Money, Social Status Similar in Brain

Why do people do things that will gain them social approval? It turns out that the same parts of the brain are activated for a positive social outcome as for a monetary reward. In other words, the same reward circuitry is turned on both by social and monetary gains. Corporate marketers as well as non-profit fundraisers have always known that most individuals crave social approval, but these new findings show how our brains process these social rewards and how they relate to money.

Japanese researchers using functional magnetic resonance imaging (fMRI) on people being enticed with either monetary or reputational rewards for good deeds done found that both flip on the striatum, the brain’s reward system, in a similar fashion.

The study, published in the April 24 issue ofNeuron, is consistent with a long-held social psychological theory that people do nice things to others to gain a good reputation or social approval just like they work for salary. It may provide a pivotal step toward a neural explanation for people’s everyday social behaviors.

The researchers’ study on 19 people showed that acquiring a good reputation sent reward-related brain areas, notably the striatum, into overdrive. Many of these areas were also activated when monetary rewards were offered, suggesting that the striatum processes the two in a similar manner.

“Our findings indicate that the social reward of a good reputation in the eyes of others is processed in an anatomically and functionally similar manner to monetary rewards, and these results represent an essential step toward a complete neural understanding of human social behaviors,” the researchers wrote. [From The Washington Post – Money, Praise Similarly Activate Brain’s Reward Center.]

Scientific American published a more detailed look at the research in For the Brain, Cash Is Good, Status Is Better:

“Our study shows that both behaviorally and in the brain, people place an importance on social status,” says Caroline Zink, a postdoctoral fellow in neuroscience at the National Institute of Mental Health (NIMH) in Bethesda, Md., and co-author of one of studies. “It’s hugely influential even [when we’re not] in direct competition with someone else.”

Zink’s NIMH team and their counterparts at Japan’s National Institute for Physiological Sciences (NIPS) used different methods to determine that we process social values in the striatum, which had previously been tapped as our brain’s monetary reward center. This is key, researchers say, because it provides evidence that our brains consider a good rep?as well as cash?to be rewarding and worth considering as we mull our options. In addition, they note that our brains likely weigh the benefits of each against one another (because they are processed in the same place) as we make up our minds.

The last sentence in that quote should be interesting to Neuromarketing readers. It suggests that our brains are performing a balancing act when making a decision and that social benefits may be weighed directly against monetary costs. Could this explain why, for example, a surprising number of people were early adopters of the Toyota Prius, despite the fact that any annual fuel cost savings would be offset by the higher initial cost of the car? Presumably, for some people at least, driving an obviously “green” vehicle would be a reward in itself and would justify the higher price. To continue the Toyota theme, could this reward system also explain why people will pay many thousands more for a Lexus than the equivalent Toyota model, even though the difference in features and function don’t themselves justify the price differential? (Like the Prius buyers, the Lexus buyers see an elevation in social status; in their case, though, the motivator is prestige rather than environmental sensitivity.) Could it also explain why non-profit fundraising is always more successful when donors are recognized in a visible and public way? Whether it’s as simple as calling a donor a “Gold Patron” in an event program or as significant as naming a building after him, public recognition is important to the vast majority of donors.

From a management standpoint, this balancing act of social status vs. money validates the general belief that praise from a manager can be as important as an employee’s rate of pay. Employees may quit well-paying jobs if their contributions aren’t recognized by their boss or co-workers. Obviously, money is an important factor in an employment relationship, but this research shows the potent value of public praise.

Any marketer, whether for-profit or nonprofit, should keep in mind the importance of social status and the fact that it is part of the brain’s valuation process when making decisions. We knew that paying causes “pain,” and we now know that positive social gains are viewed as a reward by the brain. To the extent that marketers can tweak their offerings to maximize social gains, they can offset the pain of paying and perhaps even justify a higher price.