It is well established that neural imaging technology can predict preferences for consumer products. However, the applicability of this method to consumer marketing research remains uncertain, partly because of the expense required. In this article, the authors demonstrate that neural measurements made with a relatively low-cost and widely available measurement method—electroencephalography (EEG)—can predict future choices of consumer products. In the experiment, participants viewed individual consumer products in isolation, without making any actual choices, while their neural activity was measured with EEG. At the end of the experiment, participants were offered choices between pairs of the same products. The authors find that neural activity measured from a midfrontal electrode displays an increase in the N200 component and a weaker theta band power that correlates with a more preferred product. Using recent techniques for relating neural measurements to choice prediction, they demonstrate that these measures predict subsequent choices. Moreover, the accuracy of prediction depends on both the ordinal and cardinal distance of the EEG data; the larger the difference in EEG activity between two products, the better the predictive accuracy.
The construct of risk taking is studied through the prism of the relation between tonic arousal and risk taking behavior. Several theories have proposed that high aroused individuals tend to exhibit risk aversion. We posit that this arousal–behavior association is activated much more strongly in risks with losses, as losses increase arousal and trigger relevant traits associated with the sensitivity to risk. In three studies we examined risk taking in experience-based decision tasks, with either token losses or relative-losses (in the gain domain). In Study 1 we found a negative correlation between pre-task pupil diameter and risk taking in the loss domain but not in the gain domain. In Study 2 we re-analyzed a previous pupillometry dataset involving symmetric mixed gains and losses. We found that the negative correlation in this mixed condition emerged even while the participants did not show loss aversion. This finding was replicated in Study 3. Thus, the effect of losses on arousal provides sufficient conditions for the moderation of the tonic arousal–behavior association. The findings suggest an important role for losses in the psychological and physiological experience of risk.
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