Neuroeconomics

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Neuroeconomics combines psychology, economics, and neuroscience, to study how people make decisions. It looks at the role of the brain when we evaluate decisions, categorize risks and rewards, and interact with each other.[1][2] It can be included in the field of social neuroscience.

Methodology

Behavioral economics experiments record the subject's decision over various design parameters and use the data to generate formal models that predict performance. Neuroeconomics extends this approach by adding observation of the nervous system to the set of explanatory variables.

Neural recording techniques

In neuroeconomic experiments, brain scans can be performed using fMRI, PET or other functional neuroimaging tools in order to compare the roles of the different brain areas that contribute to economic decision-making.[1] Other experiments measure ERP (event-related potentials, or use EEG) and MEG (magnetoencephalograms) to measure the timecourses of different brain events.[1] Direct recordings of neurons activities and neurotransmitter concentrations in monkeys and seldom in humans can also be carried out.

In addition, knowledge of brain activity can invite causal experiments in which choices are actually influenced by exogeneous causal manipulations. (This is important from the point of view of standard economic theory, because in standard theory choices only change when preferences, income, prices, or information change; so any other variable which influences choice must be interpreted in those terms.) For example, TMS (transcranial magnetic stimulation), lesions to brain areas ("the lesion method"), pharmacological interventions, and simpler exogeneous variations like cognitive load and priming can all potentially influence choices. [CCamerer]

Experiments

In a typical behavioral economics experiment, a subject is asked to make a series of economic decisions. For example, a subject may be asked whether they prefer to have 45 cents or a gamble with a 50% chance of one dollar and 50% chance of nothing. The experimenter will then measure different variables in order to determine what is going on in the subject's brain as they make the decision.

Neuroeconomic Programs

Neuroeconomics has developed into an up and coming field in graduate studies. Several universities are conducting direct research on the field, such as New York University, Duke University, and George Mason University.[3] Furthermore, some programs actually offer a degree in Neuroeconomics. Claremont Graduate University is the first institution to offer a PhD in Neuroeconomics; it is ranked as one of the best Neuroeconomics institutes in the United States.[4] Caltech now (c 2007) has a Behavioral and Social Neuroscience (BSN) PhD in either CNS or HSS [5], mixing economic theory, neurobiology, computational neuroscience,dynamic causal modeling and neuroscientific techniques. [CCamerer]

Criticism

Different experts have criticized the emerging field. Example of critics have been that it is "a field that oversells itself";[6] or that neuroeconomic studies "misunderstand and underestimate traditional economic models".[7]

Neuromarketing

Neuromarketing is a distinct discipline closely related to neuroeconomics. While neuroeconomics has more academic aims, since it studies the basic mechanisms of decision-making, neuromarketing is an applied field which uses neuroimaging tools for market investigations.[8][9]

See also

References

  1. ^ a b c Kenning P, Plassmann H (2005). "Neuroeconomics: an overview from an economic perspective". Brain Res. Bull. 67 (5): 343–54. doi:10.1016/j.brainresbull.2005.07.006. PMID 16216680. {{cite journal}}: Unknown parameter |month= ignored (help)
  2. ^ John Dickhaut and Aldo Rustichini (2008). "neuroeconomics," The New Palgrave Dictionary of Economics, 2nd Edition. Abstract.
  3. ^ https://files.nyu.edu/avs265/public/whatisneuroeconomics.html?
  4. ^ https://files.nyu.edu/avs265/public/reviewofneuroeconomicprograms.html?
  5. ^ http://www.hss.caltech.edu/ss/postdocs?
  6. ^ Rubinstein, Ariel (2006). "Discussion of "behavioral economics": "Behavioral economics" (Colin Camerer) and "Incentives and self-control" (Ted O'Donoghue and Matthew Rabin)". In Persson, Torsten; Blundell, Richard; Newey, Whitney K. (ed.). Advances in economics and econometrics: theory and applications, ninth World Congress. Cambridge, UK: Cambridge University Press. ISBN 0-521-87153-0. Retrieved 2010-01-01.{{cite book}}: CS1 maint: multiple names: editors list (link)
  7. ^ Gul, Faruk; Pesendorfer, Wolfgang (2008). "A Case for Mindless Economics". In Schotter, Andrew; Caplin, Andrew (ed.). The Foundations of Positive and Normative Economics: A Handbook (Handbooks in Economic Methodologies). Oxford University Press, USA. pp. 3–42. ISBN 0-19-532831-0. Retrieved 2009-03-04.{{cite book}}: CS1 maint: multiple names: authors list (link)
  8. ^ Paul W. Glimcher (2008). "Neuroeconomics - Scholarpedia". 3(10):1759, revision #50592. Retrieved 2009-03-04.
  9. ^ Lee N, Broderick AJ, Chamberlain L (2007). "What is "neuromarketing"? A discussion and agenda for future research". Int J Psychophysiol. 63 (2): 199–204. doi:10.1016/j.ijpsycho.2006.03.007. PMID 16769143. {{cite journal}}: Unknown parameter |month= ignored (help)CS1 maint: multiple names: authors list (link)

Further reading

  • David Krueger (2009) The Secret Language of Money, McGraw-Hill Professional. ISBN 978-0-07-162339-1

Journal

Journal of Neuroscience, Psychology, and Economics

External links

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