Real-time analysis of brain activity using functional magnetic resonance imaging (FMRI) shows how differently people react to various economic situations.
According to a study published in Neuron, brain response to rewards can predict one's strategy in economic decisions. If, for example, ventral striatum - a sub-cortical part of the cerebrum - shows increased activity, then that person tends to simplify decision making to either a winning or losing situation.
Such studies may someday allow researchers to help an impulsive depressed individual to make rational judgments. This will lead to more effective interventions or creating more appropriate educational materials.
The study revealed that the lateral prefrontal cortex of the brain, which is associated with "rational" processing, was most active in a simplifying strategy inconsistent with traditional rational-choice models.
It also suggests that it is the type of computation and not the rationality that activates a brain region.