The Rise Of Neuroeconomics

from the plugged-into-the-brain dept

Eric Roston has submitted his own Time Magazine column about the rise of neuroeconomics: the study of how people make economic decisions by watching their brains (usually using fMRI equipment) as they make the decisions. The neuroeconomists (and, behind them, the neuromarketers) believe that they can figure out a better explanation for why people buy the way they do. It's a fascinating topic that doesn't get all that much attention (though, we've written about it before). The one thing that I think is presented incorrectly, though, is the idea that neuroeconomics is somehow different from traditional "rational man" economics. Those who claim the two are different point to seemingly irrational buying behaviors, but they're only irrational to the person saying it's irrational - not to the buyer. If someone buys something, then they have a reason for doing so. Even if an "objective" (as if that's possible) analysis, says the person shouldn't buy, they believe the utility of the purchase outweighs the cost - even if it's just satisfying some random urge to throw away money.

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  1. identicon
    Douglas Galbi, 3 Mar 2004 @ 7:01am

    Re: Neuroeconomics

    Paul Glimcher, in his pioneering book on neuroeconomics (Decisions, Uncertainty, and the Brain (2003)), uses economic models that come from the "rational man" field of work in economics. The thrust of his work is to relate an optimizing (economic) solution of a decision problem to the biology of an organism. The issue is not whether humans are "rational" or "irrational." The point is to recognize in studying biological hardware that the decision mechanisms of a real living body are physical capabilities that evolved to maximize selective fitness with respect to particular problems in natural-historical circumstances.

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