Using fMRI Analysis to Unpack a Portion of Prospect Theory for Advertising/Marketing Understanding

One of the key elements being used today to support/reject/enhance marketing/advertising theory is Kahneman and Tversky’s prospect theory (1979). Interest has been growing on how that concept might support/explain how advertising “works” based on Kahneman’s later concepts as found in his text “Thinking Fast and Slow” (2011). All have spawned and supported the field of behavioral economics (Kahneman, American Economic Review, 93: 1449–1475, 2003). Literally thousands of discussions, speculations, hypotheses, and applications of these concepts can now be found in the advertising literature. Yet, in spite of its broad industry and practitioner acceptance, the basic fundamentals of prospect theory, as Kahneman and Tversky outlined them in their original paper, “Prospect Theory: An Analysis of Decision Under Risk” (1979), and their follow-on book, “Choices, Values and Frames” (2000) still rely mostly on support from small scale, academic, laboratory experiments based on questionnaires and researcher interpretations. We employ the new tools of fMRI in an age-related experiment. Loss Aversion has a long history in marketing and communication theory and the ability to connect or refute that concept to aging in marketing theory would seem a major aid to marketers going forward.