Neuroeconomics

Neuroeconomics is an interdisciplinary field that seeks to explain human decision making, the ability to process multiple alternatives and to follow a course of action that classic economic theories are not able to explain. It studies how economic behavior can shape our understanding of the brain, and how neuroscientific discoveries can constrain and guide models of economics.

It combines research methods from neuroscience, experimental and behavioral economics, and cognitive and social psychology. As research into decision-making behavior becomes increasingly computational, it has also incorporated new approaches from theoretical biology, computer science, and mathematics. Neuroeconomics studies decision making, by using a combination of tools from these fields so as to avoid the shortcomings that arise from a single-perspective approach. In mainstream economics, expected utility (EU), and the concept of rational agents, are still being used. Many economic behaviors are not fully explained by these models, such as heuristics and framing.

Behavioral economics emerged to account for these anomalies by integrating social, cognitive, and emotional factors in understanding economic decisions. Neuroeconomics adds another layer by using neuroscientific methods in understanding the interplay between economic behavior and neural mechanisms. By using tools from various fields, some scholars claim that neuroeconomics offers a more integrative way of understanding decision making.

See also

Behavioral economics

Papers

• Camerer, C. F., Loewenstein, G., & Prelec, D. (2004). Neuroeconomics: Why economics needs brains. The Scandinavian Journal of Economics, 106(3), 555-579.
• Camerer, C., Loewenstein, G., & Prelec, D. (2005). Neuroeconomics: How neuroscience can inform economics. Journal of economic Literature, 43(1), 9-64.
• Bickel, W. K., Miller, M. L., Yi, R., Kowal, B. P., Lindquist, D. M., & Pitcock, J. A. (2007). Behavioral and neuroeconomics of drug addiction: competing neural systems and temporal discounting processes. Drug and alcohol dependence, 90, S85-S91.
• Camerer, C. F. (2007). Neuroeconomics: using neuroscience to make economic predictions. The Economic Journal, 117(519), C26-C42.
• Fehr, E., & Singer, T. (2005). The neuroeconomics of mind reading and empathy.
• Platt, M. L., & Huettel, S. A. (2008). Risky business: the neuroeconomics of decision making under uncertainty. Nature neuroscience, 11(4), 398-403.
• Rustichini A (2009). Neuroeconomics: What have we found, and what should we search for?. Current Opinion in Neurobiology 19: 672–677. doi:10.1016/j.conb.2009.09.012.

Books

• Glimcher, P. W., & Fehr, E. (2013). Neuroeconomics: Decision making and the brain. Academic Press.
• Glimcher, P. W. (2004). Decisions, uncertainty, and the brain: The science of neuroeconomics. MIT press.
• Glimcher, P. W. (2010). Foundations of neuroeconomic analysis. Oxford University Press.
• Thorne, Daniel R. (2014). Neuroeconomics: an Applied Information Theory.
• Krueger, David (2009) The Secret Language of Money, McGraw-Hill Professional.