The Psychology of Everyday Life: Motivation and the Search For Happiness

The Biology of Money

What parts of the brain are involved with financial decisions?

There are several areas of the brain that have been implicated in the mental processes involved with financial decisions. These divide fairly neatly into areas associated with cognitive or emotional processes. The prefrontal cortex is involved with careful analysis, quantitative reasoning, and consideration of future consequences; it is the seat of planning for the future. Several smaller areas deep within the middle of the brain mediate the emotional aspects of our financial life. The nucleus accumbens, a central point in the dopaminergic reward circuitry, is involved with desire and motivation to pursue reward. The amygdala is particularly sensitive to fearful stimuli. The insula, which is actually part of the cortex but is sandwiched inside the frontal, parietal and temporal lobes, is responsive to feelings of pain and disgust. The insula is activated when we lose money.


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