate studies at LiU and defended his thesis on the subject of health in 1991.

The research aims at increasing knowledge of the biological background of how we act in various decision-making situations. One study Johannesson did in collaboration with the Karolinska Institutet builds on game theory problems. Two people have a sum of money, 100 crowns for example, to share. One of them takes charge of the money and issues an ultimatum: “I’ll take 80 and you get 20.” If the other one agrees, he gets 20 crowns; if not, he gets nothing.

“Most people react to the unfair proposal by saying no, even though they don’t get any money at all. We’ve been looking at what happens in the brains of people who decide in such a situation.”

It appears to be the amygdala, a nucleus that handles feelings, that is activated. Test subjects who received a medicine that represses the emotional response accepted the unfair proposal more frequently.

“My genetic studies lie close to this. Reacting to injustices is strongly hereditary.”

Until now, Johannesson has recruited students as test subjects. Further on, he imagines designing experiments with selected populations, for example people who are used to making a certain type of decision, and comparing them with a control group. He would also like to study persons with autism, which has been associated with defects in the amygdala.

Per-Olof Brehmer, head of the Department of Management and Engineering, is looking forward to having Johannesson as a visiting professor. This new field of research means collaboration across three departments – philosophy, technical and natural science, and medical.

“This is a new, growing field and Magnus Johannesson is an absolute world-class researcher,” Brehmer said.

Johannesson will start at LiU on October 1 and will be working as a part-time visiting professor for five years. Two Ph.D. candidates are already on site: Camilla Josephson and Gustav Tinghög. A post-doctoral student in neuroscience will be employed as well. In addition, there will be doctoral students and collaboration with researchers at the Center for Medial Image Science and Visualization.

Therese Winder 2010-10-04

Page manager: therese.winder@liu.se
Last updated: 2010-10-04