Consumers Aren't Rational

In The Voices in My Head Say ‘Buy It!’ Why Argue?, New York Times reporter John Tierney argues that recent fMRI studies show that consumers make purchasing decisions based on anticipated feelings of reward (or of upset), rather than on a more rational cost-benefit analysis.

First, these findings don't alone show that (at least, not in the way described in the above article). That there is an emotional component associated with the perception of "I should buy this" (or, "this is a terrible purchase!") is not surprising. But does that emotional reaction correlate with a rational one, or is it itself irrational?

In other words, is emotion merely the means by which the more rational decision is perceived, or, as the article suggests, is the emotional reaction itself fundamentally irrational? Presumably, in most cases, there is at least some correlation between the emotional perception of a purchase and the rational reality. When these two diverge is undoubtedly when we see compulsive buying habits.

Of course, there are a host of other experiments and anecdotes that show how easily consumers can be fooled. Advertisers thrive on the practice, of course, and many of us are no doubt familiar with Barry Schwartz's now-famous jam-stand experiment (in which an overload of jam-buying choices caused customers to shy away from making a purchase). But Tierney's article raises a more interesting question: is Tierney's "lazy insula" an indication of an emotional malfunction, or a logical one?

[I actually just linked to the article because I thought it was funny. The above text is just a rationalization. --ed]

The Voices in My Head Say ‘Buy It!’ Why Argue?
by John Tierney
January 16, 2007
The New York Times