Neuroeconomics
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2008-05-23T03:48:20Z
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'''Neuroeconomics''' combines [[neuroscience]], [[economics]], and [[psychology]] 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.
==Neuroeconomics & neuroscience==
Neuroscience studies the nervous system, with broad areas such as the senses, movement, and internal regulation. Neuroeconomics is the subset that focuses on high-level concepts of personal choices and decisions, and how these are represented using our [[neuron]]s and neuronal networks.
==Neuroeconomics & economics==
[[Economics]] studies choices and decisions, with broad areas such as [[macroeconomics]] for large groups and [[microeconomics]] for [[individual]]s. Neuroeconomics is the subset that focuses on personal choices and the [[mind|mental]] changes that correlate with the choices and may even cause them. A key insight is that the biological substance of a living organism can be modeled as implementing an optimizing solution to some survival/reproductive challenge in the evolutionary environment.
==Neuroeconomics & business research==
Neuroeconomics also incorporates aspects of business research (e.g., consumer neuroscience, neurofinance, organizational decision making).
==Neuroeconomics & psychology==
Psychology studies [[thought]] and [[perception]], with broad areas such as [[language]], [[cognition]], [[memory]], [[group psychology]] and [[abnormal psychology]]. Neuroeconomics is the subset that focuses on thought about our choices, especially the cognition that happens when we understand our options and then choose one.
Neuroeconomics findings tend to confirm that [[emotion]]s (among them [[hope and fear]]) are important factors in many economic choices.
==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. The simplest experiments record the subject's decision over various different design parameters (what about 42 cents?), and use the data to generate formal models that predict performance. This is the type of experiment for which [[Daniel Kahneman]] won the Nobel Prize in Economics.
Neuroeconomics extends the approach of behavioral economics by adding observation of the nervous system to the set of explanatory variables.
In neuroeconomic experiments, full brain scans will be performed using [[fMRI]] or [[Positron Emission Tomography|PET]] in order to compare the roles of the different brain areas that contribute to economic decision-making. Other experiments measure ERP ([[event-related potential]]s, which are closely related to [[Electroencephalography|EEG]]), and MEG ([[magnetoencephalograms]]) to measure the timecourses of different brain events that contribute to economic [[decision making]].
The most complicated experiments involve direct recordings of neurons (and sometimes [[neurotransmitter]] concentrations) in monkeys and humans.
==Criticisms==
A prominent critic of Neuroeconomics is [[Ariel Rubinstein]]. In the world congress of the Econometric Society in 2005 he referred to Neuroeconomics as "a field that oversells itself" (see [http://arielrubinstein.tau.ac.il/papers/behavioral-economics.pdf Rubinstein (2006)]).
Gul and Pesendorfer (2005) have argued that the methodology of neuroeconomics answers irrelevant questions, in that it concentrates on what provides the most hedonic satisfaction to experimental subjects rather than what economic outcome those subjects choose out of multiple options. However, neuroeconomic research has been able to provide more insight into some behavior that could not be adequately explained by other methods. [http://www.sciencemag.org/cgi/content/full/318/5850/598]
==Ramifications==
Neuroeconomics, although a relatively recent approach to biology and human behavior, shows promise of contributing to knowledge in a wide range of areas. Neuroeconomic approaches have already been applied to issues as diverse as proving guilt beyond a reasonable doubt (no reference) and analyzing communications services demand [http://www.galbithink.org/lessmore.htm].
Some consider that neuroeconomics could be a new source of manipulative tools for advertisers to influence buying decisions, and that consumers should be taught to identify them.
==See also==
* [[Neuromarketing]]
* [[Behavioral economics]]
* [[Colin Camerer]]
* [[David Laibson]]
* [[Kevin McCabe]]
* [[Ernst Fehr]]
* [[Paul J. Zak]]
==References==
* Deppe M; Schwindt W; Pieper A; Kugel H; Plassmann H; Kenning P; Deppe K; Ringelstein EB; [http://www.ncbi.nlm.nih.gov/entrez/query.fcgi?db=pubmed&cmd=Retrieve&dopt=AbstractPlus&list_uids=17589310&query_hl=1&itool=pubmed_docsum "Anterior cingulate reflects susceptibility to framing during attractiveness evaluation."] Neuroreport; July 2007; 18 (11) : 1119-23.
* Deppe M; Schwindt W; Kugel H; Plassmann H; Kenning P: [http://www.ncbi.nlm.nih.gov/entrez/query.fcgi?db=pubmed&cmd=Retrieve&dopt=AbstractPlus&list_uids=15746230&query_hl=1&itool=pubmed_docsum "Nonlinear responses within the medial prefrontal cortex reveal when specific implicit information influences economic decision making."] J Neuroimaging; April 2005; 15(2):171-82.
* Deppe M; Schwindt W; Krämer J; Kugel H; Plassmann H; Kenning P; Ringelstein EB; [http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6SYT-4GPVP90-2&_user=10&_coverDate=11%2F15%2F2005&_rdoc=11&_fmt=summary&_orig=browse&_srch=doc-info(%23toc%234843%232005%23999329994%23607715%23FLA%23display%23Volume)&_cdi=4843&_sort=d&_docanchor=&view=c&_ct=14&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=ff1e9fe4e4a991380bdbb1b0e1fffea3 "Evidence for a neural correlate of a framing effect: bias-specific activity in the ventromedial prefrontal cortex during credibility judgments."] Brain Res Bull; November 2005; 67(5):413-21.
* [[Peter Kenning]], [[Hilke Plassmann]], [http://www.sciencedirect.com/science?_ob=PublicationURL&_tockey=%23TOC%234843%232005%23999329994%23607715%23FLA%23&_cdi=4843&_pubType=J&view=c&_auth=y&_acct=C000056461&_version=1&_urlVersion=0&_userid=2160112&md5=a75a047f0fa438ca8492757f51e0dcec "Brain Research Bulletin - Special Issue on NeuroEconomics"], 2005
* [[Peter Kenning]], [[Hilke Plassmann]], [http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6SYT-4GVH2G9-1&_user=2160112&_coverDate=11%2F15%2F2005&_rdoc=3&_fmt=summary&_orig=browse&_srch=doc-info(%23toc%234843%232005%23999329994%23607715%23FLA%23display%23Volume)&_cdi=4843&_sort=d&_docanchor=&view=c&_ct=14&_acct=C000056461&_version=1&_urlVersion=0&_userid=2160112&md5=ce82470e4203e644bcc71c0719987826 "NeuroEconomics: An overview from an economic perspective"], 2005
* [[Paul Glimcher]], ''Decisions, Uncertainty, and the Brain: The Science of Neuroeconomics'', [[MIT Press]], 2003.
* [[Colin Camerer]], [[George Loewenstein]], [[Drazen Prelec]], [http://www.hss.caltech.edu/~camerer/JELfinal.pdf "Neuroeconomics: How neuroscience can inform economics"], ''[[Journal of Economic Literature]]'', 2005
* [[Paul J. Zak]], [[Robert Kurzban]] and [[William T. Matzner]], [http://www.pauljzak.com/index.php?page=published "The Neurobiology of Trust"], ''[[ANN. N.Y. ACAD. SCI.]]'', 1032:224–227 (2004).
* Michael Kosfeld, Markus Heinrichs, Paul J. Zak, Urs Fischbacher, & Ernst Fehr. ''Oxytocin Increases Trust In Humans'', ''[[Nature (journal)|Nature]], 435:473–476, 2005 June 2nd.
* [[Paul J. Zak]], Robert Kurzban, and William T. Matzner. "Oxytocin is Associated with Human Trustworthiness", ''[[Hormones and Behavior]]'', 48, 522 –527, 2005.
* John Cassidy, [http://www.newyorker.com/fact/content/articles/060918fa_fact "Mind Games. What neuroeconomics tells us about money and the brain"], ''[[The New Yorker|New Yorker]], 2006 September.
* [[Faruk Gul]], [[Wolfgang Pesendorfer]], [http://www.princeton.edu/~pesendor/mindless.pdf "The Case for Mindless Economics"], 2005
* [[Ariel Rubinstein]] [http://arielrubinstein.tau.ac.il/papers/behavioral-economics.pdf ''Comments on Behavioral Economics''], in Advances in Economic Theory (2005 World Congress of the Econometric Society), Edited by R. Blundell, W.K. Newey and T. Persson, Cambridge University Press, 2006, vol II, 246-254.
* Hardy-Vallée, B. (forthcoming). [http://decisis.net/files/papers/hardy2007compass_neuroeconomics.pdf "Decision-making: a neuroeconomic perspective"]. Philosophy Compass.
*[[Zak, Paul J.]], Stanton, Angela A., Ahmadi, Sheila, [http://www.plosone.org/article/info%3Adoi%2F10.1371%2Fjournal.pone.0001128;jsessionid=C12706C1A789233D0F59DDFE31C5FD25 "Oxytocin Increases Generosity in Humans"], ''[[PloS One]]'', 2(11); e1128, November 7, 2007
* Sanfey, Alan G. "[http://www.sciencemag.org/cgi/content/full/318/5850/598 Social Decision-Making]: Insights from Game Theory and Neuroscience" [http://www.sciencemag.org/ Science Magazine.] October 2007. American Association for the Advancement of Science.
==External links==
===Centers & Organizations===
* [http://www.neuroconsult.at Applied Neuroscience, Austria]
* [http://www.jnpe.org/ Association for NeuroPsychoEconomics]
* [http://www.neuroeconomics.net/ Center for the Study of Neuroeconomics] @ [[George Mason University]]
* [http://www.neuroeconomicresearch.org Center for Neuroeconomic Research, University of South Carolina]
* [http://www.neuroeconomicstudies.org Center for Neuroeconomics Studies]
* [http://www.jnpe.org/e_jnpe.html Journal of Neuroscience, Psychology, and Economics - A new journal in the field]
* [http://www.neuroeconomics-bonn.org Neuroeconomics Lab Bonn]
* [http://www.neuropsychoeconomics.org/ NeuroPsychoEconomics - Das deutsche Neuroökonomie-Journal]
* [http://www.neuroeconomics.de/ Muenster Research Group on Neuroeconomics]
* [http://www.martinreimann.com/noe/english.html TUM Neuroeconomics College at Technical University of Munich]
* [http://www.neuroeconomics.org/ Society for Neuroeconomics]
* [http://www.neuro-economics.org/ The Camerer Lab at California Institute of Technology]
* [http://www.neuroeconomics.nyu.edu/ Center for Neuroeconomics at New York University]
===Conferences & Publications===
* [http://www.jnpe.org/e_jnpe.html Journal of Neuroscience, Psychology, and Economics - A new journal in the field]
* [http://www.jnpe.org/e_neuroeconomics_publications.html A list of publications on neuroeconomics]
* [http://www.jnpe.org/e_conference.html Annual NeuroPsychoEconomics Conference]
* [http://www.neuropsychoeconomics.org/ NeuroPsychoEconomics - Das deutsche Neuroökonomie-Journal]
* [http://www.connecs.org/ Conference on Neuroeconomics]
== Popular Media ==
* [http://www.thirteen.org/curious/episodes/what-is-neuroeconomics/ "What is Neuroeconomics?"] - broadcast by [[WGBH-TV|WGBH]] and [[PBS]], in the program series "Curious", January 2008.
===Blogs===
* [http://naturalrationality.blogspot.com Neuroeconomics and philosophy Blog]
* [http://cognicionydecision.blogspot.com/ Cognición y Decisión (Decision Making and Neuroeconomics Blog in Spanish)]
[[Category:Applied psychology]]
[[Category:Neuroscience]]
[[Category:Microeconomics]]
[[Category:Experimental economics]]
[[Category:Behavioral finance]]
[[ca:Neuroeconomia]]
[[de:Neuroökonomie]]
[[el:Νευροοικονομικά]]
[[es:Neuroeconomía]]
[[fr:Neuroéconomie]]
[[lt:Neuroekonomika]]
[[ru:Нейроэкономика]]
[[fi:Neurotaloustiede]]
[[vi:Kinh tế thần kinh học]]
[[zh:神经元经济学]]