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Neuroeconomics: Why Economics Needs Brains

Camerer, Colin F. and Loewenstein, George and Prelec, Drazen (2004) Neuroeconomics: Why Economics Needs Brains. Scandinavian Journal of Economics, 106 (3). pp. 555-579. ISSN 0347-0520. http://resolver.caltech.edu/CaltechAUTHORS:20110204-092943452

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Abstract

Neuroeconomics uses knowledge about brain mechanisms to inform economic theory. It opens up the "black box" of the brain, much as organizational economics opened up the theory of the firm. Neuroscientists use many tools-including brain imaging, behavior of patients with brain damage, animal behavior and recording single neuron activity. The key insight for economics is that the brain is composed of multiple systems which interact. Controlled systems ("executive function") interrupt automatic ones. Brain evidence complicates standard assumptions about basic preference, to include homeostasis and other kinds of state-dependence and shows emotional activation in ambiguous choice and strategic interaction.


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Additional Information:© 2004 The editors of the Scandinavian Journal of Economics. Published by Blackwell Publishing. We thank participants at the Russell Sage Foundation-sponsored conference on Neurobehavioral Economics (May 1997) at Caregie-Mellon, the Princeton workshop on Neural Economics (December 2000) and the Arizona conference (March 2001). This research was supported by NSF grant SBR-9601236 and by the Center for Advanced Study in Behavioral Sciences, where the authors visited during 1997-1998. David Laibson's presentation at the Princeton conference was particularly helpful, as were comments and suggestions from referees, John Dickhaut, Paul Zak, a paper by Jen Shang, and conversations with John Allman, Greg Berns, Jonathan Cohen, Angus Deaton, Dave Grether, Brian Knutson, David Laibson, Danica Mijovic-Prelec, Read Montague, Charlie Plott, Matthew Rabin, Peter Shizgal and Steve Quartz.
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NSFSBR-9601236
Center for Advanced Study in Behavioral SciencesUNSPECIFIED
Record Number:CaltechAUTHORS:20110204-092943452
Persistent URL:http://resolver.caltech.edu/CaltechAUTHORS:20110204-092943452
Official Citation:Neuroeconomics: Why Economics Needs Brains Colin F. Camerer, George Loewenstein and Drazen Prelec The Scandinavian Journal of Economics Vol. 106, No. 3, Behavioral Economics (Sep., 2004), pp. 555-579. Published by: Blackwell Publishing on behalf of The Scandinavian Journal of Economics Article Stable URL: http://www.jstor.org/stable/3441124
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:22007
Collection:CaltechAUTHORS
Deposited By: Tony Diaz
Deposited On:02 Mar 2011 19:43
Last Modified:02 Mar 2011 19:43

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