Decisions…Decisions…science behind our blindsides

Based on research in the past decade, the authors believed that an area of the brain located just between the eyebrows, the ventromedial prefrontal cortex, or vmPFC, might be involved. “This area is known to code for any type of subjective value,” explained De Martino. (http://www.biotechniques.com)

HBR and others have published great articles over time on the flaws in our decision making abilities, often associated with biases such as anchoring, framing etc. So, the work by neuroeconomist Benedetto De Martino is an interesting dive into the actual science that wires our brains to be this way.
Our brains our amazingly flexible and subjective which helps us run through multiple complicated decisions all the time. De Martino is looking to help us move away from rational models of economic theory to the more complex model of how we really are.
Applying our own models to the world through our "theory of mind", helps us make sense of and overcome complexity. But it seems like we can also read too much into situations too, like financial bubbles, for the very same reason. Knowing ourselves better and therefore how to apply our minds better, can help us better frame the decision to be made and go into it with eyes wide open.

“People have a very strong tendency to attach intention to anything,” De Martino points out. “Not just about humans, either. We anthropomorphise. We say the gods were angry and that is why the weather is bad. We talk about the market ‘panicking’. So we end up seeing intention where there is no intention. We see a price going up, and we start to think: maybe the other people know more than I do, I should buy.” 

“We are trying to get inference from other minds, even if there aren’t other minds there – just noise,” continues De Martino. “And that is a good example of how difficult it is to define what exactly is rational and what is not rational. For example, we showed that in the context of financial bubbles, having theory of mind makes you worse. It makes you take bad decisions and lose money as a consequence.”
But the ability to read others intentionally doing something wrong, like insider trading, is a definite advantage.

https://www.alumni.cam.ac.uk/sites/www.alumni.cam.ac.uk/files/documents/cam75_online-150dpi.pdf:  We all know that the rational consumer is a fiction. So what does drive our economic behaviour? Dr Benedetto De Martino says the answer lies in our theory of mind
Benedetto De Martino :: Cambridge Neuroscience: This interdisciplinary approach aims to shed light on why human decisions are so often imperfect, helping policymakers and economists in designing new interventions and institutions to improve them.

BioTechniques - Why Do Financial Bubbles Happen?: De Martino cautions that generalizing ToM as disadvantageous in all financial situations would be premature. “It can be good in other things. When people really do know better than you, you can actually predict some relevant information,” he said. “But in the bubble, people don’t have better information; it’s just an illusion. But the brain still uses the same, quite well-developed machinery to check for intentionality.”