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
    Eric Roston, 1 Mar 2004 @ 9:13pm


    Mike: Apologies if it's considered bad form to post one's own work. Your comment is well-taken, and the more I think about it, it opens up a whole can of epistomological worms. One of the things that's fascinating to me about neuroeconomic study is the way it blends physical science with centuries-old cultural questions, in this case, the old Latin notion of "dulce" versus "utile", sweet versus useful, or in a more modern interpretation, emotional versus utilitarian or rational. "Rational man" economics with its concern on maximiing gain has no room for the "dulce". I'm not convinced it's as easy as sweeping the non-rational into a de facto definition of rational or useful, but I think your objection strikes at a central question. Readers interested in these questions might consult the work of George Lowenstein at Carnegie-Mellon University.

    Again, don't want to appear in bad form. The column is new, and I'd hope to introduce it to the community and offer my e-mail address into the conversation: Thanks. I enjoy the site. Best, Eric

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