Modulating the Activity of MPFC With tDCS Alters Endowment Effect

Area of Science:

• Neuroscience
• Behavioral Economics
• Cognitive Psychology

Background:

• The endowment effect, where individuals overvalue owned items, is well-documented.
• Neuroimaging studies implicate the medial prefrontal cortex (MPFC) in this effect.
• A causal link between MPFC activity and the endowment effect requires further investigation.

Purpose of the Study:

• To establish a direct causal relationship between medial prefrontal cortex (MPFC) activity and the endowment effect.
• To investigate how modulating MPFC activity influences valuation and purchasing decisions.

Main Methods:

• Utilized transcranial direct current stimulation (tDCS) to modulate neural activity in the MPFC.
• Assessed the endowment effect by measuring willingness to accept (WTA) and willingness to pay (WTP) for mugs and notebooks across anodal, cathodal, and sham tDCS conditions.

Main Results:

• The endowment effect was present with anodal and sham tDCS for mugs, but absent with cathodal tDCS.
• The endowment effect was observed with anodal tDCS for notebooks, but absent with sham and cathodal tDCS.
• Anodal tDCS over MPFC led to higher selling prices and lower buying prices, while cathodal tDCS led to higher buying prices.

Conclusions:

• Demonstrated a direct causal link between MPFC activity and the endowment effect.
• MPFC stimulation influences valuation, affecting both selling and buying behaviors.
• Findings provide critical insights into the neural mechanisms underlying economic decision-making and ownership bias.