When trying to explain neuroeconomics to someone, what you’re really trying to do is explain how the brain works, with regards to some specific objective. So how about I first do that, and then dive into our shared, neurological addiction, to dopamine.
Introducing the Brain The workings of the brain can be explained rather simply: we use our senses. We receive a lot of sensory information. All of this information is handled by our Central Nervous System (CNS). Thankfully, we are not fully aware of all of this information, it would be total sensory overload. No, we filter out the information we want by directing (different levels of) our attention towards it.
Now, when we get a bit more detailed, we are looking at the level of neurons. The sensory information as described above, flows through these neurons. Neurons communicate with each other through the use of electrical activity. This electric activity is simply the information coded into an electric signal. This signal enters the neuron via its dendrites, and then flows through the neuron into its axons.
If the electric signal is intense enough, it creates the action potential. Meaning the initial neuron will release neurotransmitters into the synaptic cleft (space between neuron 1’s axons, and neuron 2’s dendrites). The second neuron then takes in the information from these neurotransmitters and releases the same electric signal into its own body. The process continues throughout millions (!!) of neurons, within milliseconds, so we can register what is happening in the world around us.
Now that is lesson 1 for today. And honestly, Elliot Ludvig can explain this much better. Let’s move on, shall we?
Introducing Dopamine The reason I have just outlined this whole process is because it lies at the heart of the neural structures in the brain. One of these neural structures or pathways if you will, is that of dopamine. And that is a really nice pathway to look into! Because without dopamine, we wouldn’t do anything. Because dopamine, dear friends, is known as the reward neurotransmitter. And why do something without a reward?
Dopamine is in our system so we can learn, and we learn by the outcome of an action. For example, imagine when you were younger, say the start of high school. You have studied hard, you have done a test, you get the test back with the grade of 100%. Perfect score! Your hard work has been rewarded, that is the initial dopamine release. You go home and tell your parent(s), they react well, they are very proud, second dopamine release. They decide that you deserve something nice and cook you your favourite meal to celebrate, third dopamine release. You have now made the link: high test scores = reward. What is important here is not the fact that you are receiving the rewards themselves (high grades, praise etc.), it is important that you feel good and derive pleasure from these rewards, which is where dopamine comes in.
This can also be related to the consumption of substances. I experience pleasure when eating strawberries, as such I continue to eat them. I have now deduced that I like strawberries. Or consumption on a broader scale: There is a bag I like. As soon as I buy it, I have a release in dopamine. I derive pleasure from having bought the bag.
The scenarios described above are exclusively centred on ourselves. The action is done by us, for us to learn and obtain rewards. But we can use observational learning as well. We can see someone else engage in an action and see them being rewarded. We make the link: other person’s action à reward. We expect a reward, as such we are likely to engage in this action as well. If it works out great, but what if we are expecting a dopamine rush, and nothing comes?
Expecting Dopamine The initial dopamine rush tends to be the greatest. The first time you try chocolate, the first time you kiss, the first degree, the first life achievement. There is a reason we love “firsts:” the dopamine rush is the most intense.
Now why is this? As I said before, dopamine stimulates learning through rewards. But this is a neural pathway, and the brain isn’t exactly stupid; it catches on. We repeat actions because we know they are pleasurable. But, as derived from our first experience, we have an inkling as to how pleasurable they are. We have formed expectations about the size of the reward. Now when we engage in the action again, the dopamine rush is compared to the rush we had before. Now, we feel like the dopamine rush is less intense. We feel like we experience slightly less pleasure. That is because the first experience (E1) could not be compared. As such it is E1 – 0. Whereas with the second experience, it is E2 – E1. The difference here is much smaller, as such the rush is less. The difference between E1 and E2 can fully be explained by the expectations we had. The more experiences we have, the more accurate our estimate of our pleasure will become, and the less “error” we will make in our predictions. As such, unfortunately, we will experience less and less pleasure and our dopamine rush will be less and less intense.
Ironically, this is often how habits form. We engage in an action over and over again, because it is pleasurable. We do derive pleasure (or utility if you will) from it, but to a lesser and lesser extent over time or repetition. Ask someone who has a clear habit (cup of coffee in the morning anyone?!), why they do it. Or how they started doing it. Whether they still actively enjoy it etc. I’m keen to hear the answers!
Addicted to Dopamine Habits are not the only things that can form under the influence of dopamine. Addictions can form as well. I mentioned three examples: deriving pleasure from strawberries, bags (shopping) and coffee. All of those can turn into addictions.
Food addiction and shopping addiction are real things. They are real addictions that can ruin lives. Over-consumption can easily lead to (morbid) obesity, whereas shopping addiction can lead to severe financial damage. Individuals seem unable to break loose from the dopamine release and the momentary pleasure derived, making their situation worse, and therefore needing to engage in their addiction more and more.
With coffee, which is a completely normalised addiction, there is initial dopamine release. However, as the habit forms, this release lessens and lessens. As such, it would make sense for the habit to break, but it doesn’t. This is mainly due to the fact that coffee is a substance that induces physical dependency, just like hard drugs would. So let’s dive into those:
Without delving too deeply into the physiological aspects of cocaine consumption, dopamine is at play here as well. The initial hit of cocaine does stimulate dopamine production (amongst other things). The second hit, due to our expectations and both our body and brain learning and adjusting is less intense, less pleasurable. As such, to reach the same “high” as before, you will need more and more to reach the level of dopamine production. This is very much a vicious cycle of learning. Be aware that this is a physical dependency sustained by both body and brain. Your learning curve can turn against you.
What else does Dopamine do?! Now don’t think dopamine is a bad guy. It is genuinely a good neurotransmitter to have, God forbid we wouldn’t have it! We would not experience pleasure, we would not learn, we wouldn’t be able to persevere when things got though (the relationship between dopamine and motivation is great). We would have issues with motor functioning as well. So yeah, I’m rather pleased with having dopamine around.
In the next article, we are going to continue analysing dopamine. We are going to look into how this lovely chemical can make us more motivated and do better through the use of gamification. If you are not that keen on games, don’t fret, the article after that one is about how dopamine alters our perceptions of time. Which is a nice and freaky one to think about!