KEY CONCEPT

Decision-making is often strongly influenced by social factors, and research in the nascent field of neuroeconomics (which crosses the disciplines of psychology, marketing, economics and neuroscience) is helping to explain why. ‘In-group conformity’ is mediated by signals in the brain associated with emotion and reward and can be stimulated by the so-called ‘love hormone’, oxytocin. Neurobiological insights like these raise important questions for strategy design — in both the private and public sectors. 

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IDEA SUMMARY

In making decisions, people are susceptible to the influence of those in their ‘in-group’, who commonly include others of the same age, sex, ethnicity or religion, as well as friends, family members, colleagues and classmates. This is a long-observed and commonly acknowledged phenomenon, often explained in terms of evolutionary biology. (By conforming to the common behaviours and shared opinions of their own group or community, members benefit from the wisdom of the group as a whole and thus increase the chances of individual and group survival.) However, relatively little is known about the neurobiological mechanisms that underlie in-group conformity.

Researchers at Rotterdam School of Management investigated the phenomenon by both functional magnetic resonance imaging (fMRI) and a pharmacological study.

In the fMRI experiment, scanning was used to measure neural activity during a perceptual decision-making task. Participants were exposed to the judgments of both in-group and out-group members while making their decisions, and, afterwards, as a control, were asked to fill in a questionnaire measuring levels of identification and positive associations with others in the study.

The results showed that in-group conformity increased activity in those regions of the brain associated with the processing of rewards — including liquids, food, sexual stimuli and money, and more abstract rewards such as reputation — and with the experience of positive ‘affect’ (or mood). They also showed greater activity for in-group conformity in a region often implicated in the cognitive ability to understand the perspectives of others, indicating that people ‘mentalize’ more about in-group than out-group members.

Activity in this region correlated with participants’ assessments of the trustworthiness of the in-group: the higher the trust rating, the greater the level of brain activity.

In the pharmacological study, participants were divided into two groups. One was given oxytocin, a hormone often associated with social behaviour, and the other a placebo. They were then divided into two teams and asked to provide attractiveness ratings of unfamiliar stimuli. While viewing these stimuli, they were shown ratings provided by both in-group and out-group members. The results showed a selective in-group bias in decision-making when oxytocin was given. The hormone was found to induce conformity to the in-group when the two groups provided opposing ratings, but not when they both had similar views. This suggests that oxytocin not only promotes in-group favouritism but also stimulates people to conform to the behaviour and beliefs of others, particularly when doing so serves to distinguish themselves from members of other groups.

The two studies confirm the influence of social motivators on decision-making — and the presence of multiple factors when we make choices. They present a further challenge to the theory, posited in classical economics, that decision-making is rational.

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BUSINESS APPLICATION

These two studies are particularly relevant for leaders in the public sector. They suggest that:

• Social influence programmes may benefit from emphasising the positive aspects associated with in-group membership rather than stressing the negative feelings associated with social exclusion. (The hope of a gain, e.g. belonging/sense of identity, is usually a better motivator than the fear of a loss.)
• Campaigns to change people’s behaviour might be particularly effective if the target audience can identify with those promoting them. (The in-group member may activate affective and reward processes in the brain and thereby facilitate conformity. Thus, a campaign to cut the rate of teenage smoking might be more likely to succeed if ‘championed’ by teenagers themselves.)

The research, however, has a broader application. The findings:

• Underline the importance of word of mouth and social media in marketing and advertising – i.e. of in-group influence.
• Underline the importance of follower trust and sense of belonging in effective leadership.
• Point to the need for leaders to check for cognitive biases such as ‘groupthink’ in decision-making. (If members of a board or a governing body are too close to each other they might — subconsciously at least — put the search for consensus before the search for the ‘truth’.)
• Help explain ‘gang’ mentality and factions and subcultures and cults — and why leaders have historically been able to ‘divide and rule’.

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REFERENCES

• ‘Social Context Effects on Decision-Making: A Neurobiological Approach’, Mirre Stallen, 2013.
• ‘Peer Influence: Neural Mechanisms Underlying In-Group Conformity’, Mirre Stallen, Ale Smidts, Alan G. Sanfey, 2013.
• ‘The Herding Hormone: Oxytocin Stimulates In-Group Conformity’, Mirre Stallen, Carsten K. W. De Dreu, Shaul Shalvi, Ale Smidts, Alan G. Sanfey, 2012.

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