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

    Neuroeconomics

    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: ericroston@aol.com. Thanks. I enjoy the site. Best, Eric

    reply to this | link to this | view in thread ]

  2. icon
    Mike (profile), 1 Mar 2004 @ 11:38pm

    Re: Neuroeconomics

    Eric,

    Not bad form at all. Others do so as well. I was just pointing out that it was you who had submitted it. In fact, please continue to submit them if you feel the audience here would appreciate it.

    Anyway, I wasn't trying to criticize your take on the issue. My complaint is mostly with the neuroeconomists who talk about traditional "rational man" economics as if it has nothing to offer to the debate. I agree that it's fascinating work (and have a good friend who is researching stuff in this area). I just think they tend to trash those who came before them when they could learn from them and build on their work with additional scientific evidence.

    Mike

    reply to this | link to this | view in thread ]

  3. identicon
    Peter, 3 Mar 2004 @ 2:22am

    Neuroeconomics

    Mike, Eric,

    I do not think that it is really useful for the neuroeconomic research to discuss in classical terms like "ratinonality" oder "utiliy". In fact, there are obviousily different neuorological decision pattern, which is well-known in neuroscience (for instance see the work of Damasio). To improve our understanding of economic decision making, the first thing we´ve got to do is to collect some new data. And than, yet, we should try to develop some new theorie (with new terms), which fits better to the collected data.

    By the way: Perhaps you would like to participate on the 2nd Conference on Neuroeconomics in May 2004? Further informations: www.connecs.org

    Regards

    Peter

    reply to this | link to this | view in thread ]

  4. 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.

    reply to this | link to this | view in thread ]

  5. identicon
    Peter, 4 Mar 2004 @ 5:35am

    Re: Neuroeconomics

    Hi Douglas,

    I think this could be an acceptable approach for further research.

    Regards

    Peter

    reply to this | link to this | view in thread ]


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