Brain Control and Consumer Behavior
                                                                                
     
                                                         I teach a course on consumer irrationality and market failure at the Fuqua School of 
Business. I open up one of my lectures with a brief video demonstration of what psychologists call the McGurk effect. (See an example 
here.)  In the video, a man makes the sound ba ba ba. About half of my  students invariably identify the sound accurately. But the other half?  They swear on their mothers graves that he said fa fa fa.
  Why such strong disagreement? Because that latter half of my class  listened to the videos with their eyes wide open, and their eyes told  their ears what to hear. You see, the people who made the video spliced  in the sound of the man saying ba, ba, ba over a video of him saying  fa fa fa. Confronted with this inconsistent sensory evidence, these  students brains tried to come up with a coherent picture of the world.  As a result, they mistakenly believed the man was saying something he  wasnt saying.
  I show this video to my students as a way of illustrating an  important point about the way markets work  people who understand the  human brain are in a position to manipulate other people. As I show in  my book 
Free Market Madness,
  such manipulations can influence consumer behavior, causing people to  buy what they otherwise wouldnt buy, eat what they otherwise wouldnt  eat, and spend what they cannot afford to spend. Indeed, an increasing  number of companies are employing behavioral scientists to help them  sell consumer products.
This isnt necessarily a bad thing. If companies never sold their  products, we wouldnt have a functioning economy. But the influence of  behavioral scientists on the marketplace isnt always a good thing  either. It means that free markets  where informed consumers freely  decide what products to purchase  may not be as free as we think,  because we consumers are influenced in ways outside of our awareness. We  sometimes make purchases that go against our best interests, because  clever companies have figured out ways to nudge the wallets out of our  pockets.
  We enter the supermarket with a shopping list, and invariably  purchase additional items on impulse, often less healthy foodsin part  because the supermarket designers know what foods to place in which  locations to spur on such purchases.  We pay off the minimum balance  on our credit cards, unaware that this minimum balance will not come  close to helping us pay off our debts in a reasonable time framein  part, because the credit card companies have studies how we will respond  to phrases like minimum payment.
  There is a lot more I could write about this topic. But in the spirit  of brevity, I want to leave you with a simple word of caution:
  Your next purchase might not be decided upon as freely as you think