Date: 31/05/2022

Thesis Niklas Strieder

Neuromarketing: Human Behaviour & Decision Making in consumer based

Neuroscientific Research

Niklas Strieder (20201858)

Supervisor: Andreea Bujac

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Title page

Title of the project: Neuromarketing: Human Behaviour & Decision Making in

consumer based Neuroscientific Research

Project: 4th semester, Thesis - MSc. Marketing, Aalborg University Business School

Project timeframe: 07/02/2022 - 01/06/2022

ECTs: 30 ECTS

Supervisor: Andreea Bujac

Amount of signs: 140414

Amount of pages: 64 (58,5 á 2400 characters)

Amount of pages of the references: 14

Amount of pages of the appendix: 21

Date: 31.05.2022

Author:

Niklas Strieder - Student Number 20201858

Signature _______________________________
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Abstract

“A good rule of thumb is to assume that everything matters”

- Richard H. Thaler, Nobel Laureate 2017

Neuromarketing is a field within Marketing and influenced by many other research

areas that all focus on consumer decision making. This process can be analysed on
different levels, either from a biological view to a neurological perspective, or a
behavioural and psychological angle. This thesis aims at presenting decision making
in consumer based research in the spirit of Richard Thaler, by including viewpoints
from many academic fields to show the interconnectedness and interdependent
influences. However, commercial application and the public image are another
influence towards the steady development and evolution of Neuromarketing.
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Table of Content

Abbreviations 5
Table of Figures & Tables 5
1. Introduction 6
1.1 Research statement 8
1.2 Project Outline 10
2. Theoretical Background 13
2.1 (Consumer) Neuroscience 13
2.1.1 The Cerebrum 14
2.1.2 The Cerebellum 17
2.1.3 The Diencephalon and Brainstem 17
2.2 Neuroeconomics 19
2.3 Behavioural Economics 20
2.3.1 System 1 21
2.3.2 System 2 22
2.3.3 Heuristics 23
2.4 Neuromarketing 25
2.5 Neuromarketing Techniques 26
2.5.1 fMRI 26
2.5.2 EEG 27
2.5.3 Eye-Tracking 28
2.6 Consumer-Decision Making Framework for Brand Preference 29
2.7 Chapter Summary 32
3. Methodology 34
3.1 Philosophy of Science 34
3.2 Ontology 36
3.3 Epistemology 37
3.4 Methods 38
3.4.1 Primary Data Collection 38
3.4.2 Secondary Data - Literature Review Process 41
3.5 Validity and Reliability 42
4. Current State of Knowledge in Decision Making Research 43
4.1 Consumer Decision Making and the Influence of Biases 43
4.2 Intention and Effect of Neuromarketing in Practice 50
4.3. The View upon Neuromarketing, the attempt to influence Decision Making
and its Ethical Implication 61
5. Discussion 65
6. Conclusion 69
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References 71
Appendix
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Abbreviations

AAU Aalborg University

CalTech California Institute of Technology

CBS Copenhagen Business School

CEO Chief Executive Officer

EEG Electroencephalography

fMRI Functional magnetic resonance imaging

INSEAD Institut Européen d'Administration des Affaires

MIT Massachusetts Institute of Technology

NSMBA Neuromarketing Science and Business Association

PhD Doctor of Philosophy

SaaS Software as a Service

UK United Kingdom

US United States

USD United States Dollar

VR Virtual Reality

Table of Figures & Tables

# Figure Figure Name Figure Page

Figure 1 The parts of the brain 15

Figure 2 The four parts of the Cerebrum 16

Table 1 Feature of the two systems 23

Figure 3 Value Signals important for brand decision 30

Table 2 Blueprint of Semi-Structured Interview 39

Figure 4 Growth of research applying neuroscience to marketing over time 51

Figure 5 Eye Tracking & EEG Neuromarketing Study for Lowe’s 59

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1. Introduction

Since its beginning, Marketing has always been about people’s needs, and how to
identify and address them most successfully. Over time, there have been many
categories discovered, added to and evolved from Marketing. One of the most
controversial sections within Marketing in the last years is Neuromarketing (Lee, N.,
Broderick, & Chamberlain, 2007) (Berns & Ariely, 2010) (Lindstrøm, 2010). The
increasing presence of Neuromarketing in academic and commercial environments
started due to a dissatisfaction with traditional marketing techniques and their lack of
a holistic consumer understanding, beyond the conscious consumer mind
(Rothensee & Reiter, 2019). Nobel Laureate Francis Crick defines the field of
Neuromarketing in a Harvard Business Review publication as follows:
“Neuromarketing - Sometimes known as consumer neuroscience—studies the brain
to predict and potentially even manipulate consumer behaviour and decision
making.” (Harrell, 2019) p.3). Most researchers differentiate between consumer
neuroscience and Neuromarketing, as the former focuses on academic research and
an in depth understanding of the brain and its activated areas, whereas the latter
tries to take the conclusions from the studies to apply them to practise and use them
for business related matters (Plassmann, Ramsøy, & Milosavljevic, 2012). A more
thorough definition and analysis on consumer neuroscience will be given in a later
chapter. Rothensee and Reiter (2019) define Neuromarketing as a subdivision in
marketing research which studies consumer behaviour by applying methods from
neurosciences (Rothensee & Reiter, 2019). Lange (2014) argues that
Neuromarketing lies at the intersection between neuroscience and neuroeconomics,
with a broad interdisciplinary background from neurology, physics, economy,
radiology and psychology (Lange, 2014). Other researchers such as Scheier (2012)
see the roots of Neuromarketing in neuropsychology, psychophysiology, artificial
intelligence, cultural studies, and developmental psychology (Scheier & Held, 2012).
However, almost all researchers agree that Neuromarketing emerged from many
different fields and it is not a fully developed area yet, but still in motion with new
developments and influences from many directions (Zurawicki, 2010).

In general, it can be said that Neuromarketing is the commercial use of

neuroscientific tools such as fMRI’s, EGG, and Eye-Tracking to achieve more
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reliable consumer insights. It is supposed to show what consumers really feel, even
if they are not aware of it. Neuromarketing identifies consumer reactions towards
brands, slogans, and advertisements by applying medical technology (Phan, 2010).
In an often cited experiment by McClure et at, conducted in 2004, participants drank
both Pepsi Cola and Coca-Cola in a blind testing. Most people preferred Pepsi over
Coca-Cola. When the participants could decide on a brand, most of them chose
Coca-Cola. The surprising fact is, that via brain scans, recorded with an MRI,
researchers could see that the brain triggered a much higher emotional response
towards Coca-Cola. This means that the brain made the participants think they
prefer Coca-Cola over Pepsi, because of all the attached emotions to the brand,
although their body reacted in favour of Pepsi-Cola (McClure et al., 2004) (Lee et al.,
2007) (Phan, 2010).

Neuromarketing techniques are used by some of the largest companies in the world
like Google, Facebook, IKEA, twitter, Tik Tok and Visa (Neurons, ). Due to sensitive
commercial information and limited public access to the research done for these
companies, the actual techniques and fields of application are restricted and often
not openly available (Lee et al., 2007).
The student elaborates on this limitation, as well as other boundaries like the high
costs and limited availability of research devices further in the paper. Nevertheless,
some basic information is publicly available, mostly due to Neuromarketing agencies
that have specialised on the field of combining academic research with practical
application for their customers and that share some insights as Marketing content on
their websites and blogs. Neurons, among others, is one example of an applied
neuroscience company, founded by Copenhagen Business School (CBS) professor
Thomas Ramsøy and located with its headquarter in Taastrup, Denmark (Neurons, ).
The analysis chapter presents a selection of Neuromarketing companies, for a better
overview of the different solutions offered on the market.

Another influence for Neuromarketing and a field that studies decision making to
understand the how and why behind it is Behavioural Economics. Researchers from
that field argue that the context a consumer is in, especially situational factors and
emotions, influence the decision-making a lot (Grapentine & Weaver, 2009). Many
scholars, Tversky and Nobel Prize winner Kahneman (1974) at the forefront, have
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researched in which way humans simplify the decision process (Tversky &
Kahneman, 1974). Kahneman and Tversky (2011) argue that the mind is divided into
System 1, which is in charge of intuitive and fast thinking and System 2, responsible
for more analytic and slow thinking (Kahneman, 2011). The brain is designed by
evolution to use less resources whenever possible and to prefer a quick solution
over an energy intensive decision making process. Simon (1990) was the first one
that coined the “methods for arriving at satisfactory solutions with modest amounts of
computation” as “Heuristics” (Simon, 1990), p.11). Heuristics are mental shortcuts,
used for a fast and intuitive decision making (Shah & Oppenheimer, 2008). A
common example for a heuristic, especially one that most often leads to a false
conclusion, is the following: Are there more words that begin with the letter K or more
words that have the K as their third letter in the English language? Tversky and
Kahneman (1974) show that the vast majority says that there are more words that
begin with the letter K, because the mind comes up with more examples for the first
case (Tversky & Kahneman, 1974).

To sum up the presented information and bring the different fields of research into a
suitable context for this thesis, it can be said that Neuroscience is the discipline of
studying how different brain areas interact and how mental processes occur
(Plassmann et al., 2012). Behavioural Economics studies the psychological decision
making process (Grapentine & Weaver, 2009). Neuromarketing, thus combines the
research of many different fields, by making use of neuroscientific tools and
Behavioural Economic decision making methods and studies, to determine ways
how to predict and influence consumer choices (Kenning, Plassmann, & Ahlert,
2007; Plassmann et al., 2012) (Grapentine & Weaver, 2009) (Renvoisé & Morin,
2007). The objective of this thesis is to present the reader to the studies of
Neuromarketing, explain what it is and show its application in consumer decision
processes, embedded in a neuroscientific and behavioural context.

1.1 Research statement

This thesis aims to present Neuromarketing in a holistic way, acknowledging its

influences from other academic fields, its perception in the public and media, and its
application for commercial results in business. As a prerequisite for this thesis, the
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fields of Neuromarketing, Neuroscience, Neuroeconomics and Behavioural

Economics are introduced, as well as the terms are defined and similarities and
differences are pointed out. The research formulation of this thesis is:

Neuromarketing: Human Behaviour & Decision Making in consumer based

Neuroscientific Research

To support the research statement and to further detect and clarify possible
problems, the following research questions are specified:

1. What theoretical and practical methods exist in the field of Neuromarketing

and how do they work in terms of consumer decision making?

As Neuromarketing analyses the consumer brain with different neuroscientifical

tools, a presentation of the most accepted and used techniques is important for a
better understanding. The presented approaches are further analysed for their
practicability and how they can help analysing consumer decision making.

2. What are the requirements to conduct a proper academic and scientific

Neuromarketing research that is also applicable to a commercial scenario?

This question relates to the concerns of some researchers that the term
Neuromarketing is experiencing a certain hype resulting in an increased offer of
sometimes defective, fraudulent or just unprofessional application of neuroscience
techniques or as such disguised techniques (Lee et al., 2007) (Murphy, Illes, &
Reiner, 2008). Since Neuromarketing is still a young field of study and at the same
time a very complex topic, there are some misconceptions as for example an
ultimate buying stimulus in the human brain that serve as arguments for an
academic approach (Rothensee & Reiter, 2019) (WILSON, R. M., GAINES, & HILL,
2008).
The third research question aims for a better understanding of industry standards
and rules in terms of a responsible use of Neuromarketing.
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3. What are the legal and ethical implication of Neuromarketing and what are, or
should be, the regulations for practitioners?

Many researchers have raised concerns not only about the academic application of
Neuromarketing but also about the morality of studying and applying these
techniques in a commercial setting that can be aimed at selling most profitably (Pop,
Maria, Radomir, & Ioana, 2009). Hence, the third research question takes these
concerns into account and presents existing literature about ethics in
Neuromarketing displayed from different perspectives. The next question is raised to
understand factors which can guide a consumer decision and that can be analysed
with Neuromarketing techniques.

4. How is human consumer decision making influenced and affected by biases?

This last question is based on Kahneman’s and Tversky’s (2011) studies in

Economics and their research towards heuristics, that the human brain makes use of
(Kahneman, 2011) (Tversky & Kahneman, 1974). Although the roots lie in a
Behavioural Economics, Neuromarketing can use some of these heuristics and
cognitive biases to influence a consumer decision (Plassmann et al., 2012)
(Ramsøy, Thomas Z., Friis-Olivarius, Jacobsen, Jensen, & Skov, 2012).

1.2 Project Outline

The present report is divided into six chapters that build upon each other to give the
reader a holistic understanding of Neuromarketing and its influence on consumer
decision making.
The first and current chapter serves as an introduction towards the topic, declares
the research statement and specifies it further with four research questions that
should be answered during the thesis.
In the second chapter, namely theoretical background, the student introduces the
reader to the studies of Neuroscience, Neuroeconomics, Behavioural Economics
and Neuromarketing. The brain is subdivided into two parts, the conscious part of the
brain, and the unconscious part. This classification will be further explained with the
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help of scholars from different academic fields and their definitions for the functions,
effects and influences of each part of the brain. As part of Behavioural Economics,
Niklas describes System 1 and System 2, two classifications of mental thought
processes by Kahneman (2011) before elaborating on heuristics and cognitive
biases (Kahneman, 2011). After the following subchapter about Neuromarketing, the
student presents Neuromarketing techniques, more precisely, functional magnetic
resonance imaging (fMRI), Electroencephalography (EEG), and Eye-Tracking. The
last part of the theoretical background chapter introduces a consumer
decision-making framework based on the work of scholars from all aforementioned
fields (Plassmann et al., 2012).

The third chapter deals with Methodology and Niklas’ point of view towards his own
role in academic context. It includes the Philosophy of Science, i.e. questioning what
science means, how science works and how it creates knowledge through a
plausible and organised process (Cunningham, 1980). Further parts of this chapter
include Ontology, Epistemology and the applied methods.
The fourth chapter analyses the current state of knowledge in Neuromarketing
research. It serves as a literature review and a comparison between research and
practitioners. Niklas approached two neuroscientific researchers to gather direct
insights. The written statements of Antonio Rangel, Bing professor of Neuroscience,
Behavioral Biology and Economics at the California Institute of Technology (CalTech)
are presented, analysed and interpreted (Appendix C). The second researcher is
Martin Skov, a neuroscientist at the Danish Research Centre for Magnetic
Resonance at Copenhagen University Hospital Hvidovre and professor at CBS, who
was interviewed by Niklas (Appendix B). Behavioural Economics and mental
shortcuts during the decision making are also explained in a Neuroscientific context.
The data gathering process is further explained in the methodology chapter while the
analysis part focuses on the examination, findings and interpretations both from
literature and praxis. It also takes a closer look at the different definitions of
Neuromarketing services and investigates their academic and professional
application in a commercial context. The consumer decision making is further
investigated, measured by means of academic sources and compared against the
view from Antonio Rangel and Martin Skov. The thesis explores consumer decision
making and how it can be subject to wrong conclusions or manipulation by others.
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The following subchapter deals with the neuronal detection of consumer choices,
more precisely via Neuromarketing techniques like EEG and Eye-Tracking. In
addition, the student presents a subchapter about heuristics and mental shortcuts
influencing consumer decisions before evaluating research and other scholars'
opinions about legal restrictions and ethical implication.
Chapter five gives space for a discussion about the topic and the different viewpoints
towards Neuromarketing and consumer decisions. What does the student personally
think about Neuromarketing and its commercial application? The thesis closes with a
conclusion and a final statement.
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2. Theoretical Background

The theoretical background elaborates on the formerly introduced fields by

presenting different definitions and viewpoints from researchers and their studies of
the subjects, to define a common academic ground for this thesis.

2.1 (Consumer) Neuroscience

For most of the time, Marketing researchers were not able to study consumers and
especially their emotional reactions in a decision making process on a neuronal
level, due to the unavailability of such measures and in its beginning the exorbitant
costs of the machines which were primarily manufactured for medical purposes
(Berns & Ariely, 2010). Many researchers argue that the first major research that
connected neuroscience with consumer preferences was McClure’s et al (2004)
Coca Cola/ Pepsi Cola study. It answered the question “What are the underlying
brain processes of how brand information alters brand evaluations during
consumption?” by analysing the subjects’ brains in an fMRI machine during blind
tasting and known tasting of Coke and Pepsi (Lee et al., 2007; McClure et al., 2004;
Smidts et al., 2014).
Neuroscience in general is known as the study of the nervous system with the goal
of understanding the biological foundation of behaviour. It encompasses everything
from cellular neuroscience, i.e. the study of single cells, to systems neuroscience,
which is the investigation of how different areas of the brain interact with each other
(Plassmann et al., 2012). Due to the studies of McClure et al (2004) and following
researchers like Hsu et al (2005), the academic field of Consumer Neuroscience was
established (McClure et al., 2004) (Hsu, Bhatt, Adolphs, Tranel, & Camerer, 2005).

Consumer Neuroscience offers insights of the brain as well as tools for studying the
neural events that occur during decision making (Rangel, Camerer, & Montague,
2008). The discipline employs neuroscientific findings and methods to better
understand the fundamentals of consumer behaviour as they apply to marketing
(Kenning et al., 2007). Plassmann et al (2012) go on to argue that developing a
neuroscientifically sound theory to understand consumer behaviour requires
combining methods and theories from neuroscience with behavioural theories,
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models, and tested experimental designs from consumer psychology and related
areas like behavioural decision sciences (Plassmann et al., 2012).
It is important to emphasise the academic focus and not the commercial exploitation
as the driver for neuroscientific studies. Neuroscience provides enhanced theory
building and empirical validation, especially when the context such as hunger, stress
and social influence on the consumer, its choice and its preferences are taken into
account. It can help to predict consumer behaviour better by understanding the
decision-making process on a neuronal level. Yoon et al (2012) point out that
understanding the underlying mechanisms that lead to an observed choice, allow
researchers to “(a) generalize this knowledge, (b) understand contextual influences
that may interact with the different neural circuitry leading to different choices, and
(c) create interventions or influence those decisions more effectively” (Yoon et al.,
2012) p.475).
In other words, by taking the consumer context into account and observing the
neuronal responses, it is possible to create decision making models. Such a
consumer decision framework is introduced at the end of the theoretical background
chapter.
The following subsections divide the brain in three areas with different functions,
regarding its neuroscientific classification: Cerebrum (1), Cerebellum (2) and
Diencephalon and Brainstem (3). There are many possibilities to categorise and
dissect the brain. The following division has been chosen for a better overview.

2.1.1 The Cerebrum

First of all, it should be mentioned that there is no absolute medical cut between the
three presented parts of the brain. For a long time, there was a widely popular
theory, that the brain evolved in different stages and could be clustered into the
oldest part, i.e. the “Reptilian brain”, with a later expansion of the “Mammalian brain”,
and the “Homo Sapiens brain” each on top of the previous. This has been
scientifically disproven, or to say it in the words of Cesario et al (2020) “Your brain is
not an onion with a tiny reptile inside” (Cesario, Johnson, & Eisthen, 2020), p. 255).
The so-called Triune brain, invented in the 60’s, proposed three independent areas
of the brain that each respond to different mental activities: The reptilian brain should
only be activated in fight-or-flight and other primal actions, the mammalian brain in
emotional situations, and the homo sapiens brain for rational decisions (Macklin,
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1978; MacLean, 1964). Although the clinical separation into three brains and most
importantly the evolutionary “stack up” have been discredited, the rough
segmentation into three parts that control, in cooperation with the other parts, the
human decision-making process finds continuous support by many popular-scientific
Neuromarketing authors such as Patrick Renvoisé & Christophe Morin (2007) or
Martin Lindstøm (2010) (Renvoisé & Morin, 2007) (Lindstrøm, 2010) (Butler, 2009).

The human brain is made up of two sections that are joined by corpus callosum.
Hemispheres is the medical term for the two sections. In addition, the brain is divided
by medicine into four major sections (Ackerman, 1992). These are the following:
● Cerebrum
● Cerebellum
● Diencephalon
● Brainstem

Around 80-85% of the human brain consists of the cerebrum, as shown in figure 1
(Abhang, Gawali, & Mehrotra, 2016).

Figure 1: The parts of the brain Source: (Moini, Koenitzer, & LoGalbo, 2021)
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It is therefore the largest part of the brain and controls memory, senses, speech and
emotional responses. It can be further clustered into four lobes, as seen in Figure 2,
that each are responsible for a certain task.

Figure 2: The four parts of the Cerebrum Source: Prabhakar (2017)

The frontal lobe is the centre for emotional and cognitive processes. Voluntary motor
controls, mood, motivation, decision-making and planning, emotional control, speech
and the judgement of appropriate behaviour are all controlled by that area (Moini et
al., 2021). More specifically the frontal lobe sits in the front of the brain and stretches
back to a fissure called the central sulcus. It includes the motor cortex, which is
responsible for movement planning and coordination; the prefrontal cortex that is in
charge of more demanding cognitive performance; and Broca's area, necessary for
linguistic knowledge (Prabhakar, 2017; Spielman et al., 2014). A lot of neuroscientific
studies take a closer look onto the prefrontal cortex, as it has shown that this area
activates in many situations for prediction of value, evaluation of price, decision utility
and self-reflection (Berns & Ariely, 2010; Plassmann, O'Doherty, & Rangel, 2007;
Plassmann et al., 2012). As a small digression, the cerebral cortex covers the
cerebral hemispheres and makes up to 40% of the total mass of the brain, whereas
the neocortex accounts for 90% of the former (Moini, Avgeropoulos, & Samsam,
2021).
A famous example out of history that also answers the question of what happens
when the frontal lobe, including the prefrontal cortex is damaged, was Phineas Gage
in 1848. He was working on the railroads in the US, when by an accident, an iron rod
penetrated his skull and severely damaged his prefrontal cortex. Although Gage
17

survived by wonder, his personality changed completely, as he was described by

friends and family like a social, well-educated and nice man before the accident, and
irrational, impulsive and generally antisocial after the incident (Plassmann et al.,
2012; Spielman et al., 2014). Later autopsies confirmed that the damage to his
prefrontal cortex caused a malfunction in rational decision making and emotion
processing (Damasio, Grabowski, Frank, Galaburda, & Damasio, 1994).

Two other of the four lobes, parietal lobe and occipital lobe, are mainly responsible
for visual processing and host the main visual centre of the brain (Moini et al., 2021).
The final lobe is called temporal lobe and is mostly responsible for learning and
memory consolidation (Moini et al., 2021).
As a short summary, the cerebrum is the biggest part of the brain that hosts four
lobes of which the frontal lobe, especially the prefrontal cortex receive the most
attention for neuroscientific studies (Yoon et al., 2012). It is labelled as the more
rational and conscious part of the brain (Plassmann et al., 2012).

2.1.2 The Cerebellum

The cerebellum accounts for around 10% of the brain’s mass and sits under the
cerebrum, below the temporal and occipital lobes, as previously seen in figure 1
(Abhang et al., 2016). It is responsible for skilled repetitive movements, posture and
balance of the body. Injuries of the cerebellum can cause a loss of coordination and
problems in moving the extremities (Ghez & Krakauer, 2000). The cerebellum also
acts as a rerouter of impulses for movement from areas inside the cerebrum to the
spinal cord (Ackerman, 1992). Although possible, dividing and explaining the
cerebellum further is not necessary for the outcome of this thesis and does not limit
the understanding of the brain and its presented functions.

2.1.3 The Diencephalon and Brainstem

The diencephalon is located inside the cerebrum above the brainstem. It is not part
of the cerebrum but surrounded by it, as figure 1 shows. The tasks of the
diencephalon include sensory functions, monitoring of food intake and the body’s
sleep cycle. It is further divided into the sections of the thalamus, hypothalamus, and
epitheliums (Abhang et al., 2016). These areas are all important for perception,
movement and the body’s vital functions. The thalamus with its 4x1,5cm, accounting
18

for up to 80% of the diencephalon, sorts information from the four senses; sight,
hearing, taste, and touch and sends them further to the cerebral cortex. It is also
responsible for sensations, such as pain, temperature and pressure, as well as the
categorization of pleasant or unpleasant experiences (Ackerman, 1992; Moini et al.,
2021; Prabhakar, 2017).
Although the hypothalamus is very small in size (like a pearl), it regulates the
endocrine system, i.e. the hormone system in the human body. A damaged
hypothalamus can cause uncontrolled eating, obesity and uncontrolled increases in
body temperature (Moini et al., 2021). The hypothalamus is also part of the limbic
system, explained below, and translates the six fundamental emotions into physical
responses, further explained below. When a strong feeling whether triggered by an
external stimuli or by the mind occurs, the cerebral cortex sends impulses to the
hypothalamus that converts them into a physical reaction by the relief of hormones.
Examples for this are a racing heartbeat, gasping, or a “gut feeling” that some people
describe (Ackerman, 1992).

At this point it is important to define emotions for a better understanding of this

thesis. Emotions can be either of behavioural, automatic, or hormonal nature. There
are further six fundamental emotions: Happiness, sadness, anger, disgust, fear and
surprise (Abhang et al., 2016). Emotions are usually described as an individual’s
immediate behavioural reaction to a cue or a stimuli that can be either negative or
positive. Ramsøy & Skov (2010) argue that positive emotions stem from reward and
approach behaviours and can be traced back on a neuroscientific level from the
ventral tegmentum in the midbrain (part of the brainstem) to the frontal lobe.
Negative emotions, linked to distaste and avoidance behaviours, can be mainly
controlled by the amygdala (Ramsøy, Thomas Z. & Skov, 2010).

The aforementioned limbic system is a complex neural network that includes among
others the hypothalamus and the amygdala. The limbic system also influences
emotions, memory, and motivation (Moini et al., 2021). It is one of the oldest parts of
the brain. Ackerman (1992) describes the limbic system as a collection of
interconnected structures that form a “loose circuit” throughout the brain and react to
“stimuli that can affect the emotional brain”. (Ackerman, 1992), p.21). She continues
to link the thalamus, hypothalamus and amygdala to the limbic system that are part
19

of the diencephalon and brainstem. Lindstrøm (2010) states that the amygdala,
located in the middle of the brain, deep inside the temporal lobe and lining the
brainstem, is named after the Greek word for almond, based on its size (Abhang et
al., 2016; Lindstrøm, 2010). It controls negative emotions as fear and based on that
also determines which memories are stored in the brain (Bailey, 2018). Several
researchers conducted experiments and studies that highlight the amygdala as an
important player in aversion and avoidance behaviours.
The limbic system, with the amygdala at its forefront, is responsible for an automatic
emotional response and sends this information to other areas such as the neo frontal
cortex, to support a more cognitive decision making. The amygdala also creates
pavlovian responses over time, i.e. conditioning of the human brain to certain stimuli
that have been experienced before (Ramsøy & Skov, 2010; Rangel et al., 2008).
LeDoux (2004) adds that the Amygdala “has a greater influence on the cortex than
the cortex has on the amygdala, allowing emotional arousal to dominate and control
thinking” (LeDoux, 2004; Renvoisé & Morin, 2007), p.8).

In conclusion, it can be said that the presented areas of the brain are mainly
responsible for what sensorial information will be forwarded to the other parts of the
brain and what decisions will be intuitively made. The process happens
unconsciously (Plassmann et al., 2012). This part of the brain, including amygdala
and basal ganglia, plays an important role not only in consumer behaviour but also in
the formation of consumer choices and is therefore further analysed in chapter 4.2
Intention and Effect of Neuromarketing in Practice.
A different field of studies that is also taking neuroscience and human behaviour into
account is Neuroeconomics.

2.2 Neuroeconomics

Some argue that Neuroeconomics takes the macro view from economics and the
micro view from neuroscience, to combine it to an own research (Braeutigam, 2005).
What can definitely be confirmed is the interdisciplinary field of Neuroeconomics,
which not only influences other schools of thought but is also influenced by them like
Psychology and Behavioural Economics. Lee et al (2007) describe Neuroeconomics
20

as the analysis and understanding of economic behaviour by applying neuroscientific

tools (Lee et al., 2007).

Neuroeconomics analyses value-based decision making on the basis of

neurobiological studies. It investigates human behaviour in the decision making
process by taking a closer look at the brain on a neuronal level and researching the
computations of the brain towards a decision (Rangel et al., 2008). Most
neuroeconomic models make the assumption that value-based decision making
includes both cognitive and emotional elements. Neuroeconomics holds that the
predicted values (also called the predicted utility) of available options influence
decision making (Ramsøy & Skov, 2010). Lindstrøm (2010) describes
Neuroeconomics as “the study of the way the brain makes financial decisions”
(Lindstrøm, 2010), p.13).

The goal of neuroeconomics is to comprehend the neural systems that support and
influence economically relevant behaviour in the real-world. It further tries to examine
how the neural system as a whole engages and how it might use scarce resources
like metabolic energy, attention, or other processing capacities (Braeutigam, 2005).
Some neuroeconomic studies research how decisions are influenced by the
judgement of the situation, the preference for specific information, and conditioning
based on previous experiences and behaviour (Ramsøy & Skov, 2010). Other
studies try to comprehend how the human brain examines objectives during decision
making, as well as how other cognitive, emotional, and visceral processes influence
the processing of economic value.

2.3 Behavioural Economics

Economists like John Stuart Mill in the 19th century used to believe in the idea of a
homo economicus, i.e. a complete rational and analytical individual, always looking
to maximise its value and outcome. This has been disproven by many researchers
and countless studies. It has been shown that humans very often act irrational,
emotional, impulsive and without complete information (Reed, Niileksela, & Kaplan,
2017). Therefore, some researchers even suggest the term “Homer economicus”,
instead of homo economicus, to draw the comparison of Homer Simpson to human
behaviour and decision making (Thaler & Sunstein, 2008). Because humans and
21

their choices, as well as the process of choices are not explainable with the homo
economicus model and traditional economic theories, scientists started to search for
more plausible models, taking psychology and behaviour into account (Angner &
Loewenstein, 2007). Behavioural Economics is the approach to understand decision
making and behaviour, from both an economic and a psychological standpoint
(Camerer, Loewenstein, & Rabin, 2011). Researchers thereby consider irrational
behaviour in decision making (Reed et al., 2017).

Behavioural Economics, same as Neuroeconomics, has a choice-centred approach.

This means that Neuroeconomics uses neuroscientific tools and Behavioural
Economics psychological tools, to better understand the decision making. This is at
the core of all studies (Bossaerts & Murawski, 2015).

The studies of Behavioural Economics focus most often on heuristics, biases,

cognitive mistakes, decision tendencies and rules of decision making, analysed in
empiric experiments (Reisch & Oehler, 2009). Heuristics and biases are to be further
explained in subchapter 2.3.3, as well as biases and their application.
Individual judgements and choices deviate from optimal decision making and
information processing in a variety of ways, according to researchers. The majority of
these discrepancies from rationality are caused by a limited capacity for processing
information relevant to the decision problem (Milosavljevic, Navalpakkam, Koch, &
Rangel, 2012). Kahneman & Tversky are two of the most famous scholars on this
topic, also due to the fact that Kahneman has been decorated with the Nobel prize
for their decade-long research on heuristics and the way the mind, or better said two
minds, also declared as System 1 and System 2, work towards decision-making
(Kahneman, 2011; Tversky & Kahneman, 1974).

2.3.1 System 1
Looking at the history of theories and thoughts that evolved around a mind that is
divided into different parts from a behavioural aspect, it is possible to go back even
to Plato, who already had the idea of reason, spirit and appetite. On a less
philosophical and more psychological and modern level, there have been more and
more scholars starting in the 1970’s to come up with dual-process theories. The
focus is sometimes a different one, but almost all researchers agree on two systems,
22

entities, or structures of the mind, regarding mechanisms to process information

(Frankish & Evans, 2009).
Kahneman (2011) describes System 1 as the automatic and quick part of the mind. It
works largely without any effort (Kahneman, 2011). Evans (2008) clusters System 1
and System 2 into four overall categories, namely consciousness, evolution,
functional characteristics and individual differences, to compare both (Evans, 2008).
Not surprisingly are they almost always contrary in characteristics. System 1 acts
cognitively unconscious, implicit, automatic and rapid. Automation refers to the
acquisition of motor skills that have been automated or programmed, in contrast to
the controlled and conscious skills (Chaiken, 1999). System 1 further has a high
capacity and works on default, which means that it is more often activated or kind of
‘always on’, in comparison to system 2 (Evans, 2008; Kahneman, 2011). It is also the
evolutionary older of the two systems, being shared with animals, and not linked to
language (Evans, 2008). However, this has nothing to do with the Triune brain, which
has a biological and neurological argumentation, instead of a behavioural one.
System 1 works independent of the general intelligence of the individual and is also
autonomous of the working memory, hence universal and not heritable, i.e. not
dependent on genes (Frankish & Evans, 2009).

2.3.2 System 2
Just as System 1 is responsible for thinking fast, System 2 takes the part in
slow-thinking. System 2 directs attention to demanding mental activities, including
complex calculations. The operations of System 2 are often accompanied by the
subjective experience of freedom of decision and concentration (Kahneman, 2011).
Frankish & Evans (2009) argue that System 2 is responsible for decontextualized
abstract thinking that only humans are capable of (Camerer et al., 2011; Frankish &
Evans, 2009). It is the analytic and systematic mind of the two. Table 1 shows both
systems and their different attributes in an easy overview.
23

System 1 System 2

Evolutionarily old Evolutionarily recent

Unconscious, preconscious Conscious

Shared with animals Uniquely (distinctively) human

Implicit knowledge Explicit knowledge

Automatic Controlled

Fast Slow

Parallel Sequential

High capacity Low capacity

Intuitive Reflective

Contextualised Abstract

Pragmatic Logical

Associative Rule-based

Independent of general intelligence Linked to general intelligence

Table 1: Feature of the two systems Source: (Frankish & Evans, 2009)

System 2 thinks logically and acts based on rules, rather than pertaining to simple
associations (Frankish & Evans, 2009). As slow and analytical thinking is more
energy consuming, it also has a lower capacity, i.e. it takes more effort to act
consciously (Evans, 2008). To save energy, the mind automatically prefers System 1
over System 2, also to derive to faster conclusions. These fast conclusions when
processing information are further presented in the following subchapter.

2.3.3 Heuristics
As stated in the introduction, these fast conclusions or also “methods for arriving at
satisfactory solutions with modest amounts of computation”, are called heuristics
(Simon, 1990) p.11). The main function of heuristics is to reduce the mental energy
that is consumed to solve a task (Shah & Oppenheimer, 2008). Heuristics can be
seen as a replacement of complex calculations of the mind towards a simplified
judgement and decision outcome. (Johnson, Payne, & Bettman, 2012).
24

Yoon et al (2012) are of the opinion that heuristics work best in a situation that
demands a rapid decision (Yoon et al., 2012). Tversky and Kahneman (1974) have
been at the forefront for researching and detecting heuristics that occur in
decision-making contexts (Lee, V. K. & Harris, 2013; Tversky & Kahneman, 1974). In
their widely recognised paper “Judgment under Uncertainty: Heuristics and Biases”
from 1974 that also laid the foundation for the Nobel prize in Economic Sciences in
2002 for Kahneman, they present three heuristics (Kahneman, 2011).
Namely, the representativeness heuristic, showing that people judge the probability
of how characteristic a person for a certain job is, based on stereotypical information.
So when a random person by the name of Steve is described as a shy and introvert
person, people rank the probability of him being a librarian higher than the probability
of Steve being a farmer, although there are statistically more farmers than librarians
(Tversky & Kahneman, 1974). These heuristics have been empirically proven many
times in studies, and many researchers have detected additional heuristics, since
Tversky’s and Kahneman’s article in 1974 (Camerer et al., 2011; Lee & Harris, 2013;
Reisch & Oehler, 2009). Thaler & Sunstein (2008) draw the connection between
heuristics and the possibility to frame these for a better outcome of everyone
involved. They argue, since humans commit so many mistakes, a pre-designed,
positive heuristic could ‘nudge’ people towards a better decision making (Thaler &
Sunstein, 2008), p. 10). This also takes part in the discussion in chapter five.

In addition to heuristics, it is also important to explain the aforementioned term of

biases and point out its differences. Biases are the result of heuristics, rather than a
synonym, as explained by Tversky and Kahneman (1974) (Tversky & Kahneman,
1974). In easy words, heuristics are often built because of previous experiences and
a mental shortcut or overly simple assessment of a situation. In comparison, a bias is
based on preference and a certain belief that has also manifested over time and
repetition. An example is the confirmation bias, when a person prefers reading
information that endorses their own position, instead of critically searching for more
sources. Even when this person is aware of the confirmation bias, he or she is still
most likely to continue consuming information that fits their worldview. This is in
contrast to heuristics as the reader has been introduced to the representativeness
heuristic with Steve the farmer. The next time when the reader is confronted with
such a message, he or she might remember this example and adapt its first and
25

intuitive thought, unlike the confirmation bias (Kahneman, 2011).

The next subsegment describes Neuromarketing in more detail and with which tools
it is possible to detect, make visible and analyse heuristics in a consumer’s mind.

2.4 Neuromarketing

Although Neuromarketing is first defined in the introduction, this segment adds

further definitions by other scholars and researchers and illustrates the most
important characteristics of Neuromarketing, before continuing with the presentation
of the three most often used neuroscientific tools for Neuromarketing purposes.
Neuromarketing has undisputedly many origins in different academic fields.
Depending on the perspective and the individual focus, some roots have a higher
influence than others, but in general and with a focus on this thesis, it can be said
that Neuromarketing connects research and tools from Neuroscience,
Neuroeconomics and Behavioural Economics (Lange, 2014; Rothensee & Reiter,
2019). Lee et al (2007) argue that Neuromarketing is the application of neuroimaging
to market research (Lee et al., 2007).
Neuroimaging, i.e. studying the brain with neuroscientific tools, offers new ways to
analyse and understand preferences, decision making and behavioural patterns in a
consumer and marketing context. Even if the test subjects are not able to verbalise
their explicit preferences, the neuronal reactions in the brain can much better
measure the effectiveness of an advertising campaign and might predict possible
consumer choices (Berns & Ariely, 2010). Therefore, Neuromarketing is used to
analyse and comprehend consumer behaviour in relation to markets and marketing
exchanges (Lee et al., 2007) The aspirations of neuromarketing investigations are to
gain objective data about the insides of consumers' brains without relying on
subjective evaluations (Murphy et al., 2008).
Plassmann et al (2012) argue that Neuromarketing attempts to put the findings of
studies into practice and to utilise them for business issues (Plassmann et al., 2012).
Rothensee & Reither (2019) reinforce the statement that Neuromarketing is a label
for a group of neuroscientific measurement technologies and concepts for a better
consumer understanding (Rothensee & Reiter, 2019). These technologies allow
insights into the brains of consumers and show their responses to marketing stimuli,
even if the consumer is not consciously aware of them (Renvoisé & Morin, 2007).
26

This is seen as an advantage in comparison to traditional Marketing approaches, as

the results can be obtained independently from the ability and willingness of the
subjects to state their viewpoint or behaviour (Lee et al., 2007).

2.5 Neuromarketing Techniques

2.5.1 fMRI
Brain imaging technologies (including among others fMRI) are the predominant
neuroscientific tools used for Neuromarketing (Rothensee & Reiter, 2019).
fMRI machines are huge medical equipment that weigh at least eight tons. The cost
in 2017 was between 500000 USD and 3 million USD for a machine (Gaskin,
Jenkins, Meservy, Steffen, & Payne, 2017). The study subject is moved into a
magnetic tube, lying down, without movements, while the machine itself emits a lot of
working noise (Berns & Ariely, 2010). fMRI is short for functional magnetic resonance
imaging and has its origin in medicine some 30 years ago, to research and better
understand neurodegenerative diseases, such as Alzheimer’s and Parkinson’s
(Phan, 2010; Prabhakar, 2017).
In simple terms, fMRI describes the level of haemoglobin, i.e. a protein in red blood
cells that transports oxygen through the body, and highlights the areas of the brain
that receive an increased amount of the oxygenated blood, due to a stimulus
(Lindstrøm, 2010). More specifically, signals are being sent from one neuron to
another via neurotransmitters. This starts a reaction, so electrical impulses fire up to
increase synaptic activity that results in an increased blood flow towards the
activated area. This increased blood flow, nurtured with haemoglobin, increases the
magnetic field during a scan, to make it measurable with the fMRI machine. The
computer then generates a visual representation of the contrasts between activated
and inactive areas of the brain (Berns & Ariely, 2010).
When the brain is confronted with a task, it requires energy. The harder one area of
the brain has to work on that task, the more oxygenated blood it requires, which is
then visible via fMRI. To see the difference between an active and inactive brain part,
the scientists take images of the inactive brain of the subject, before starting with the
study purpose, to later compare it to the active-working brain (Lindstrøm, 2010).
27

Neuromarketing researchers use fMRI machines to study multiple things as for

example the aforementioned Coca-Cola/ Pepsi-Cola study and the activation of the
pleasure centre of the brain, when blindtasting the soft drinks (McClure et al., 2004).
The activation of this centre, i.e. the nucleus accumbens in the limbic system as part
of the old brain, can program future popularity of certain experiences or products
(Karmarkar & Plassmann, 2019). An article in Forbes magazine describes a study at
Harvard Business School, where scientists could predict the commercial success of
a OneRepublic song, and the failure of others, by analysing the brain activities of
adolescents in an fMRI scanner that were listening to these songs (Nobel, 2013).
Apart from being very big in size, emitting loud sounds and being expensive until
today, fMRIs have two more downsides. The study subjects have to lie completely
still in a loud and very narrow tube, inside the machine. Also, only certain types of
things can be shown or used in an fMRI machine, mostly visual representations, that
do not require the individuals to move (Berns & Ariely, 2010).
McClure et al (2004) acknowledge that “with the behavioural results, it is possible
that this finding may suffer from noise in our estimates of subjects’ preferences”
(McClure et al., 2004) p.382).
As a quick digression, ‘noise’ is considered as all distracting stimuli, data and
information that would not occur in the same way in a real-life environment, such as
lying down in the scanner. One definition of the Merriam Webster dictionary for noise
that is also valid for this thesis is: “Irrelevant or meaningless data or output occurring
along with desired information” (Merriam Webster, ).

2.5.2 EEG
Electroencephalography (EEG) is a non-invasive brain imaging technique that
records the electrical activity of the brain at the scalp's surface. It was first introduced
in 1929 to record brain activity. In 1957, an improved model was used to monitor the
brain with electrodes and its rhythmical changes as a result of different mental tasks.

An EEG device is typically a cap with multiple electrodes or sensors attached to the
surface of the head. An EEG measures neurons' postsynaptic potentials (Abhang et
al., 2016). In other words, it assesses shifts in the electrical field via the electrodes
that sit on top of the subject’s head. An EEG has a high temporal resolution, which
28

means that it can trace short changes of the neurons in milliseconds to gain insights
into the subjects’ cognitive state (Berns & Ariely, 2010).
In another study at Harvard Business School, scientists found via EEG research the
main selling reason behind Cheetos, a US cheese puff/crisps brand. Researchers let
the study probants try Cheetos, while being connected to EEG’s that could measure
anger, lust, disgust, and excitement. Reportedly, the consumers enjoyed the cheese
dust that stuck to their fingers, when eating the crisps, as their neurons fired in the
moment of sensing the sticky cheese powder (Nobel, 2013).
A disadvantage of EEG is that it only measures the outer layers of the brain, namely
the cerebral cortex, while it is not possible to reach the deeper areas of the brain as
with fMRI. At the same time, EEG lets consumers move freely during the study which
allows it to apply in real life scenarios as in a supermarket (Phan, 2010).

2.5.3 Eye-Tracking
This neuroscientific tool differs from the previously presented techniques in the way
that it is not analysing the brain, but rather focuses on the eyes, its movements, and
the change in size of the pupil, reacting mainly to visual stimuli (Phan, 2010). The
eye movements serve as an indicator to consumers’ attentional patterns
(Milosavljevic & Cerf, 2008).
Although not scanning the brain frequencies, Eye-Tracking is still a valid
neuroscientific technique due to the fact that most incoming information is of visual
nature, and the reaction to visual stimuli can tell researchers about the involvement
of individuals (Plassmann et al., 2012). Regarding the reaction time, a single
eye-movement takes only 200 milliseconds (Nobel, 2013). It takes 313 milliseconds
to build a preference for a certain brand or product (Milosavljevic, Koch, & Rangel,
2011). The pupillary dilation serves as an indicator to arousal and pleasure (Bray,
Rangel, Shimojo, Balleine, & O'Doherty, 2008). This has been proven in different
experiments, one example is Ramsøy et al’s (2012) study where they tested different
sounds on subjects, wearing Eye-tracking devices. An unpredictable sound was
associated with a negative emotional response and made visible by a reduction of
the size of the pupil. The scientists show that when a subject was asked to rate their
first perceptions of new brand logos while listening to simple sounds, brand logos
paired with unexpected sounds were rated less positive than logos with an expected
sound (Ramsøy et al., 2012).
29

Plassmann et al (2012) derived three types of eye movements for people that are
viewing ads. In a time, recognition, and involvement ascending order, the first type is
scanning, where the eyes move to the headline and image. The second one is
scanning, which includes looking at the brand. The third and most intense eye
movement is called sustained and includes looking at the headline, pictorial, brand,
and text (Plassmann et al., 2012). These eye-movements are put into the context of
a Neuromarketing model in the next subchapter.

2.6 Consumer-Decision Making Framework for Brand Preference

One aspect that Marketers have always been interested in is the decision making
process of consumers.
How do consumers get to make a decision and how does Marketing affect this
decision making process?

As Neuromarketing techniques allow researchers to take a closer look into the brain
of consumers, it is therefore also of great interest to many marketers to understand
the decision making on a neuronal level.
The now presented model has been developed by Plassmann et al (2012) building
on top of previous work in consumer psychology, behavioural economics and
consumer science (Kahneman, 2011; Plassmann et al., 2012; Rangel et al., 2008;
Yoon et al., 2012). It describes the steps for brand preference formation in the
consumer mind, to better understand and influence consumer decisions for
Neuromarketing purposes (Plassmann et al., 2012). Figure 3 shows the ingredients
that are necessary.
30

Figure 3: Value Signals important for brand decision Source: (Plassmann et al.,
2012)

Starting with Representation & Attention (1), consumers have an absolute overflow
of information at all moments of which the mind only processes a fraction. The rest is
directly sorted out, why it is important for a brand to pass the threshold into a
consumer’s mind (Milosavljevic & Cerf, 2008). The first step for a consumer when
choosing a brand is to map possible alternatives. Incoming data is analysed,
complemented by internal information like hunger or thirst, and external information
like time, setting and environment, to create options to choose from. Plassmann et al
(2012) call this brand identification (Plassmann et al., 2012).
On a neurological level, the visual stimuli is processed by the visual cortex, located
in the occipital lobe and supported by the dorsolateral prefrontal cortex in the frontal
lobe involved with predicted value and remembered value (Berns & Ariely, 2010;
Plassmann et al., 2012).
31

The two most important ways of attention, to select and choose from all available
information are bottom-up and top-down saliency filters. In easy words, bottom-up
attention is everything that automatically grabs the attention of the consumer's mind,
even if he or she was not planning on focusing his or her attention to it. This includes
contrast, density, brightness, movements, and more.
Again, on a neurological level, the first place in the brain to react to the external
stimuli is the thalamus, as part of the diencephalon, i.e. the old brain, before it is sent
to the visual cortex. The signal travels from the bottom up to the top of the brain and
is therefore being called bottom-up attention (Milosavljevic & Cerf, 2008;
Milosavljevic et al., 2012) (Milosavljevic et al., 2011). This attention is automatic and
not consciously controlled, which is why it can be assigned to System 1 on a
behavioural level. Top-down attention is the opposite, where consumers need to
focus to choose between the options. As this process requires mental energy,
System 2 executes this saliency filter (Kahneman, 2011). The frontal lobe, together
with the primary visual cortex is activated first, hence it is an attention from the top of
the brain, down to the other regions (Milosavljevic & Cerf, 2008; Milosavljevic et al.,
2011). In terms of influencing consumer decisions, the visual appearance of the
product can therefore influence the chances of consumer preference.

The next step in the framework after having chosen a brand or product is the
Predicted value of a brand (2). It reflects the perception of a consumer towards the
future payoff of choosing a certain brand over another. Loyal customers have shown
an increased activity in the striatum (part of basal ganglia and the limbic system) in
comparison to an unloyal reference group. The stronger or more desirable a brand is
perceived, the more active the insula (between temporal and parietal lobe in the
cerebrum). This area is usually responsible for negative emotions, but also arousing
emotional experiences.

The third step in the framework is the actual experience of the brand, the so-called
Experienced Value (3). It analyses the satisfaction a consumer draws from the brand
or the product and it is considered to be the most important value in behavioural
economics, for a value-based decision making (Kahneman, 2011). Valence and the
intensity both influence the experienced value. Neurons in the orbitofrontal cortex
(cerebrum) fire up at the moment the consumer experiences a positive, i.e. a
32

pleasant or joyful experience. This means that the experienced valuation system is
controlled by higher cognitive processes, found in the new brain (Plassmann et al.,
2012).
Nevertheless, McClure et al’s (2004) Pepsi/Coke study has proven that experienced
value is also dependent on brand associations, as the important areas for memory
and association (namely the hippocampus as part of the limbic system and the
dorsolateral prefrontal cortex among others) were not activated in the blind tasting
(McClure et al., 2004).

This has a direct influence on the next step in Plassmann et al’s (2012) framework,
the Remembered Value (4a) (Plassmann et al., 2012). This is the process by which
diverse brand associations are encoded, consolidated, and recalled in the memory of
the consumer. Parts of these processes, according to researchers, unfold
subconsciously (Plassmann et al., 2012; Ramsøy & Skov, 2010). The term
"remembered value" refers to both explicit and implicit memories of previous
consumption experiences. Implicit brand memory refers to information about a brand
that has a subliminal, or unconscious influence on the decision making result. The
unconscious part of the brain (i.e. basal ganglia) shows to be the active area during
implicit brand memory (Plassmann et al., 2012; Renvoisé & Morin, 2007).

The final element in the decision making framework is Learning (4b). It is

interconnected with experienced value (3) and remembered value (4a). Basically,
consumers define their preferences for one brand over another via post-experience
behaviour. The presented framework draws the different actions during the decision
making process and shows how consumers form preferences. This will be further
analysed in combination with insights from Behavioural Economics in the fourth
chapter.

2.7 Chapter Summary

This subchapter serves the purpose to sum up all the afore-presented information in
a short and understandable overview.
Consumer Neuroscience analyses consumer brains for a better understanding of the
decision making process on a neuronal level (Berns & Ariely, 2010). Therefore, the
33

brain needs to be understood not only from a biological standpoint, but also a
psychological one.
There are three parts of the brain that can be distinguished in this context. Beginning
with the Cerebrum which carries the cortex, and includes the prefrontal cortex,
responsible for the prediction of value, price-evaluation and decision utility (Yoon et
al., 2012). From a psychological perspective, it can be said that the Cerebrum
carries the parts of the brain, responsible for conscious actions.
The Diencephalon and the brainstem fulfil most of the unconscious functions in the
brain. The amygdala is involved in emotion processing and intuitive decision-making.
It furthermore takes a big role in the control of body responses like facial
expressions, respiration, pulse, sweating and pupil dilation (Ramsøy et al., 2012).
Behavioural Economics aims at a better understanding of decision making and
behaviour, while having human mental shortcuts as heuristics and biases in mind.
Neuromarketing and more importantly its techniques, such as fMRI, EEG, and
Eye-Tracking, are used to test hypotheses and deduct knowledge and practices for
economic and commercial use.
The consumer decision making framework takes a closer look at brand preference
formation.
34

3. Methodology

In the methodology chapter, Niklas explains his point of view and the logical
understanding of this thesis. The student has gathered some previous experience
and reflections on methodology that have shaped his idea on the role of the
researcher, interacting with external sources and bringing old and new insights into
the context of this paper (Einarsdottir, Strieder, Tasiopoulos, & Alonso Saavedra,
2020; Einarsdottir, V., Alonso Saavedra, Tasiopoulos, & Strieder, 2021).
The methodological chapter is structured into five subchapters and follows roughly
the order of Kuada (2014), starting with the philosophical perspective (3.1),
continuing by presenting issues of ontology (3.2), and explaining the epistemological
choice (3.3) of Niklas. The methodology closes with a description of the chosen data
collection tools (3.4) and a short explanation about validity and reliability (3.5) for this
thesis (Kuada, 2014).

3.1 Philosophy of Science

Glattfelder (2019) describes in his book the scarcity of scientists that openly define
their beliefs and point of view regarding their scientific approach because “by
definition, this information is non-scientific” (Glattfelder, 2019) p.325). The student is
aware of this paradox, yet tries to describe his scientific thinking with the help of
pre-defined classifications that are now presented. The philosophy of science is the
school of thought that tries to create a frame for all questions that concern the
methods, knowledge and logic of scientific work (Runehov & Oviedo, 2013).

It is further important to present and explain the paradigm used for this thesis. A
paradigm should bridge the conception of science (i.e. Philosophy of Science (3.1))
and the conception of reality (i.e. Ontology (3.2.) and Epistemology (3.3)) with the
Methods (3.3) to illustrate Niklas’ beliefs (Arbnor & Bjerke, 2009).
Niklas point of view is that knowledge is constructed as the result of various factors
that affect scientists. Everyone constructs their own knowledge and understanding of
the world in interactions with their surroundings and their subjective experience
(Glattfelder, 2019). This is called the constructivism paradigm and it is based on the
assumption of multiple realities, as every person has individual experiences and their
35

own way of assessing them (Kuada, 2009). Knowledge is therefore constructed by

scientists and not primarily by the research data (Glattfelder, 2019; Kuada, 2014).
To construct knowledge, it is also important to be clear about the own interpretation
of thinking and reasoning. It can be said that Aristotle was the first one to frame and
use the term of logic as a means of reasoning over 2000 years ago (Glattfelder,
2019). Logic stems from the old Greek word “λογικὴ τέχνη” (“Logike Techne”) that
can be translated as the art of thinking (Adler, 1997). It helps the cause of this
chapter, yet the whole thesis, to work logically and coherent. Aristotle used deductive
reasoning to explain his point of view.
The student also uses deductive reasoning in the spirit of Aristotle as a way of
thinking, instead of inductive reasoning. Both concepts are now briefly introduced.
Deductive reasoning refers to the process of arriving at a logical conclusion based
on one or more premises. In other words, an assumption or theory is checked on its
correctness with the help of specific observations, i.e. testing the formulated
assumption (Hyde, 2000). The neuroscientists Prado, Chada & Booth (2011) give the
following definition: “Deductive reasoning is the process of drawing conclusions that
are guaranteed to follow from given premises” (Prado, Chadha, & Booth, 2011),
p.3483). An example for deductive reasoning is:
X is to the left of Y.
Y is to the left of Z.
Therefore, X is to the left of Z.
Inductive reasoning is the opposite. It takes specific observations as the core
element and formulates a theory, based on the observed examples. Inductive
reasoning starts with an observation and derives to a conclusion as this example of
inductive generalisation shows:
The A’s I see are bold.
All A’s I have ever seen are bold.
Therefore, all A’s must be bold.
It should be noted that the finding may not be an irrefutable truth based on previous
observations (Glattfelder, 2019).
Niklas focuses first on the theoretical background, gathering information and
resources about Neuromarketing, Behavioural Economics and related fields that
have an interest in decision-making, before analysing the current state of knowledge
by interviewing Martin Skov, a renowned Neuroscientist. In consequence, the
36

student uses deductive reasoning in this thesis by collecting data first and
conducting a qualitative interview to compare theory against praxis second (Hyde,
2000).

3.2 Ontology

Ontology supports the constructivism paradigm in the way that it clarifies the
conception of reality that is applied to this thesis. This field of study raises questions
about the nature of reality, existence, the view on reality and the meaning of being
(Kuada, 2014). According to Burrell and Morgan (1979), ontological assumptions are
concerned with three major questions about reality:

1. Is reality formed through internal, i.e. individual or external forces?

2. Is reality an objective product of individual consciousness?
3. Is reality an externally determined element or a product of the mind (Burrell &
Morgan, 1979)?

These questions should help the researcher to decide on a suitable paradigm for this
thesis. As the researcher in charge of this thesis, Niklas sees reality as formed
through internal forces and an individual product of the mind. Therefore, the
aforementioned constructivism paradigm is applied to this thesis.

The student is further aware of the existence of multiple, socially built realities
(Mertens, 2019). This perspective on reality has different names, depending on the
researcher, although they all follow the same ontological point of view.
Kuada (2014) calls this view that reality is constructed by individuals the interpretive
approach (Kuada, 2014).
Fast and Clark (1998) prefer the term nominalism (Fast & Clark, 1998).
Burrell and Morgan (1979) use the term subjectivist perspective (Burrell & Morgan,
1979).
Niklas collects empirical data in the form of an interview with Martin Skov, a
Neuroscientific researcher at the Danish Centre for Magnetic Resonance at the
Copenhagen University Hospital Hvidovre and professor at CBS, and a written
questionnaire, answered by Antonio Rangel Bing professor of Neuroscience,
Behavioral Biology and Economics at CalTech to compare it against the gathered
academic literature and to validate his view on reality. Jacquette (2014) argues that
37

this interpretive research cannot be generalised, as it applies to the context of the

thesis and the involved individuals as the student and the interview person
(Jacquette, 2014).

3.3 Epistemology

Just as Ontology asks the question of what reality is, Epistemology tries to
understand how we know what we know. It supports the underlying constructivism
paradigm in the way that it gives a frame to the theory of knowledge (Audi, 2011).
Martinich and Stroll (2021) explain the origin of the word epistemology as follows:
“The term is derived from the Greek epistēmē (“knowledge”) and logos (“reason”),
and accordingly the field is sometimes referred to as the theory of knowledge”
(Martinich & Stroll, 2021).
Kuada (2014) specifies Epistemology as the intersubjective perspective of a
researcher who studies his social environment (Kuada, 2014). To explain this
thought construct, an example can simplify Kuada’s (2014) words: When two people
stand in front of a blue wall, they can describe the blue wall, but they will always be
limited to their own intersubjective perspective. This means, there might be other
words in different languages, there are different shades of blue such as marine-blue,
turquoise, etcetera, the senses of the two individuals can be developed at a different
level, and so on.
As a researcher, studying the analysis of the blue wall by the two men, there are two
options. The researcher can either let the two men describe the wall by themselves,
without interfering in any way, or interact on some level with the two individuals and
therefore influence their behaviour and reality.
Kuada (2014) calls the first approach objectivistic with a positivist epistemology
(Kuada, 2014).
This means that the research is gathered objectively without any interaction between
researcher and study object. In the case of Neuromarketing, this is impossible, as
the researchers always interact with the study subjects, because a permission to
monitor the mind is required, as well as to mount the research tool onto the test
person. Also in the case of this thesis, Niklas interacts directly with several
researchers, such as Antonio Rangel and Martin Skov, to receive answers to a
written questionnaire, as well as the semi-structured interview itself, which allows
38

follow-up questions.
Therefore, Niklas applies Kuadas (2014) subjectivist approach with an anti-positivist
epistemology (Kuada, 2014). The student subsequently gains a subjective
impression of the study subject and this research displays Niklas perception of reality
that has been influenced by other stakeholders such as Antonio Rangel, Martin
Skov, and Andreea Bujac as the supervising professor.
The next subsegment, namely Methods (3.4), complements the Methodology and
explains primary and secondary data collection, to construct knowledge for this
thesis.

3.4 Methods

3.4.1 Primary Data Collection

In an academic context, there are qualitative and quantitative research methods. The
quantitative approach collects big sets of data, mostly numerical via questionnaires
and quantitative interviews, to evaluate research hypotheses and possible
correlations (Kuada, 2014).
Qualitative research, on the other hand, are all methods that cannot be dealt with in
any kind of quantification process (Hennink, Hutter, & Bailey, 2020). Qualitative
research helps to confirm theories and also generates a better understanding and
possible new perspectives. Furthermore, the use of qualitative data enables
scientists to become more engaged in the research process. It allows them to gather
insights tailored to their research and the individual characteristics of the problem
statement. The researcher also interacts on a more individual level with other
stakeholders that can have an impact on the collected data (Kuada, 2014).
Interviews are a perfect example for that. Niklas approached nine neuroscientific
researchers from institutions such as CalTech, CBS, University of Michigan, Emory
University and INSEAD to conduct a semi-structured interview.

There are three types of interviews, namely structured, non-structured and

semi-structured interviews. A structured interview has predefined questions and has
usually a low rate of interaction between the interviewer and the contestant.
Non-structured interviews are loose discussions between the interviewer and the
contestant about a specific topic. There is no predefined outcome, also supported by
39

the lack of a specific interview layout or pre-formulated questions.

A semi-structured interview lies in between the two extremes and combines aspects
from both techniques. It can include pre-determined questions as well as
open-ended inquiries. The combination of both allows the researcher to gather
knowledge in a non-linear manner, asking follow-up questions, having a closer look
at specific details and exploring new issues, while having an overall structure and
guidance during the interview (Hennink et al., 2020).
Table 2 shows the blueprint of the semi-structured interviews as conducted with
Martin Skov on Tuesday 3rd of May 2022 at 11:00 am via Zoom. The Interview is
part of Niklas’ primary data collection.

Blueprint of the semi-structured Interview

Structure Activity Approximate Time

Introduction & Set-Up Short self-introduction 3-6min

Brief the participant
Elevator Pitch thesis &
interview objectives
Explain interview method,
use of data, confidentiality

Question 1 Topic: Decision Making 2-4min

Question 2 Topic: Future Research 5min

Question 3 Topic: Ethical Regulations 5-7min

Question 4 Topic: Possible Risks 5-7min

Closing comments, Outro Show appreciation for 3min

taking the time
Offer help for his research
Table 2: Blueprint of Semi-Structured Interview Source: (Wilson, C., 2013)

The total interview, including the intro and the outro, lasted 35 minutes, until 12:05
pm. The interview started with the introduction of the student and a short
presentation of the topic of the thesis.
Niklas explained the perspective of the thesis and linked it to the research of Martin
Skov, whose paper and research is cited several times in this thesis. Martin Skov is a
Danish Neuroscientist, with over 25 years of experience and more than 80
40

publications in the field of cognitive neuroscience, neuroeconomics, neuroimaging

and decision-making (Skov, 2022). He is a research associate at the Danish
Research Centre for Magnetic Resonance, Copenhagen University Hospital
Hvidovre and professor at CBS, forming part of the Decision Neuroscience Research
Cluster.
After clarifying the semi-structured interview method and the restricted use of the
interview for this thesis only, Niklas introduced the four topics Decision Making,
Future Research, Ethical Regulations and Possible Risks for the interview. The
student shared a powerpoint presentation (Appendix A), with each topic and
question being limited to one slide, to prevent seeing all questions together. Martin
Skov had not previously received the questionnaire and was answering the
questions on the spot, without specific preparation.
The interview closed with appreciation towards Martin Skov, for taking the time and
his assurance to provide the student with a newly published paper about
neuroscience as well as tips and requirements for a possible future PhD career in
that field. The whole interview transcript can be found in Appendix B.

Apart from Martin Skov, Niklas approached eight other researchers that are all
Neuroscientists and cited several times throughout this thesis. None of the
researchers even replied to the student with the exception of Antonio Rangel, Bing
professor of Neuroscience, Behavioral Biology and Economics at CalTech. He
answered the same four basic questions that were also answered by Martin Skov,
via email in a written questionnaire on Tuesday, 26th of April 2022.

The purpose of interviewing neuroscientists is to collect qualitative data that can be

analysed and put into the context of this thesis. More specifically, allowing the
student to compare written sources to the real opinion of researchers and
practitioners that are most often not visible in academic papers. The following
chapter 4, Current State of Knowledge in Neuromarketing Research, examines the
statements of the two Neuroscientists Skov and Rangel in regards to consumer
decision-making, the application of Neuromarketing techniques in a commercial
scenario and the ethical implication of it with the help of further literature. This is
connected to the overall topic of a commercial analysis of consumer choices with
Neuromarketing techniques.
41

3.4.2 Secondary Data - Literature Review Process

The secondary data collection in this thesis are peer-reviewed articles and papers,
published in academic journals and via higher research institutions. In other words,
the methods for this thesis are a semi-structured interview as primary data and a
thematic literature review as secondary data source. This thesis contains a
theoretical background to introduce the reader to definitions, theories and techniques
of the different academic fields related to this thesis, such as Neuroscience,
Neuromarketing, Neuroeconomics and Behavioural Economics (Stallwitz, 2012).
According to Grant & Booth (2009), a literature review contains published materials
that gives an analysis of the literature with a wide range of topics with varying
degrees of depth and comprehensiveness. The synthesis, i.e. presentation, is mostly
narrative and displayed in either chronological, conceptual or thematic order (Grant
& Booth, 2009). The student chooses a thematic order for his research, structured in
Neuromarketing research, Neuroscience and Behavioural Economics. The literature
is further grouped in decision making, both from a Neuromarketing and a
Behavioural Economics perspective, supplemented with primary data. Attention,
awareness and consciousness is first presented in a neuroscientific context, to later
combine it with the behavioural economical angle about judgement under
uncertainty, heuristics, biases and other mental shortcuts. The secondary data
should help to present a balanced view from all mentioned academic fields and
justify, i.e. explain, the four research questions raised in the introduction. The
analysis about intention and effect of Neuromarketing in practice is backed up with
literature from well known neuroscientific and behavioural economic researchers and
their studies, such as McClure et al (2004), Lee et al (2007), Berns & Ariely (2010),
Plassmann et al (2012), and more (Berns & Ariely, 2010; Lee et al., 2007; McClure et
al., 2004; Plassmann et al., 2012).
Ethics also play an important role in the thematic literature review and the student
analyses this topic with the help of articles about Neuroethics, and malpractice
examples in popular-scientific books, but also peer-reviewed and reputed
researchers. All in all, the applied literature serves as a guide towards a better
understanding of decision making in consumer based research, while simultaneously
responding to the research questions. As the presented area of study is broad and
contains elements and influences from many other fields, small summaries in
42

between help to define findings and insights.

The next subchapter deals about the validity and reliability of the used sources and
should emphasise the credibility of this research.

3.5 Validity and Reliability

This subchapter serves as a testimony to the attempt of a valid and reliable

research. Reliability refers to the replicability and consistency of the data collection
process. Are the findings similar to the observations of other researchers? To receive
reliability, information and data should be confirmed by more than one other source.
Franklin et al (2010) argue that the role of reliability is depending on the
epistemological view of the researcher (Franklin, Cody, & Ballan, 2010). Niklas’
viewpoint is previously explained in the chapter. The student and his subjective
impression is influenced by stakeholders such as Martin Skov and Antonio Rangel.
However, Niklas tries to back up the information and data process by several
peer-reviewed sources.
In the context of qualitative data, reliability is also referred to as dependability. It
means that scholars attempt to adjust for varying conditions in their observations.
One example from the topic of this thesis is the fast advance in technology and the
evolution of test devices. This is also in line with the epistemological belief that there
is no final or absolute truth. Later chapters show that even peer-reviewed articles,
published by reputed and well-known academics and scientists cannot guarantee an
ultimate validity and reliability.
43

4. Current State of Knowledge in Decision Making Research

This chapter reviews an extended Neuromarketing and Behavioural Economics

literature with a special focus on consumer decision making.
First, a placement of decision making for this analysis, as well as the areas of the
brain that take part in it, are given. It is then put into the context of Plassmann et al’s
(2012) Consumer Decision Making Framework. After showcasing some influential
biases, the question of how biases and heuristics affect the decision making is
answered by the two responding Neuroscientists Martin Skov and Antonio Rangel.
Academic sources, especially from the field of Behavioural Economics help
answering the question by presenting different examples.
This leads to the role and effect of Neuromarketing in practice. Introducing several
Neuromarketing companies and their history from the early 2000s until today, the
student analyses the requirements for an academic and scientific research,
applicable to practice.
The last subchapter deals with the legal and ethical restrictions of Neuromarketing,
by letting public media journals and their concerns speak. This is further analysed
with the help of peer-reviewed answers about the ethics of Neuromarketing.

4.1 Consumer Decision Making and the Influence of Biases

Up to this moment, the term decision has been used over 100 times in this thesis,
mostly in combination with an action, as the decision process or decision making. In
Neuroscience, the decision making process is analysed on a neuronal level.
Researchers analyse what areas in the brain are activated for the different stages of
the process, as well as how they interact with each other (Rangel et al., 2008).
Neuroeconomics studies value-based decision making on a neurobiological basis.

As a short digression, value-based decision making is all actions, from simple food
related choices by an animal to highly complex human decisions as stock market
trading. It is a suite of functional brain processes involved in representing internal
and external aspects of the organism, valuing alternative behavioural options, and
selecting motor actions based on these valuations (Ramsøy & Skov, 2010; Rangel et
al., 2008).
44

In comparison to Neuroscience, Neuroeconomics takes a closer look at the brain’s

computations towards a decision. This means, researchers look at cognitive and
emotional elements during the choice process (Ramsøy & Skov, 2010). Although
Behavioural Economics does not directly analyse the brain as the neuroscientific
fields do, it is also involved in the research about human behaviour and decision
making. Scientists that do research about decision making from a Behavioural
Economics perspective look at the psychological components when someone forms
a decision. Most often, they take a closer look at irrational behaviour and especially
mental shortcuts such as biases and heuristics during the process (Camerer et al.,
2011). Therefore, behavioural economists use System 1 and System 2, i.e. fast
thinking and slow thinking, to better distinguish between irrational and rational
decision-making processes (Kahneman, 2011).
Korteling et al (2018) describe how humans “rely on conclusions that are based on
limited amounts of readily available information rather than on larger bodies of less
consistent data” when making a decision (Korteling, Brouwer, & Toet, 2018) p.7).
For Martin Skov, neuroscientist in Copenhagen, decision making “[...] is something
the brain is engaged in, which requires inputs from multiple different neural systems”
(Appendix B).
This statement is in line with Plassmann et al’s (2012) consumer decision making
framework, as seen in chapter 2.6, Figure 3 (Plassmann et al., 2012). In the first step
of the framework, Representation and Attention (1), the frontal lobe and primary
visual cortex are activated before the striatum becomes active, as the centre for
processing predicted value. Skov states that the most important neural system for
decision making is the reward system. It drives many kinds of decision making
processes and is “built on the generation of emotional states that could be either
positive or negative” (Appendix B). In the decision making framework, the reward
system is active during the Experienced Value (3) (Plassmann et al., 2012).
According to Kahneman (2011), this is also the most important value for decision
making from a Behavioural Economics perspective (Kahneman, 2011).
Plassmann et al (2012) note that ““Reward processing” seems rather general”, which
requires the student to properly name the active areas of the brain in regards to the
reward system (Plassmann et al., 2012) p.30). In this context, Berns and Ariely
(2010) also raise the question if a neural signal at the time of, or shortly before a
decision serves as a “good predictor of the pleasure or reward at the time of
45

consumption (the ‘experienced utility’)” (Berns & Ariely, 2010) p.285) (Kahneman,
Wakker, & Sarin, 1997).
Many independent studies have shown a correlation between neural activity in
certain areas of the brain and the anticipation of rewarding events (Knutson, Adams,
Fong, & Hommer, 2001; O Doherty, Kringelbach, Rolls, Hornak, & Andrews, 2001;
O'Doherty, Deichmann, Critchley, & Dolan, 2002).
As a disclaimer, it is important to mention here that one of the biggest risks in
Neuromarketing and neuroscientific research is called reverse inference. This will be
analysed and evaluated in more detail in subchapter 4.2. In short words, reverse
inference is the thought that one mental process can be narrowed down to only one
brain area (Plassmann et al., 2012).

Berns and Ariely (2010) have determined moderate to strong evidence (odds 9:1) for
a causal relationship between the reward system and the following neural regions
(Berns & Ariely, 2010). The areas of the brain that have been identified to take part in
processing rewards are the striatum (i.e. part of the unconscious brain), the
ventromedial prefrontal cortex, medial orbitofrontal cortex and anterior cingulate
cortex (i.e. part of the conscious brain) (Erk, Spitzer, Wunderlich, Galley, & Walter,
2002; Knutson et al., 2001; Plassmann et al., 2012).
Martin Skov affirms that the reward system “encompasses both the basal ganglia,
the pallidum and ventral striatum, the nucleus accumbens, the amygdala, the insula,
the ventral medial prefrontal cortex.” (Appendix B).
McClure et al (2004) show the activation of all mentioned areas in their Coca-Cola
vs. Pepsi study while the participants lie in an fMRI machine. They demonstrate that
consumers pick more pleasing stimuli over less pleasing stimuli based on their
assessment and comparison that the most satisfying drink (between Pepsi and
Coca-Cola) is the one that reportedly tastes better.
However, the scientists also acknowledge that there are more stimuli in a real-world
scenario that would be necessary to take into account, as well as other distracting
stimuli (i.e. noise) in the research environment. Martin Skov sums this up as
“depending on whether a stimulus elicits pleasure or elicits pain, fear or disgust, the
brain thinks of the object as either being positive or negative” (Appendix B). So the
reward system is responsible for the incentive salience, i.e. ‘wanting’ of something,
during the decision making process.
46

One question that comes up, especially in Behavioural Economics but also in
academia from neuroscientific fields, is how biases and heuristics, i.e. mental
shortcuts in the consumer brain, affect the decision making process.
Antonio Rangel responds to this question as follows: “A substantial fraction of our
decisions require identifying the outcomes and likelihoods associated with different
options, assigning values to those options, and then comparing them to make a
choice. Each of those steps are associated with computational processes that are
imperfect and can be affected by biases” (Appendix C). In his own words, he
describes the decision making process aligned with Plassmann et al’s (2012)
framework and the different stages of it, starting with Representation & Attention (1),
to Predicted Value (2), Experienced Value (3), Remembered Value (4a) and ending
in Learning (4a) (Plassmann et al., 2012).
During the stage of early attention, one of the first biases (i.e. reducing mental
energy, so instead of using system 2, system 1 takes over), occurs in the form of
salient stimuli. A consumer’s attention is usually more drawn towards certain brands
or options based on the brightness of the packaging, the location of the product in
the upper right visual field, and other cognitive diversions (Durgin, Doyle, & Egan,
2008; Milosavljevic et al., 2012; Plassmann et al., 2012).
Since Tversky and Kahneman published their influential paper in 1974 about
judgement under uncertainty and mental shortcuts during decision making, many
researchers have detected and analysed more heuristics and biases. The Decision
Lab, a behavioural economics research company, lists almost 100 different types of
cognitive biases on their website of which some are now being presented in the
context of Plassmann et al’s (2012) consumer decision framework and their
influence on Neuromarketing (Plassmann et al., 2012; The Decision Lab, 2022).

The Availability heuristic is a well-researched mental shortcut that can occur easily in
the human mind. Antonio Rangel describes it as follows: “In assigning probabilities to
outcomes, we may overestimate the likelihood of outcomes that are very salient but
low probability (e.g., airplane crashes), and this could be worse if experiencing
unrelated anxiety.” (Appendix C).
To stick to Antonio Rangel’s example of the aeroplane crash, an individual that is
about to take a flight and tries to estimate the probability of an accident would
47

employ a mental shortcut by taking the first information that comes to mind. This can
be an article about a crash, including pictures and a catchy headline that results in
overrating the chances of such an incident. Because memories may not be a reliable
model for anticipating future outcomes, the availability heuristic calls into question
the capacity to properly evaluate the probability of particular events (Korteling,
Brouwer, & Toet, 2018).
In the introduction, the student mentions a study of Tversky and Kahneman from
1974 about subjects estimating the higher count of words that begin with the letter K
against words that have a K in the middle. This is another typical example of the
availability heuristic (Tversky & Kahneman, 1974). The availability heuristic occurs
because System 1 is employed to solve the task and used to give a fast and low
resource-requiring answer, instead of System 2. People might see that their fast
estimations of likely outcomes are distorted after further consideration.

Antonio Rangel also mentions the Peak-end rule, that influences consumers in their
decision making. He says that “In evaluating options, we might rely on memories
from previous experiences, but these memories might have biases” (Appendix C).
The Peak-end rule is caused by the representativeness heuristic. This heuristic
illustrates why an experience is recalled only on glimpses of memory that elicit an
emotional reaction, rather than the complete experience. The worth of an individual's
experience is thus dominated by the retained value of such glimpses.
The Peak-end rule describes how humans recall an experience based on their
emotional reaction, especially at peak moments, as well as at the end (Kahneman,
2011). In comparison to the Anchoring bias, the Peak-end rule can be detected
rather easily. Once cognitively aware of it, the individual can actively focus on ending
an event in a positive way, to create positive memories that the mind will activate
when evaluating options. Some marketers create customer experiences that end on
a high note by giving an unexpected little gift at the end of the purchase, or even
simple actions like using the customer’s name, to employ the Peak-end rule to
influence the buying decision (Okeke, 2019).

The Anchoring bias occurs when people are influenced by certain information before
making a decision (Furnham & Boo, 2011). This mental shortcut leads people to
place too much weight on the first piece of information they obtain.
48

The first information is used as an anchor, or reference point for further information.
This can affect judgement and lead to different conclusions. A first explanation to this
distractor in decision making was given by Tversky and Kahneman (1974) that argue
when individuals try to make estimations or forecasts, they start with some initial
value that gets modified from there.
The Anchoring bias arises when the modifications are insufficient and therefore
cause an incorrect decision making (Tversky & Kahneman, 1974). All Stimuli that
enter the nervous system have an impact on the physical-chemical structure,
resulting in new neural connections, even when irrelevant or misleading information
is added (Korteling et al., 2018).
This distortion in decision making can range from simple consumer decisions in a
supermarket to judges that have to decide about a fair prison sentence for convicts.
The studies by Englich and Mussweiler (2001) about judges behaviour and decision
making under the influence of an anchor are now shortly presented:
19 German trial judges were presented to a fictional case of alleged rape, including
material about the penal code, brief descriptions of the incident from each of the
victim, the defendant, the opinion of medicolegal and psycholegal experts, as well as
two witnesses. The anchor was a demand by the attorney of either sentencing the
accused to two months or to 34 months. The study subjects decided if the demand
was too low, too high, or just right. They then said how long they would sentence
someone if they were in charge of the case. The anchor had a significant influence
on the length of the sentence. The judges allocated to the higher anchor handed
down sentences averaging 28.7 months, while those assigned to the lower anchor
handed down sentences averaging 18.78 months (Englich & Mussweiler, 2001).
Englich and Mussweiler (2001) show with their three studies that first, a direct
influence exists; the penal decisions are assimilated to the sentence demanded by
the attorney (i.e. the anchor), second, the impact is independent of the perceived
relevance of the sentencing request, and third, the anchoring bias is independent of
the judge’s experience (Englich & Mussweiler, 2001).
This example shows how much influence biases can have and how they affect even
analytic and rational decision making.
In fact, being aware of the anchor and detecting it cognitively as a bias, can even
reinforce the effect as more anchor-consistent information is provided (The Decision
Lab, 2022; Wilson, T. D., Houston, Etling, & Brekke, 1996).
49

Korteling et al (2018) explain the neurological reason for this kind of bias as “neural
networks are more easily activated by stimulus patterns that are more congruent with
their established connectionist properties or their current status.” (Korteling, Brouwer,
& Toet, 2018) p.6).
In other words, humans tend to identify further information that supports existing
ideas. When the brain processes a stimulus, future encounters of the same stimulus
are handled more rapidly. The neurons in the brain form connections and
associations that the brain goes back to at the next activation of the stimulus (Forster
& Davis, 1984). This is also the case with the confirmation bias. Humans rely and
assign more weight onto data that supports pre-existing beliefs. The mental shortcut
appears in the form of collecting evidence that fits the foregoing assumption and
drawing wrong conclusions as a result from it. Information that is aligned to the
subject’s point of view lets him or her also feel better, because it is confirming their
standpoint.

To give a conclusion and short summary to the question posed in the introduction:
How is human consumer decision making influenced and affected by biases? -
Human thinking is influenced a lot by mental shortcuts.
Tversky and Kahneman have laid the foundation for many behavioural economic
studies that show how biases and heuristics take advantage of the human fast
thinking, i.e. System 1, in many decision-making processes. Especially moments that
require quick decisions or have an overload of information (as happening in many
purchase situations) are prime to fall victim to heuristic decision making (Kahneman,
2011) (Yoon et al., 2012).
Some researchers argue that the human brain is not designed for making decisions
that require the mental energy of System 2 all the time. From an evolutionary
perspective, the “functioning of biological neural networks (‘System 1’ or ‘Type 1’
processing) [...] originally developed to perform more basic physical, perceptual, and
motor functions.” (Korteling et al., 2018) p.8).
Ramsøy et al (2012) also argue that contextual factors play a huge role in
preferences and decisions and therefore rational behaviour is limited (Ramsøy et al.,
2012).
These contextual factors are also difficult to include in clinical studies about
consumer behaviour and decision making.
50

It also opens the question whether human decision making can be considered as
either rational or irrational. Behavioural Economics researchers and Richard Thaler,
Nobel Prize laureate in 2011, at the forefront, argue that people are predictably
irrational. Thaler is most known for his work on the nudge theory (Thaler & Sunstein,
2008), which the student explains in further detail in the discussion. As this is a
fundamental question of rational or irrational human behaviour and work for future
research, the student closes this question in relation to this paper by citing
neuroscientist Martin Skov from the interview: “I think bias itself as a term is
something that’s related to the idea of irrationality” (Appendix B). However, he also
mentions that in his perspective, biases depend on experience and the
accompanying stimulus are built into the reward system due to learning. This is also
in line with Plassmann et al’s (2012) decision framework where learning (4b) and
experienced value (3) are interconnected (Plassmann et al., 2012).
The next subchapter analyses the role and effect of Neuromarketing, with a closer
look into the commercial application of Neuroscientific techniques for Marketing
reasons.

4.2 Intention and Effect of Neuromarketing in Practice

Neuromarketing, its academic classification, its influence from other fields, and its
techniques have already been presented throughout this thesis. It has been
therefore shown that the birth of Neuromarketing is depending on the particular
perspective. It should be therefore understandable that it depends on the particular
perspective to determine the birth of Neuromarketing.
The study of McClure et al (i.e. blind Coca-Cola vs. Pepsi Tasting) in 2004 is seen by
many researchers as the first well-known application of neuroscientific techniques to
understand commercially relevant consumer behaviour on a neurological level that
has also been applied to practice by companies (Lee et al., 2007; McClure et al.,
2004; Murphy et al., 2008; Ramsøy, T. Z. & Skov, 2014).
Since then, Neuromarketing has gained increasing attention by many scholars and
academics, the public and the media, and of course, executives in businesses.
Murphy et al (2008) call this the “Neurohype” and list ten companies that have
specialised in Neuromarketing by 2008 (Murphy et al., 2008). Plassmann et al (2012)
51

show the high rise of Neuromarketing in academic and commercial fields until 2010
with an info-diagram, as seen in figure 4:

Figure 4: Growth of research applying neuroscience to marketing over time Source:

Plassmann et al (2012)

The Neuromarketing Science & Business Association (NMSBA) has 46 members

that are involved in Neuromarketing from over 30 countries. The list includes
laboratories closely linked to Universities, privately held companies, and big research
corporations with up to 44000 employees (NMSBA, ).

The student investigated some of the companies mentioned by Murphy et al in 2008,

current NMSBA members, as well as Thomas Ramsøy’s company Neurons. The
following paragraphs give a summary of a selection of companies and their business
models, including the development over the last years, whenever publicly available.
This is intended to give the reader an idea of the bandwidth of the Neuromarketing
market. Niklas uses academic and peer-reviewed sources wherever possible. As a
note, some of the now presented information about the companies does not have
reliable, objectively confirmed sources, also due to the fact that some companies do
not exist anymore, and neither do their websites and other platforms. The following
ten companies have been chosen as a cross section of different companies;
successful, bankrupt, or accused of fraud, also for a later evaluation of requirements
for proper neuroscientific research, which is applicable for commercial practice.
52

EmSense was a commercial neuroscience company, founded in 2004 by a spin-off

of seven researchers from MIT (Massachusetts Institute of Technology). The
company collaborated with Microsoft for their Xbox and Coca-Cola to choose the
right SuperBowl Ads with the help of their own invention, a special EEG that also
promised to measure breathing, head movements, pulse and the skin temperature.
According to Roger Dooley, researcher and author of popular-science
Neuromarketing books, the company ran out of business around 2011, unable to
attract more investors (Burkitt, 2009; Dooley, ). Their website seems to be currently
offline.

There is very little public information about Lucid Systems, other than it is or was a
Neuromarketing company from California in the US that promised to deliver
“unimpeachable scientific data—telling you not what people say about your products,
but what they truly think about them” (Abi-Rached, 2008) p.1160). This information
stems from an article published in a peer-reviewed scientific journal, citing the
website at that time. Although the website still exists in 2022, there is no information
about the company, its activities or even its legal status. The website is empty except
for a contact formular for “business inquiries” (Lucid Systems, ). Based on articles in
newspapers from 2008 to 2010, Lucid Systems was involved in monitoring voter’s
brain activities via an EEG to monitor emotional responses and predict behaviour
(abc News, 2009; Honan, 2009).

Nielsen Holdings is a conglomerate of several companies with in total over 44000

employees, all operating under the Nielsen name. NielsenIQ forms part of the
NMSBA and has, according to the NMSBA website, offices in France, Germany,
India, Italy, Mexico, the UK, and the US (NMSBA, ). Nielsen IQ combines
neuroscientific research with traditional market research (NielsenIQ, ). Despite its
size, there is limited public information on current work of the company, apart from
the fact that it consults clients, including companies from the Fortune 500 list, on
consumer decision making with the help of consumer intelligence. On LinkedIn, this
company has almost 450000 followers and over 14000 employees at the time of this
thesis (LinkedIn, ).

NeuroFocus is the name of the next company, mentioned by Murphy et al (2008) in

their paper Neuroethics of Marketing, published in the journal of Consumer
53

Behaviour (Murphy et al., 2008). NeuroFocus was founded in 2005 in California, US

and acquired by Nielsen Holdings in 2011. By that time NeuroFocus was subjectively
the industry leader, as stated by Penenberg (2011) in an article at Fast Company
magazine, a news outlet for business media (Penenberg, 2011). NeuroFocus has
been working with companies such as Hyundai, Google, Walt Disney Co., and
PepsiCo. Neurofocus analysed consumer’s reactions to a Cheetos (i.e. an American
crisps brand by PepsiCo) advertisement that showed an immoral prank. Although
consumers reacted unfavourably towards the ad in a focus group, EEG tests on the
same participants revealed that they found pleasure in seeing the prank of how a
woman puts orange cheetos in another washer at a laundromat, implying an orange
colouration of the laundry (Burkitt, 2009). Although the list of well-known industry
names that partnered with NeuroFocus seem to speak in favour of the company, all
found information is quite old and even on the website of Nielsen, the owner of
Neurofocus, searching for ‘Neuromarketing’ only showed three results, from 2011,
2012 and 2017.

Another company that Murphy et al (2008) mention is Neuroco (Murphy et al.,

2008). The company was founded in London in 2005, utilising EEG technology to
study design, packaging and shopper behaviour of Fast Moving Consumer Goods.
Neuroco was acquired by NeuroFocus in 2009 (Crunchbase, ). Despite intense
research, no more information was found about Neuroco, its business model or
details about the acquisition.

Sands Research is a Neuromarketing company, founded in 2008 by Stephen Sands

an Adjunct Professor in the department of Electrical Engineering and Computer
Engineering at the University of Texas at El Paso and Ron Wright (Sands, ). The
company has around ten employees. Based on the running website of the company,
their activities focus on applied neuroscience for customers, manufacturing and
sales of neurophysiological equipment such as caps, gel and amplifiers for EEG, and
a patent pending software called ‘Neuromedia’ to analyse group engagement and
emotions via media (Sands Research, ).

NeuroSense Limited was established in 1999 in the United Kingdom as one of the
earliest Neuromarketing agencies before the spike in 2004. In a 2004 article
published in nature neuroscience, a peer-reviewed journal by Springer, the chairman
54

Michael Brammer defended his company against allegations of conducting unethical

and unscientific research for commercial exploitation. The accusations were formed
by other researchers and published in Nature, Science, Nature Neuroscience and
other academic journals (Brammer, 2004). The company was later acquired by
Truthsayers, a British enterprise that sells SaaS-based technology with a
neuroscientific background to measure and analyse employers and their satisfaction
levels (Truthsayers, ).

OTOInsights, or also ‘One to One Interactive’ was a company, founded in 2002, that
tried to become the leading human experience firm. A company presentation from
2012 shows that they had offices in Boston, Baltimore, Salt Lake City, Reno-Tahoe,
London and Singapore with over 140 employees and clients such as DIAGEO,
Mercedes-Benz, Bentley, easyjet, Nokia, and even Greenpeace (Slideshare, ). The
company advertised its Neuromarketing research by using EEG as well as a vest,
equipped with sensors to measure different body functions. The company filed for
bankruptcy in 2010, also due to internal disputes (Justia, ). All of their former website
domains are for sale by domain sellers.

Neurons is a Danish Neuromarketing agency, founded by Thomas Ramsøy who is a

professor at Copenhagen Business School, author of many of the cited articles in
this research and colleague of Martin Skov. Neurons is an NMSBA member. Apart
from its headquarters in Taastrup, Denmark, the company has offices in the US,
Guatemala, India, Japan, Turkey and Brazil. Among its customers are Nintendo,
Visa, Twitter, IKEA, Coca-Cola, TikTok and Google. Based on their website, Neurons
offers three types of products to its customers: ‘Predict’, ‘Explore’ and ‘Research’.
The first one claims to predict consumer behaviour by offering an AI-powered
heatmap that simulates the user’s attention towards certain objects on a digital
screen with 90% precision. ‘Explore’ lets customers create online panel studies to
analyse customer attention, emotion, and cognition for TV and social media
advertising, or static images. Neurons promises to recruit study subjects based on
the customer’s target group and to deliver insights for customer motivation and
linked behavioural associations based on standardised tests. The last offering from
Neurons is ‘Research’ and ensures to provide real customer responses via EEGs
55

and Eye-trackers. This solution can be applied in stores, homes and on mobile
devices (Neurons, ).

The next company seems to be inactive, as their website is offline. FKF Applied
Research was founded as a lab, closely linked to UCLA (University of California, Los
Angeles) by three partners. One of them is Tom Freedman, who served as senior
advisor to the president during the Clinton administration, and his brother Joshua
Freedman, a psychiatrist, former UCLA neuroscientist and author of books about
emotional intelligence (Wikipedia, 2022a; Wikipedia, 2022b). The company focused
on fMRI scans to study decision making processes and to understand from a
neurological level how the brain responds to leadership qualities. FKF put special
emphasis on political campaigns in the US, to possibly predict voters' choices.
Lindstrøm (2010) describes one of FKF’s studies to analyse public response to
campaign advertisements for the Bush-Kerry presidential campaign in 2004
(Lindstrøm, 2010). These predictions were also published in an opinion-editorial
article in the New York Times, claiming scientific standards by using fMRI. Three
days later, the New York Times published a letter from 17 neuroscientists that
disagreed with the conclusions and questioned the scientific standards (Abi-Rached,
2008).
The research seems to have produced reverse-inferenced results, as the cited lead
researcher for the study, Marco Iacoboni, drew most of his conclusions from the
activation of the amygdala and the as negative perceived reactions to that.
At this point, it makes sense to explain the aforementioned reverse inference with
the direct example of the FKF study. The researchers examined the neurological
reaction of each ten democrats and ten republicans in an fMRI machine by showing
them pictures of the US politicians George Bush, John Kerry, and Ralph Nader
during the 2004 presidential campaign (Kaplan, Freedman, & Iacoboni, 2007).
Statements, such as “greater habituation of amygdala activity during the presentation
of in-group faces, leading to greater amygdala activity over time in response to
out-group faces. This change in amygdala activity may be a correlate of a perceived
threat posed by out-group faces.” (Kaplan et al., 2007) p.56), show the problem of
using a given brain activation for a “one-to-one relationship between the brain activity
and the mental process of such interest”, i.e. reverse inference (Plassmann et al.,
2012) p.22).
56

Martin Skov explains this as follows in the interview, conducted in May 2022: “So I
don't think that anyone today would say that the amygdala complex is specifically
encoding negative emotions or negative effects. In fact, we know that the nuclei are,
you know, little groups of neurons within the amygdala that encode both positive
effect and negative affect and also encode both a positive motivational stance and
negative motivational stance.” (Appendix B).
Berns and Ariely (2010) confirm this view and say that it is not possible to take whole
cognitive processes like decisions and reduce them to “a single area of activation”
(Berns & Ariely, 2010) p.286). Martin Skov explains this further: “So what actually
happens in any concrete situation when you respond to a stimulus is that all these
systems are collectively engaged and probably the actual outcome, whether you, for
instance, find a given object attractive, if you want to acquire it, if you want to spend
money on it, is a result of a coordination of activity, neural activity across all these
neural systems.” (Appendix C).

All of the reviewed information about reverse inference, combined with the
presentation of different Neuromarketing agencies, some successful, some bankrupt,
and some charged with accusations of fraud, let two question from the introduction
come back to mind:

1. What are the requirements to conduct a proper academic and scientific

Neuromarketing research that is also applicable to a commercial scenario?
2. What are the legal and ethical implication of Neuromarketing and what are, or
should be the regulations for practitioners?
The first question is answered in the following paragraphs and also taken into the
discussion chapter. The second question is answered in the next subchapter, 4.3
The View upon Neuromarketing, the attempt to influence Decision Making, and its
Ethical Implication.

One way of understanding the success of some Neuromarketing agencies and the
failure of others is looking at their research methods (as much as publicly available)
and see with what kind of academic and scientific standards they work.
FKF has been a prime example for a research with flaws and noise that influenced
the validity of the studies and hence the reputation of the reliability and seriousness
57

of the company. Ten Neuromarketing companies have been presented in this

chapter, to give the reader a representative overview of the bandwidth of commercial
offers.
Four companies are either listed as bankrupt, have their website offline, are
generally not available anymore, or all former combined (i.e. EmSense, Lucid
Systems, OTOInsights, FKF Applied Research).
Three companies have been acquired or merged with other Consumer Research
companies (i.e. NeuroCo, NeuroFocus, Neurosense).
Three companies are still existing and operate until today:
- Sands Research, which is closely linked to the University of Texas at El Paso.
They also sell EEG equipment to other laboratories;
- NielsenIQ, which forms part of a big corporation for consumer and market
research. They focus on consumer intelligence, but not specifically
Neuromarketing;
- Neurons, the company by Thomas Ramsøy, who sells software to predict
consumer responses and specially designed studies for customers by using
EEG and Eye-tracking (Neurons, ; NielsenIQ, ; Sands Research, ).

By taking a closer look at the offerings of the operating Neuromarketing companies,

it shows that none of them seem to work with fMRI anymore. This has several
reasons.
In the 2000s, fMRI was praised as the best machine to look into the human brain and
see the different areal activations due to the tracked increase in oxygenated blood
(Berns & Ariely, 2010).
However, there are not many fMRI scanners due to the high costs of purchasing and
maintenance, the requirement of having skilled professionals who can use the fMRI,
and the fact that the machines are very big in size. Furthermore, fMRI machines are
a highly artificial test environment, with a lot of loud sounds coming from the scanner,
the requirement to the study subjects of lying completely quiet in a narrow iron tube
and the clinical setting around the machine. All of this is considered to be very noisy,
i.e. “Irrelevant or meaningless data or output occurring along with desired
information” (Merriam Webster, ).
It therefore leads to a different behaviour of the study subjects that would not act the
same way in a real situation, without all the surrounding distractions. As there is a
58

different behaviour, the decision making also changes which leads to a lower validity
of the study or even wrong assumptions and conclusions. Lee, Amir and Ariely
(2009) call this the lack of ‘ecological validity’ which means that a study is not able to
claim that the responses that people give are comparable to choices in a real life
situation (Lee, L., Amir, & Ariely, 2009).

In summary, the first requirement for a neuroscientific research that can be applied
for companies in a realistic commercial scenario is the reduction of artificial noise
and the ecological validity of the study.
Neuromarketing tools that are less invasive and intrusive during tests are EEGs and
Eye-Tracking devices. Due to the technological progress in the last years, these
devices have become smaller and mobile now, i.e. wearable, and have therefore a
better applicability to in-store testing like in supermarkets or other environments
(Gaskin et al., 2017). This is a big aid for reducing noise and impulse distortion. On
top of that, EEGs and Eye-tracking wearables track data also more reliable while
being less expensive to previous models and especially in comparison to fMRI
scanners.
More requirements for valid research which fulfils academic standards and that can
be used for commercial purposes alike are shown in a practical example now.
As a disclaimer, this research was done by Neurons and it was not possible for the
student to confirm its authenticity and reliability, due to the fact that no further
sources were given. The example stems from a case of Neurons in cooperation with
Lowe’s, an American retail and home improvement company, made public in a
Neurons Youtube video from October 2020 where Thomas Ramsøy, CEO and
researcher, explains the study. This is the only publicly available information that was
found, as there are no further sources in the description, nor on the company
website, Google Scholar or the AAU library. The only validity comes from a logical
explanation and the ‘reputation’ of Thomas Ramsøy as a professor at CBS in
Denmark and him being a well known researcher in that field (Ramsøy, T. Z., 2020).

Neurons did a study for Lowe’s in the US to test to what extent consumers, which
are exposed to an ad previously, would change in-store behaviour. To conduct this
experiment, Neurons created three groups of test subjects that were all set up with
Eye Tracking and EEG devices. Eye Tracking to measure the attention and to create
59

a heat map, based on the focus and the time that the subjects spend on one detail in
the store, as seen in figure 5. The EEG measured the emotional responses, such as
motivation.

Figure 5: Eye Tracking & EEG Neuromarketing Study for Lowe’s Source: (Ramsøy,
2020)

All three groups were set up and calibrated in a different room, before going into the
store, while watching different ads. The task was, among other purchases, to buy
some paint for their house. The control group only saw ads without the specific paint
brand that was part of the experiment. The second group saw the ad for the specific
paint brand among others, and the third group had a longer exposure of commercials
for the given paint brand. After the participants went through the store and bought all
required materials for the experiment, they were asked a couple of questions
towards their choices. Although most test subjects remembered seeing an
advertisement about paint, they denied having been influenced by it. However, the
results, as seen in figure 5, show a different result. The groups that were exposed to
the commercial had a stronger attentional response. The EEGs tracked furthermore
an increase in motivational response, in comparison to the control group that stayed
rather neutral.
According to Thomas Ramsøy, the data was analysed and interpreted by
neuroscientists, and denoised, to avoid false assumptions. Unfortunately, he does
60

not specify the analysis of the data and the techniques to do so, nor the denoising
process.

Berns & Ariely (2010) have described some of their ideas about standard criteria for
hiring Neuromarketing companies. They argue that independent of the simplicity of
the study, the sample size should be at least 30, preferably more, to avoid wrong
assumptions based on individual behaviour. The researchers also advise to ask for a
“‘bootstrap’ — for example, testing on a ‘fresh’ subsample of data”, to check the
robustness of data (Berns & Ariely, 2010) p.290). They name some further criterias
which are mostly of specific technological nature and do not apply anymore, due to
the article’s release in 2010 and the technological advances.

Ironically, Dan Ariely, who specifically writes about “the hope and hype of
neuroimaging in business” and “the ethics of Neuromarketing” (Berns & Ariely, 2010)
p.289) has been accused of data fraud and academic misconduct in August 2021
(O'Grady, 2021). He allegedly changed data sets for his studies, one even about
honesty (The Economist, 2021). This behaviour demonstrates the importance of an
analysis and open discussion about morale and ethics in neuroscientific and
behavioural research, not only in this thesis but also on a higher level at universities
and research institutions.

In conclusion, it can be said that there are different requirements for a reliable
commercial application of Neuromarketing. Signs for proper conducting and testing
are:

- The reduction of noise,

- Ecological validity, a control group on top of the study subjects,
- A calibration procedure of the tracking devices,
- Neuroscientists that are able to read out and interpret the data in the right
context,
- The avoidance of reverse inference.

After the presentation of different Neuromarketing agencies, their development and

the deduction of standards for an academic Neuromarketing application, the
previously formulated question about the image and ethical implication of
Neuromarketing is answered in the following chapter.
61

4.3. The View upon Neuromarketing, the attempt to influence Decision Making and
its Ethical Implication

Neuromarketing has created a lot of debates, not only in academic circles but also in
the public media, due to the many promised opportunities,- sometimes serious,
sometimes not. Together with the public attention, the spotlight has also always been
on the ethical and moral implication of applying neuroimaging techniques for a
commercial output.

However, there have been claims about influencing consumer decisions through
conscious or unconscious messages long before the rise of neuroimaging
techniques. One of the best known ‘studies’ that received a lot of attention, not only
by researchers but especially by marketers and the public was in 1957. A marketing
clerk announced that he had increased sales of popcorn and Coca-Cola in a US
cinema by manipulating filmgoers’ minds to consume more. He claimed his success
on flashing short messages, not visible to the human eye, in between the frames of
movies. The signs read ‘Drink Coca-Cola’ and ‘Eat Popcorn’ (Murphy et al., 2008).
This statement sparked a lot of furious and concerned reactions by the public at that
time, drawing parallels to ‘Brave New World’ and ‘1984’. Moore (1982) cites two
articles from The Nation and The New Yorker, saying that this case of subliminal
advertising was ‘‘the most alarming invention since Mr. Gatling invented his gun’’,
and that ‘‘minds had been entered and broken’’ (Moore, 1982) p.38). Without any
scientific proof, neither from the inventor nor from researchers trying to reconstruct
the experiment, this was rapidly debunked as a marketing gag in academic circles.
However, the myth about simple, successful and subconscious consumer priming
lived on for a long time in the public media.

With the beginning of the 2000’s and the advances in technology that let researchers
conduct more studies about the human brain, especially in a consumer context,
these old fears about manipulation, consciously and unconsciously, have come up
again. Especially the hype about the “Buy Button in the Brain” in the early 2000’s
has put new fuel to this decade-old debate (Berns & Ariely, 2010) p.286). The ‘Buy
Button’ was advertised by authors of pseudoscientific and popular scientific authors,
such as Renvoisé & Morin (2007) in their book ‘Neuromarketing - Understanding the
“Buy Buttons” in your Customer’s brain’, Martin Lindstrøm (2010) with his book
62

‘Buyology’ and indirectly by Robert B. Cialdini in ‘Influence’ (Cialdini, 2014;

Lindstrøm, 2010; Renvoisé & Morin, 2007).

This has been scientifically disproven by many researchers by now, foremost

because reducing cognitive purchase decisions to one single area of the brain is a
classic example for the aforementioned reverse inference (Plassmann et al., 2012).
Nevertheless, even well reputed and respected researchers have been tempted, for
different motives, “to provide simplistic answers to what in reality are highly nuanced
questions” regarding possible neurological explanations for consumer behaviour
(Murphy et al., 2008) p.297). Murphy et al (2008) continue to argue about the image
of Neuromarketing. The following paragraphs present the opinion and ideas towards
the ethics of Neuromarketing of some accredited and accepted researchers in the
academic community, including even the written statements of Dan Ariely due to his
ongoing popularity and reach.

Antonio Rangel answers to the question about ethical regulations in an email to the
student by saying ”Same principles as in other domains: consumer protection and
social welfare should drive regulatory decisions. Problems are similar than, with say,
data collection by tech companies.” (Appendix C). Martin Skov goes into the same
direction when being asked in the interview: “There's general data protection laws
that should be applied. So whenever you measure the brain in terms of activity,
certainly there should be rules about how, what kind of information you acquire, how
you use it, how it can be related back to individual brains and so on.” (Appendix B).

Berns & Ariely (2010) represent the opinion that the study subjects have to be
previously informed about the research, and the data should only be applied within
the context of the research (Berns & Ariely, 2010).

Murphy et al (2008) agree with the claim to protect groups and individuals alike, who
might be hurt, harmed, damaged or exploited by Neuromarketing (Murphy et al.,
2008).

There are two specific groups of people that have to be protected. The first group are
the test subjects of the individual neuroscientific studies. Their data has to be
anonymised and the findings should not be applied back specifically to the analysed
subjects. The second group includes all especially vulnerable people, like the
63

psychological or neurological ill, pathological gamblers, drug addicts, and children.

Berns & Ariely (2010) call this the exploitation of “a biological ‘weakness’ that only
exists in some people.” (Berns & Ariely, 2010) p.289).

Furthermore, there should be a “full disclosure of goals, risks, and benefits”,

according to Murphy et al (Murphy et al., 2008) p299). Lee et al (2007) raise the
concern that some people might put too much trust in neuroscience information, as
they do not fully comprehend the given information (Lee et al., 2007). Weisberg and
her team of researchers conducted a study at Yale University in 2008 that shows
people trusting a statement containing a neuroscientific explanation, even when the
information is clearly irrelevant to the argument. They write: “The presence of
neuroscience information may be seen as a strong marker of a good explanation,
regardless of the actual status of that information within the explanation. That is,
something about seeing neuroscience information may encourage people to believe
they have received a scientific explanation when they have not.” (Weisberg, Keil,
Goodstein, Rawson, & Gray, 2008) p.2).

The legal situation for using fMRI scanners in studies, at least in the UK, is summed
up by Michael Brammer (2004), the chairman of NeuroSense at that time. As he is
defending his company and himself against accusations of unethical behaviour, he
argues that there are no machines in the UK, which are free from ethical control and
all experiments with fMRIs, whether commercial or not, must receive ethical approval
(Brammer, 2004). However, the use of fMRIs has been drastically declined, due to
the aforementioned reasons of noisy data and the technological advance of other
neuroscientific tools like EEG and Eye-Tracking.

As some basic principles for ethical standards have been presented now, the student
would like to introduce the reader to the personal opinion of Martin Skov, co-author
of many articles and colleague of Thomas Ramsøy, as well as reputed neuroscientist
himself. This statement is a bit longer and Niklas will elaborate and comment on it in
the discussion chapter. The whole Interview can be read again in Appendix B.

“​​Well, I would just quickly say to you on this topic that for me personally, I do not
believe a lot in Neuromarketing. I could see… I'm sorry… I have to say, I think that a
lot of it is like a kind of intellectual fraud. So, for instance, the idea that there's like a
64

buy button and you can set up a company that can promise to marketers so that you
can design specific marketing actions that will, you know, elicit buyer behaviour. I
think that is baloney. One of the big reasons for this is just said that there's a huge
variation in how individual brains compute hedonic liking for stimulus. So it's
impossible to design anything, any like visual design or a brand or whatever that will
persuade all people that they should like it more or should, you know, be more willing
to buy a specific product.
This is simply not possible.
And for this reason, I also think that the idea that you can sort of describe the brain
as endowed with specific tendencies to do specific things is baloney. I don't believe
in that. I also want to just, you know, suggest another thing to you, which is that what
people do in neuroscience is something that's already being done by marketers
without using fancy technology. So they are already manipulating people just using
words and intuitions about, for instance, if you boost people's mood by showing them
nice pictures, you know, happy children of people laughing, they will eventually like
whatever they see associated with that better. So this is, I think, something that's
already well understood by marketing people. You don't need any scanner to tell you
this. And it is also, I think, simply words to some degree. Otherwise, I don't think
people spend billions of dollars on marketing campaigns. So you might just ask,
should we even allow marketing? I mean, it's certainly a type of manipulation.
However, you come up with your campaigns and what you think is happening in the
brain. So that's sort of my off the cuff remark about this.” (Appendix B).
65

5. Discussion

The statement of Martin Skov about Neuromarketing and its effectiveness is without
a doubt a very honest and strong opinion on many levels. The student would like to
use the discussion chapter as a place to give a chronological account of the
student’s own creation of knowledge and opinion building throughout the writing
process.
Niklas explains the idea behind the thesis, the initial image he had on the topic and
how it shifted over time and with more exposure to the topic, via academic sources,
popular-scientific books, personal statements such as of Martin Skov, statements of
scientists and researchers in conferences, videos, blogs and more. Niklas also
elaborates further on the increasing influence of Behavioural Economics in the
thesis, from the beginning of the writing process until this moment.

Prior to the beginning of this summer semester in 2022, the student was looking for
possible research topics for his master thesis in Marketing at Aalborg University. By
coincidence he stumbled upon a TED Talk on Youtube where Patrick Renvoisé
explained the basic idea of a “Buy Button” inside the brain. Fascinated by the idea,
Niklas started to watch more TED Talks by other speakers about Neuromarketing
and ordered the book of Patrick Renvoisé and Christophe Morin, about
“Understanding the “Buy Buttons” in Your Customer’s Brain” (Renvoisé & Morin,
2007). The initial idea for the thesis was to apply Neuromarketing to a practical
scenario such as the gambling industry. Niklas was in contact with the Gauselmann
group, a German gambling corporation with brands such as Merkur. As the company
could not see a match between a thesis about Neuromarketing and their own
corporate strategy, the student decided to write about Neuromarketing on a more
descriptive level and to discover throughout the writing process of the thesis the
bigger picture of the science of consumer decisions. The first and second draft of the
introduction were still written without much scientific knowledge, but with a huge
personal interest and a fascination with the idea of a “Buy Button” in the brain. After
reading further popular scientific literature such as “Buyology” by Martin Lindstrøm
(Lindstrøm, 2010) and “Influence” by Robert P. Cialdini (Cialdini, 2014), the student
was disillusioned and questioned the effectiveness of Neuromarketing for the first
time. At that time, Niklas enrolled in an online course about Neuromarketing at
66

coursera, an open online course provider. The lecturing professor was Thomas
Ramsøy, recorded from the premises at Copenhagen Business School. The student
got influenced by that course and especially the provided compendium of scientific,
peer-reviewed literature and started to get an idea on what Neuromarketing is, i.e. on
what other fields and influences it is founded. At the same time, Niklas started
reading more of the book “Thinking, Fast and Slow” (Kahneman, 2011). The four
proposed research questions were Niklas honest questions and at the same time the
guideline, to approach the topic of consumer decisions from a neuroscientific
background. During the assembly of the theoretical background, the student first
started to understand the huge bandwidth of Neuromarketing and that he could only
scratch on the surface of many interesting topics due to the sheer size and depth of
all the related scientific fields. The decision making process and particularly the way
that marketers could influence this process ignited Niklas huge personal interest
again. Especially heuristics, biases and mental shortcuts seemed to be an
interesting topic, as they inflict with rational decision making. As the student had
already decided to write a thesis about Neuromarketing and the neuronal processes
in the brain, the theoretical background introduces Behavioural Economics just as
one of the influences for Neuromarketing. However, due to the personal
development of Niklas opinion about Neuromarketing and further supported by the
revelations of Martin Skov in the interview, Niklas started to have an increasing
interest in the psychological factors and less in the neurological interpretation of
decision making processes.
The analysis chapter is the attempt to reconcile Neuromarketing with Behavioural
Economics, based on the same focus of understanding and influencing a consumer
decision.
While analysing the different Neuromarketing companies, it showed that there are a
lot of fraudulent offers in the market, just as Martin Skov says in the interview with
the student. Even well-known researchers such as Dan Ariely have been accused of
fraud and having worked closely with the white house like Tom Freedman from FKF
is also no guarantee for a flawless and accurate practice.

This leads to the question if Neuromarketing really is ‘baloney’?

The conclusion for Niklas is not completely clear and definitely ambivalent. In
general, the student does not see a higher success-rate with Neuromarketing than
67

with traditional Marketing approaches. This is in line with Martin Skov’s statement.
However, Neuroscientific consumer research can do important fundamental
research. One example is a study by Knutson et al (2007) that shows via fMRI scans
how a choice in the human brain is done 8-12 seconds before the person is
consciously aware of it (Knutson, Rick, Wimmer, Prelec, & Loewenstein, 2007).
Nevertheless, taking these basic studies and exploiting them commercially, just with
a minor calibration for the exact business case does not seem to make
Neuromarketing companies automatically successful. The presentation of ten
companies from that field have shown how much Marketing and how little
Neuroscience some contain.
On the other hand, the student also introduced Behavioural Economic research,
such as biases and heuristics. The student is of the opinion that insights and
empirical tests in the psychological field of Behavioural Economics are not only
valuable basic research, but also better applicable in commercial environments.
A good example for this is provided by Richard Thaler, beside Daniel Kahneman one
of the other five Nobel laureates within Behavioural Economics (The Nobel Prize, ).

Thaler is most known for the nudge theory, a concept to take advantage of
judgemental heuristics of people. A nudge, i.e. an asymmetric intervention, should
“motivate choices with positive environmental outcomes” via heuristics, so whenever
the fast thinking System 1 is used (Campbell-Arvai, Arvai, & Kalof, 2014) p.453). As
decision making often happens in situations that require a quick choice due to time
pressure, an overload of information, and cognitive capacity limitations, consumers
often choose suboptimal outcomes (Yoon et al., 2012).
The idea behind nudging is that whenever a choice has to be made, as for example
in a cafeteria between different food options, judgemental heuristics can be used to
guide the decision maker towards a choice with a positive outcome. Thaler &
Sunstein (2008) explain the cafeteria example in their book as follows: The cafeteria
has to decide over a structure or layout in which they organise the food. The
responsible person for such a plan is called a ‘Choice Architect’. A choice architect
has the responsibility for organising the context in which people make decisions, as
to what kind of food the cafeteria customers are exposed to first upon entering. As a
choice between food is inevitable for a hungry customer in that scenario, Thaler &
Sunstein (2008) raise the question why the choice architecture should not lead to a
68

good decision making (Thaler & Sunstein, 2008). They make the case that installing
a salad bar at the entrance and moving the unhealthy food options such as junk food
to a less visible area guides, i.e. nudges, people towards the healthier option.
However, it is important to point out the freedom of choice by the customer between
healthy or unhealthy food. The junk food is not banned from the cafeteria and
customers can avoid the positive nudge by just walking around the salad bar.
Nudges are therefore not mandated. Campbell-Arvai et al (2014) have tested
Thaler’s & Sunstein’s (2008) assumptions about healthy and sustainable food
choices in a real life study at a campus cafeteria at an American university. In their
study they try to nudge cafeteria visitors towards a vegetarian food choice. Their
findings show “a significant influence on participants’s choice of a meat-free menu
option” and conform to Thaler & Sunstein’s (2008) theory (Campbell-Arvai et al.,
2014) p.465). Another well-known example for the effectiveness of a nudge are the
installations of a fly-image in the urinals at Schiphol Airport in Amsterdam. The
airport staff found that “etchings reduce spillage by 80 percent” in comparison to
urinals without a printed fly for which men can aim at (Thaler & Sunstein, 2008) p.9).

Because of the aforementioned examples and further studies which are not
displayed and elaborated here due to the limited size of the thesis, the student sees
more commercial potential in Behavioural Economical techniques than in
Neuromarketing. As Martin Skov describes it, every kind of Marketing, whether on a
psychological or on a neurological level tries to manipulate, i.e. influence the
consumer in its opinion (Appendix B). Based on the gathered information throughout
the process of conducting this thesis, the student does not see the superiority of
Neuromarketing techniques for a broad consumer audience. Nevertheless,
consumer scientific research on the basis of behavioural economic models, such as
the different biases, combined with EEG and Eye-tracking might be interesting in the
future, especially as technological advances allow more and more real-life and
instant cognitive tracking.
Future applications might include virtual reality (VR) technology for example, to test
and adjust situations that are prime to judgements under uncertainty. Attention
towards food choices in a virtual cafeteria or a supermarket could be measured with
the help of VR glasses and the environment could be adapted to different scenarios
without the real cost and time of rearranging the test area.
69

6. Conclusion

This thesis tries to give the reader an overview of Neuromarketing and its techniques
under the light of consumer decision making. In addition to Neuromarketing
literature, the student also presents a first introduction into Behavioural Economics
and the psychological view on consumer behaviour. Both fields are intertwined,
together with further academic fields such as Neuroeconomics. Consumer decision
making can be explained in many ways, depending on the specific view and
research angle. This thesis is an attempt to show different decision making research
and examples from studies, combined with an analysis of commercial applicability of
Neuromarketing and Behavioural Economic concepts.
The student raises four questions in the introduction that are investigated throughout
the chapter of the paper.
The first question regards theoretical and practical Neuromarketing methods and
their functionality. The student presents the theoretical Consumer Decision Making
Framework by Plassmann et al (2012), and fMRI, EEG and Eye Tracking as practical
tools and techniques. This is further supplemented by Behavioural Economic theory
such as heuristics and biases. fMRI scans are most often not anymore applied in
consumer research, due to the distracting stimuli and a different consumer
behaviour. EEG and Eye Tracking have been further developed and are applied in
neuroscientific consumer research, due to their better mobility, decreased costs and
higher reliability. Heuristics and biases describe consumer behaviour from a
psychological standpoint and have been proven in empirical studies. One practical
application from it is nudging people towards a decision outcome by taking
advantage of mental shortcuts.
The second question concerns the different requirements for a reliable commercial
application of consumer based neuroscientific research. By showcasing ten
Neuromarketing companies, their services and development since the 2000’s, the
student deduced the following signs for legitimate conducting and testing: A
reduction of noise, ecological validity, control groups, proper calibration of test
devices, employment of experts and the prevention of reverse inferences results.
In answering the third research question about the ethical implication of
Neuromarketing, Niklas identifies some popular myths about the effectiveness of
70

Neuromarketing, proposals of ethical standards by researchers and their own

shortcomings sometimes.
The fourth question about the influence and effect of biases is answered by a
presentation of common heuristics and mental shortcuts and how the human mind
prefers employing System 1, as the fast thinking entity.
In conclusion, it can be said that Neuromarketing is a very interesting field of
research, especially when taking the bigger picture of behavioural decision making
into account. There are certain limitations to the commercial exploitation of
Neuromarketing as mentioned before. However, future developments in technology
like virtual reality might require a new evaluation of consumer based neuroscientific
research.
71

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