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

Contents 1 Methodology 1.1 Neural recording techniques 2 Experiments 3 Neuroeconomic Programs 4 Criticism 5 Neuromarketing 6 See also 7 References 8 Further reading 9 Journal 10 External links

[edit] 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.

[edit] 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 seldomly 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]

[edit] 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.

[edit] 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.^[2] 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.^[3] Caltech now (c 2007) has a Behavioral and Social Neuroscience (BSN) PhD in either CNS or HSS ^[4], mixing economic theory, neurobiology, computational neuroscience, and neuroscientific techniques. [CCamerer]

[edit] Criticism

Different experts have criticized the emerging field. Example of critics have been that it is "a field that oversells itself";^[5] or that neuroeconomic studies "misunderstand and underestimate traditional economic models".^[6]

[edit] 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.^[7][8]

[edit] See also

• Deppe M; Schwindt W; Pieper A; Kugel H; Plassmann H; Kenning P; Deppe K; Ringelstein EB; "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: "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; "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.
• Daniel Houser, Kevin McCabe, Euroeconomics, Advances in Health Economics and Health Services Research v. 20, Emerald Group Publishing Limited, Bingley West Yorkshire http://books.emeraldinsight.com/display.asp?K=9781848553040&cur=GBP&sf1=kword_index&sort=sort_date%2Fd&st1=Neuroeconomics&sf2=eh_cat_class&m=1&dc=2
• Peter Kenning, Hilke Plassmann, "Brain Research Bulletin - Special Issue on NeuroEconomics", 2005
• Paul Glimcher, Decisions, Uncertainty, and the Brain: The Science of Neuroeconomics, MIT Press, 2003.
• Colin Camerer, George Loewenstein, Drazen Prelec, "Neuroeconomics: How neuroscience can inform economics", Journal of Economic Literature, 2005
• Paul J. Zak, Robert Kurzban and William T. Matzner, "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, 435:473–476, 2005 June 2.
• Paul J. Zak, Robert Kurzban, and William T. Matzner. "Oxytocin is Associated with Human Trustworthiness", Hormones and Behavior, 48, 522 –527, 2005.
• John Cassidy, "Mind Games. What neuroeconomics tells us about money and the brain", New Yorker, 2006 September.
• Hardy-Vallée, B. (forthcoming). "Decision-making: a neuroeconomic perspective". Philosophy Compass.
• Zak, Paul J., Stanton, Angela A., Ahmadi, Sheila, "Oxytocin Increases Generosity in Humans", PloS One, 2(11); e1128, November 7, 2007
• Sanfey, Alan G. "Social Decision-Making: Insights from Game Theory and Neuroscience" Science Magazine. October 2007. American Association for the Advancement of Science.

[edit] References

[edit] Further reading

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

[edit] Journal

Journal of Neuroscience, Psychology, and Economics

[edit] External links

• Scholarpedia neuroeconomics