Neuroeconomics: Chapter from 'Handbook of Experimental Economics' (2011, pdf) Jan 31 2020 14:16 languageMoneyScience
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Colin Camerer (California Institute of Technology),
Jonathan Cohen (Princeton University),
Ernst Fehr (University of Zurich),
Paul Glimcher (New York University),
David Laibson (Harvard University)
"One may wonder whether Adam Smith, were he working today, would not be a neuroeconomi[st]" - Aldo Rustichini (2005).
Neuroeconomics is the study of the biological microfoundations of economic cognition and behavior. Biological microfoundations are neurochemical mechanismsand pathways, like brain regions, neurons, genes, and neurotransmitters. Economic cognition includes memory, preferences,emotions,mental representations, expectations, anticipation, learning, information processing, inference, simulation, valuation, and the subjective experience of reward. In general, neuroeconomic research seeks to identify and test biologically microfounded models that link cognitive building blocks to economic behavior.If successful, neuroeconomic research willimproveeconomists‘ability to forecast behavior(e.g., Bernheim et al 2011, Fehr and Rangel 2011).
Neuroeconomics is a big tent. Neuroeconomic research requiressome curiosity aboutneurobiology, but neuroeconomic research does not necessarily require a departure from classical economic assumptions (e.g.,rationality and dynamic consistency). A classical economist would be a neuroeconomist if she wanted to study the biological mechanisms that influence rational decision-making. For example, neuroeconomic research provides insights about the sources of preference heterogeneity. To be a neuroeconomist you need to take an interest in the operation of the brain, but you don‘t need to prejudge its rationality...