Neuroeconomics Explained

As Neuroeconomics gets started I've received a lot of email asking for an explanation. So here goes.

Neuroeconomics is an interdisciplinary research program with the goal of building a biological model of decision making in economic environments. Neuroeconomists ask, how does the embodied brain enable the mind (or groups of minds) to make economic decisions? By combining techniques from cognitive neuroscience and experimental economics we can now watch neural activity in real time, observe how this activity depends on the economic environment, and test hypotheses about how the emergent mind makes economic decisions. Neuroeconomics allows us to better understand both the wide range of heterogeneity in human behavior, and the role of institutions as ordered extensions of our minds.

Comments

[Joe Mazur]

I had to post because I am dismayed by those who've said this science will not produce an ounce of human good. They discourage a study they seem not to understand fully. Isn't neuroscience an encompassing term for two starkly different categories? One branch studies the brain's activity while making economic decisions; the other branch studies the "economic decisions" of all the brain's activities.

If I am confused, please let me know.

[Louis]

R.I.P Neuroeconomics,
Wait, whats neuroeconomics?

[Luis Eduardo Pinto]

neuroeconomics is a developing field. It complements foundations of classic economics. Behind decisions human beings are. Economics is not a science about trading process, trust or motivations. Neuroeconomics bring these aspects together and envisions an unified conceptualization for human decision making requiring tha knowledge of mental processs involved. How can we about cars performance ignoring fuel and driver?

[Sathyan David]

What is the difference between neuroeconomics and behavioral economics?

[Hedge Fund]

I think this is very interesting. I'm actually studying psychology of influence and persuasion right now. I don't think there is a direct connection here but I work in the finance industry and I can definately see the advantages of studying neuroeconomics. Congrats on being within an interesting field.

- Richard
Hedge Fund Blog
http://richard-wilson.blogspot.com

[jayray]

I think the study of neuroeconomics sounds fascinating. So much so I might consider it for graduate studies. However, I wanted to comment on something a bit different. Many people complain that students in the US are shameful because they graduate and go through life knowing little about geography, biology, physics, literature, and the like. Judging from many of the postings on this website, one should add economics to the long list. This notion that economics is the study of business is just plain wrong. It is the study of how people interact and how they can manage resources. Like the physical sciences there is both a theoretical side and a technological side. Economics is a science because it searches for the precise reasons for both how and why a market works. For example, a farm is run efficiently for a reason. If you doubt this then you must say it is because of magic that one farm is efficient and another is not. Ultimately, economics MUST be studied as neuroscience because this is where the decisions are made. How did this evolve? How is our economy shaping mental processes today? Is it guiding evolution? Did early markets guide the mental evolution of early hominids? What of the theory of emergence? These are some truly fascinating questions that can be explored as the social sciences find ways to bridge the gap with the hard sciences.