That Neuroscience Guy - Neuroscience Bites - Why we like rare things

Episode Date: April 28, 2022

Diamonds are highly valuable because they're thought to be very rare. But why do we humans love rare things? In today's Neuroscience Bite, we discuss the neuroscience of rarity. 

Hi, my name's Olive Kregolson, and I'm a neuroscientist at the University of Victoria. And in my spare time, I'm that neuroscience guy. Welcome to another Neuroscience Byte. Have you ever wondered why we think diamonds are valuable? You know, the reality is that diamonds aren't that uncommon. They're actually quite common. But what happens is the diamond companies, the companies that mine diamonds and sell diamonds, well, they control the market. They only release a small amount out. And the reason they do this is there's a perception of rareness. And the fact that diamonds are rare makes them valuable. Now, why is that within our brain? What's the neuroscience behind this?

Well, if you think back to our decision-making episodes, we've talked a bit about system one decision-making. These are these gut hunches that you use to guide your way through life and system two decision-making, which is this logical analytical system. Well, if you recall, we spend most of our time in system one, just sort of going on cruise control throughout life. And to help do this, we rely on heuristics. Heuristics are rules of thumb, if you will, things that we can rely on to guide us. And one of the heuristics that we use is called the scarcity heuristic. Now the scarcity heuristic is simply a heuristic that posits that anything that's rare is valuable. So within our brains, we believe that diamonds are valued simply because they're rare. That's our perception,

and the heuristic tells us they're valuable. Originally, this came from a really kind of dated example, but the original example was a bag of marbles. Now, a bag of marbles costs, say, a couple of dollars, so each individual marble has a value, which is basically the number of marbles divided by the cost. But every once in a while when you open a bag of marbles, there's like a pure white marble, which is quite rare. So we perceive that white marble to be valuable simply because it's rare, even though its actual value is just its financial value. So its actual value is the total cost of the bag of marbles divided by the number of marbles

in the bag. This occurs throughout our lives. For example, if you've ever played McDonald's Monopoly, certain tiles are incredibly hard to get. So we perceive them to be valuable simply because they're rare. And that's how our brains operate. In fact, my own lab has data on this. We ran an experiment where we had people play a gambling game. And in some conditions conditions they were sort of presented with a gamble that they thought was really rare. It was very unusual that they would get this gamble. And then in other conditions we presented them with a gamble that was quite common. They saw this gamble all the time. Well funnily enough even though the chances of winning was the

same in both gambles, when people were gambling on a gamble that they perceived to be rare, their neural response was larger than for frequent gambles, even though they were winning the same amount of money. So at a deep level, our brains are hardwired to be sensitive to the scarcity heuristic. We have literally learned throughout our lives that rare things are valuable, even if that's not a true statement so that's a little bit about why we perceive rare things to be valuable so next time you're you know sort of evaluating what something's worth make sure you just take a self-check to say well is it actually valuable or is it just because it's rare remember our website's up that

neuroscienceguy.com you can follow me on Twitter, at thatneuroscienceguy. And we'll have another podcast for you on Sunday. My name's Olive Kregolson, and I'm that neuroscience guy. Thank you so much for listening.