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

[norak uong]

Have neuroeconomists developed something that can measure utility? Imagine the possibilities if such a machine were developed.

Your definition as given doesn't cover the study of conventional economic quantities and structures within the neural dynamics of a single isolated brain. Your articles show that your private working definition of "neuroeconomics" does cover that topic, but you should extend the above definition explicitly so the current restricted meaning doesn't get locked in.

A namespace is a vulnerable commons. I actually think the applications of economics within neurology are more interesting than the applications of neurology within economics, and I think it would be worse for the former to get locked out of the meaning of "neuroeconomics" than for this to happen to the latter. Also, you're eventually going to want to have ended up with a word that lets you talk about interactions between the economies inside the brain and those outside.

[Morten Diederich]

What does the emergence of neuroeconomic theories imply for the existing literature on motivation? Does this conflict with e.g. Deci and Ryans concepts of Intrinsic/ Extrinsic motivation?

[Jim Nichols]

I'm sure your work will bring a system of relating to those of us who are accused of not trusting but are actually using or need to use that hard wired part of ourselves in yet formerly unrecognized calculations. You may be the one to bring us down to earth.

[Anibal Monasterio]

I ask: We can really expect in the long run that neuroeconomics as a tentatively promising field of research, will open us an avenue to good and powerfull insights into the deepest secrets of mind/brain? Because many of our economic tools (markets, pricing models, utility evaluation...) are modern social constructions, that presumably do not have a hardwired presence in human nature "ab initio".
Despite of it, i think for sure that neuroeconomics is one of the most fascinating intellectual challenge of the 21st century. A challenge initiated with the definition provided by one of its outstanding figures: K. MCcabe.

[Andrew Monjan]

Aside from using a an economic experimental paradigm, how does neuroeconomics differ from the domain of cognitive neuroscience?

[T. Onoma]

You have to be kidding right?

Okay, I know you're not, but let me help you out: people don't make _economic decisions_. They simply react upon a complex totality of a whole slew of non-economic cues. The only obvious patterns are critical events --like when I'm hungry I'm likley to buy food. Outside of that the neuro-patterns will largely depend on socio-economic class. Rich people buy, poor pople buy crap, and middle class folk worry about buying.

Other then that you have nothing more then a map of how the brain compares numbers: Cost is $5 and I have $10, that's a buy.

People can't make true economic decisions until they understand economics. And from the general looks of things, most economists don't even understand economics. So good luck with the pseudo-science.

[PacRim Jim]

Neuroeconomics-based intelligent agents for negotiating on the Web. The basis for the future economy. Sounds like a startup or two.

[David Govett]

Is there a scientific basis for irrational decisions? I ask because many of my economic decisions are irrational, in that they are not determined by need or even financial solvency. Tough to build the foundations of a scientific discipline on such quicksand, it would seem. Good luck.

[Eazy-E]

deez nutz!