Neuroeconomics is a research programme founded on the thesis that cognitive and neurobiological data constitute evidence for answering economic questions. I employ confirmation theory in order to reject arguments both for and against neuroeconomics. I also emphasize that some arguments for neuroeconomics will not convince the skeptics because these arguments make a contentious assumption: economics aims for predictions and deep explanations of choices in general. I then argue for neuroeconomics by appealing to a much more restrictive (...) (and thereby skeptic-friendly) characterization of the aims of economics. (shrink)

Neuroeconomic studies are liable to fall into the reverse inference fallacy, a form of affirmation of the consequent. More generally neuroeconomics relies on two problematic steps, namely the inference from brain activities to the engagement of cognitive processes in experimental tasks, and the presupposition that such inferred cognitive processes are relevant to economic theorizing. The first step only constitutes the reverse inference fallacy proper and ways to correct it include a better sense of the neural response selectivity of the (...) targeted brain areas and a better definition of relevant cognitive ontologies for neuroeconomics. This second way also allows increased coherence between the cognitive processes actually involved in neuroeconomics experiments and the theoretical constructs of economics. We suggest means of increasing neural response selectivity in neuroeconomic experimental paradigms. We also discuss how the choice of cognitive ontologies can both avoid implicit reductionist strategies (from economic constructs to neural patterns) and irrelevance, as cognitive processes engaged in experimental tasks may lack immediate bearing on the study of economic behavior. With these joint improvements neuroeconomics can be a progressive science. (shrink)

We briefly describe ways in which neuroeconomics has made contributions to its contributing disciplines, especially neuroscience, and a specific way in which it could make future contributions to both. The contributions of a scientific research programme can be categorized in terms of (1) description and classification of phenomena, (2) the discovery of causal relationships among those phenomena, and (3) the development of tools to facilitate (1) and (2). We consider ways in which neuroeconomics has advanced neuroscience and economics (...) along each line. Then, focusing on electrophysiological methods, we consider a puzzle within neuroeconomics whose solution we believe could facilitate contributions to both neuroscience and economics, in line with category (2). This puzzle concerns how the brain assigns reward values to otherwise incomparable stimuli. According to the common currency hypothesis, dopamine release is a component of a neural mechanism that solves comparability problems. We review two versions of the common currency hypothesis, one proposed by Read Montague and colleagues, the other by William Newsome and colleagues, and fit these hypotheses into considerations of rational choice. (shrink)

Nobody in this debate questions the point that neuroeconomics remains full of potential, and little else as yet. If so, that really is progress of sorts. I was getting afraid that we would have to open nominations for the Captain Ahab Award for obsessive work on the promotion of neuroeconomics.

Recent neuroeconomic studies challenge the conventional economic logic of behavior. After an introduction to some starting points of brain research in ‘classical’ economics we discuss the final and contingent causes of rational and irrational behavior in neuroeconomics and standard economics and present the concept of expanded rationality models (ERM) which imports neuroeconomic elements like emotions, beliefs and neuroscientific constraints and exports improved testable predictions. The typical structure of neuroeconomic proof of economic models and the imprecise neuroscientific measurement let us (...) suggest a feed-back structure of economic research. We apply Hirshleifer’s conception of macro-/micro-technology and contrast it to the neuroeconomic black box critique on economic theory. Furthermore, instead of direct adjustment of preference structures we propose the auxiliary creation of neuroeconomic constraints like action-dependent or outcome-dependent neuroeconomic belief constraints (NBC) and emotion compatibility constraints (ECC). This prepares the ground for our examination of neuroeconomics and ERM as two different paths towards an analytical unification of behavioral sciences. (shrink)

Neuroeconomics has the potential to fundamentally change the way economics is done. This article identifies the ways in which this will occur, pitfalls of this approach, and areas where progress has already been made. The value of neuroeconomics studies for social policy lies in the quality, replicability, and relevance of the research produced. While most economists will not contribute to the neuroeconomics literature, we contend that most economists should be reading these studies.

Over the last decade, neuroeconomic research has attracted increasing attention by economic modellers and methodologists. In this paper, I examine five issues about neuroeconomic modelling and methodology that have recently been subject to considerable controversy. For each issue, I explicate and appraise prominent neuroeconomists' findings, focusing on those that are claimed to directly inform economic theorizing. Moreover, I assess often-made assertions concerning how neuroeconomic research putatively advances the economic modelling of choice. In doing so, I combine review and critical arguments (...) to provide a methodological evaluation of neuroeconomists' contributions. (shrink)

The following is a set of reading notes on, and questions for, the Neuroeconomics enterprise. My reading of neuroscience evidence seems to be at odds with basic conceptions routinely assumed in the Neuroeconomics literature. I also summarize methodological concerns regarding design, implementation, and statistical evaluation of Neuroeconomics experiments.

Neuroeconomics is the newest of the economic sciences with a focus on how the embodied human brain interacts with its institutional and social environment to make economic decisions. This paper presents an overview of neuroeconomics methods and reviews a number of results in this emerging field of study.

Understanding more about how the brain functionsshouldhelp us understand economic behaviour. But some would have us believe that it has done this already, and that insights from neuroscience have already provided insights in economics that we would not otherwise have. Much of this is just academic marketing hype, and to get down to substantive issues we need to identify that fluff for what it is. After we clear away the distractions, what is left? The answer is that a lot is (...) left, but it is still all potential. That is not a bad thing, or a reason to stop the effort, but it does point to the need for a serious reconsideration of what neuroeconomics is and what passes for explanation in this literature. I argue that neuroeconomics can be a valuable field, but not the way it is being developed and “sold” now. The same is true more generally of behavioural economics, which shares many of the methodological flaws of neuroeconomics. (shrink)

Neuroeconomics is examined critically using data on the response times of subjects who were asked to express their preferences in the context of the Allais Paradox. Different patterns of choice are found among the fast and slow responders. This suggests that we try to identify types of economic agents by the time they take to make their choices. Nevertheless, it is argued that it is far from clear if and how neuroeconomics will change economics.

I distinguish between two styles of research that are both called . Neurocellular economics (NE) uses the modelling techniques and mathematics of economics to model relatively encapsulated functional parts of brains. This approach rests upon the fact that brains are, like markets, massively distributed information-processing networks over which executive systems can exert only limited and imperfect governance. Harrison's (2008) deepest criticisms of neuroeconomics do not apply to NE. However, the more famous style of neuroeconomics is behavioural economics in (...) the scanner. This is often motivated by complaints about conventional economics frequently heard from behavioural economists. It attempts to use neuroimaging data to justify arguments for replacing standard aspects of microeconomic theory by facts and conjectures about human psychology. Harrison's grounds for unease about neuroeconomics apply to most BES, or at least to its explicit methodology. This methodology is naively reductionist and illegitimately assumes that economics should not do what all successful science does, namely, model abstract aspects of its target phenomena instead of would-be complete and fully ecologically situated facsimiles of them. (shrink)

Neuroscience is a fascinating discipline – its dynamic progress has led to the emergence of new interdisciplinary research programmes with great potential. One of these research areas is neuroeconomics. As will be shown in this article, this discipline, which is difficult to clearly characterize and define, is faced with many problems. This paper argues that social scientists should be interested in the problems and tendencies in social neuroscience for several reasons. Neuroeconomics, and other disciplines inspired by neuroscience, will (...) compete with their parent disciplines in many fields of interest. On one hand it will be necessary for scientists to define and defend the irreplaceable roles of their disciplines, but also critically evaluate the potential of new approaches on the other. In the context of this discussion, which reopens questions about the scientific status of economics and its roles, this paper introduces the main problems related to neuroeconomics. This paper concludes that these problems represent a wide domain for social scientists and methodologists of science. (shrink)

Neuroscience is a fascinating discipline – its dynamic progress has led to the emergence of new interdisciplinary research programmes with great potential. One of these research areas is neuroeconomics. As will be shown in this article, this discipline, which is difficult to clearly characterize and define, is faced with many problems. This paper argues that social scientists should be interested in the problems and tendencies in social neuroscience for several reasons. Neuroeconomics, and other disciplines inspired by neuroscience, will (...) compete with their parent disciplines in many fields of interest. On one hand it will be necessary for scientists to define and defend the irreplaceable roles of their disciplines, but also critically evaluate the potential of new approaches on the other. In the context of this discussion, which reopens questions about the scientific status of economics and its roles, this paper introduces the main problems related to neuroeconomics. This paper concludes that these problems represent a wide domain for social scientists and methodologists of science. (shrink)

The goal of neuroeconomics is a mathematical theory of how the brain implements decisions, that is tied to behaviour. This theory is likely to show some decisions for which rational-choice theory is a good approximation, to provide a deeper level of distinction among competing behavioural alternatives, and to provide empirical inspiration for economics to incorporate more nuanced ideas about endogeneity of preferences, individual difference, emotions, endogeneous regulation of states, and so forth. I also address some concerns about rhetoric and (...) practical epistemology. Neuroscience articles are necessarily speculative and the science has proceeded rapidly because of that rhetorical convention. Single-study papers are encouraged and are necessarily limited in what can be inferred, so the sturdiest cumulation of results, and the best guide forward, comes in review journals which compile results and suggest themes. The potential of neuroeconomics is in combining the clearest experimental paradigms and statistical methods in economics, with the unprecedented capacity to measure a range of neural and cognitive activity that economists like Edgeworth, Fisher and Ramsey daydreamed about but did not have. (shrink)

So far, the methodological debate about neuroeconomics rarely refers to original methodological positions in the neurosciences. I confront one of the most influential ones, the constitutive explanations or mechanism approach, with methodological claims that directly relate the economic model of choice with neuronal embodiments, represented by Glimcher’s influential work. Constitutive explanations are composite and non-reductionist, therefore allow for recognizing complex causal interactions between basal neuronal phenomena and cognitive structures, also involving external symbolic media. I demonstrate the power of this (...) methodology in discussing the example of money, which Glimcher posits as one of the most important research tasks in further developing neuroeconomics. Whereas Glimcher justifies neuroscientific reductionism by presenting an evolutionary rationale for deploying formal economic models on particular modules enabling choice, the case of money reveals the need for mechanistic explanations that include a substantial role for cultural evolution, though recognizing causal interactions with basal neuronal mechanisms. (shrink)

‘Neuroeconomics’ can be broadly defined as the research of how the brain interacts with the environment to make decisions that are functional given individual and contextual constraints. Deciphering such brain-environment transactions requires mechanistic understandings of the neurobiological processes that implement value-dependent decision making. To this end, a common empirical approach is to investigate neural mechanisms of reward-based decision making. Flexible updating of choices and associated expected outcomes in ways that are adaptive for a given task (or a given set (...) of tasks) at hand relies on dynamic neurochemical tuning of the brain’s functional circuitries involved in the representation of tasks, goals and reward prediction. Empirical evidence as well as computational theories indicate that various neurotransmitter systems (e.g., dopamine, norepinephrine, and serotonin) play important roles in reward-based decision making. In light of the apparent aging-related decline in various aspects of the dopaminergic system as well as the effects of neuromodulation on reward-related processes, this article focuses selectively on the literature that highlights the triadic relations between dopaminergic modulation, reward-based decision making, and aging. Directions for future research on aging and neuroeconomoics are discussed. (shrink)

As an emerging discipline, neuroeconomics faces considerable methodological and practical challenges. In this paper, I suggest that these challenges can be understood by exploring the similarities and dissimilarities between the emergence of neuroeconomics and the emergence of cognitive and computational neuroscience two decades ago. From these parallels, I suggest the major challenge facing theory formation in the neural and behavioural sciences is that of being under-constrained by data, making a detailed understanding of physical implementation necessary for theory construction (...) in neuroeconomics. Rather than following a top-down strategy, neuroeconomists should be pragmatic in the use of available data from animal models, information regarding neural pathways and projections, computational models of neural function, functional imaging and behavioural data. By providing convergent evidence across multiple levels of organization, neuroeconomics will have its most promising prospects of success. (shrink)

Many of the arguments for neuroeconomics rely on mistaken assumptions about criteria of explanatory relevance across disciplinary boundaries and fail to distinguish between evidential and explanatory relevance. Building on recent philosophical work on mechanistic research programmes and the contrastive counterfactual theory of explanation, we argue that explaining an explanatory presupposition or providing a lower-level explanation does not necessarily constitute explanatory improvement. Neuroscientific findings have explanatory relevance only when they inform a causal and explanatory account of the psychology of human (...) decision-making. (shrink)

This PhD thesis focuses on the philosophical foundations of Neuroeconomics, an innovative research program which combines findings and modelling tools from economics, psychology and neuroscience to account for human choice behaviour. The proponents of Neuroeconomics often manifest the ambition to foster radical modifications in the accounts of choice behaviour developed by its parent disciplines. This enquiry provides a philosophically informed appraisal of the potential for success and the relevance of neuroeconomic research for economics. My central claim is that (...) neuroeconomists can help other economists to build more predictive and explanatory models, yet are unlikely to foster revolutionary modifications in the economic theory of choice. The contents are organized as follows. In chapters 1-2, I present neuroeconomists’ investigative tools, distinguish the most influential approaches to neuroeconomic research and reconstruct the case in favour of a neural enrichment of economic theory. In chapters 3-7, I combine insights from neuro-psychology, economic methodology and philosophy of science to develop a systematic critique of Neuroeconomics. In particular, I articulate four lines of argument to demonstrate that economists are provisionally justified in retaining a methodologically distinctive approach to the modelling of decision making. My first argument points to several evidential and epistemological concerns which complicate the interpretation of neural data and cast doubt on the inferences neuroeconomists often make in their studies. My second argument aims to show that the trade-offs between the modelling desiderata that neuroeconomists and other economists respectively value severely constrain the incorporation of neural insights into economic models. My third argument questions neuroeconomists’ attempts to develop a unified theory of choice behaviour by identifying some central issues on which they hold contrasting positions. My fourth argument differentiates various senses of the term ‘revolution’ and illustrates that neuroeconomists are unlikely to provide revolutionary contributions to economic theory in any of these senses. (shrink)

Despite their popularity, dual process accounts of human reasoning and decision-making have come under intense scrutiny in recent years. Cognitive scientists and philosophers alike have come to question the theoretical foundations of the ‘standard view’ of dual process theory and have challenged the validity and relevance of evidence in support of it. Moreover, attempts to modify and refine dual process theory in light of these challenges have generated additional concerns about its applicability and refutability as a scientific theory. With these (...) concerns in mind, this paper provides a critical review of dual process theory in economics, focusing on its role as a psychological framework for decision modeling in behavioral economics and neuroeconomics. I argue that the influx of criticisms against dual process theory challenge the descriptive accuracy of dualistic decision models in economics. In fact, the case can be made that the popularity of dual process theory in economics has less to do with the empirical success of dualistic decision models, and more to do with the convenience that the dual process narrative provides economists looking to explain-away decision anomalies. This leaves behavioral economists and neuroeconomists with something of a dilemma: either they stick to their purported ambitions to give a realistic description of human decision-making and give up the narrative, or they revise and restate their scientific ambitions. (shrink)

This article introduces and discusses from a philosophical point of view the nascent field of neuroeconomics, which is the study of neural mechanisms involved in decision-making and their economic significance. Following a survey of the ways in which decision-making is usually construed in philosophy, economics and psychology, I review many important findings in neuroeconomics to show that they suggest a revised picture of decision-making and ourselves as choosing agents. Finally, I outline a neuroeconomic account of irrationality.

The paper provides a neurophilosophical assessment of a controversy between two neuroeconomic models that compete to identify the putative object of neural utility: goods or actions. We raise two objections to the common view that sees the ‘good-based’ model prevailing over the ‘action-based’ model. First, we suggest extending neuroeconomic model discrimination to all of the models’ neurophilosophical assumptions, showing that action-based assumptions are necessary to explain real-world value-based decisions. Second, we show that the good-based model’s presumption of introducing a normative (...) neural definition of economic choice would arbitrarily restrict the domain of economic choice and consequently of economics. (shrink)

À la fin des années 1990, plusieurs tendances convergentes en économie, psychologie et neuroscience ont préparé le terrain pour la naissance d’un nouveau champ scientifique qualifié de « neuroéconomie ». Comme pour toute discipline émergente – pensons par exemple à l’économie mathématique, l’économétrie ou l’économie expérimentale en d’autres temps – la neuroéconomie est plutôt controversée en économie. Elle soulève un grand nombre de questions d’ordre empirique, méthodologique et philosophiques donnant lieu à des débats et controverses que l’article identifie et discute (...) à travers trois questions majeures relatives aux connaissances produites : Sont-elles fiables? Sont-elles scientifiquement légitimes? Sont-elles utiles pour les économistes? Sans prétendre à l’exhaustivité, ce cadre analytique permet de comprendre l’essence des principales critiques adressées à la neuroéconomie. Dans le même temps, l’article éclaire la nature des réponses susceptibles d’être apportées à ces critiques au vu des progrès conceptuels et empiriques qu’a connus ce champ de recherche depuis son émergence et à la lumière du tournant apparu dans l’agenda de la neuroéconomie au cours de la dernière décennie. JEL Codes : A12, B41, C51, C81, C9, D03, D87. (shrink)

Why do we run toward people we love, but only walk toward others? Why do people in New York seem to walk faster than other cities? Why do our eyes linger longer on things we value more? There is a link between how the brain assigns value to things, and how it controls our movements. This link is an ancient one, developed through shared neural circuits that on one hand teach us how to value things, and on the other hand (...) control the vigor with which we move. As a result, when there is damage to systems that signal reward, like dopamine and serotonin, that damage not only affects our mood and patterns of decision making, but how we move. In this book, we first ask why in principle evolution should have developed a shared system of control between valuation and vigor. We then focus on the neural basis of vigor, synthesizing results from experiments that have measured activity in various brain structures and neuromodulators, during tasks in which animals decide how patiently they should wait for reward, and how vigorously they should move to acquire it. Thus, the way we move unmasks one of our well-guarded secrets: how much we value the thing we are moving toward. (shrink)

Interest in the neural processes underlying decision making has led to a flurry of recent research in the fields of both moral psychology and neuroeconomics. In this paper, we first review some important findings from both disciplines, and then argue that the two fields can mutually benefit each other. A more explicit recognition of the role of values and norms will likely lead to more accurate models of decision making for neuroeconomists, whereas the tasks, insights into neural mechanisms, and (...) mathematical modeling common in neuroeconomic research offer moral psychologists the opportunity to expand their field and move beyond methodological limitations that may have hindered the field’s progress to this point. We conclude by highlighting an exciting group of recent studies that illustrate the potential of research that embraces the integrated moral/neuroeconomic approach that we suggest here. (shrink)

ABSTRACT The past fifteen years or so have witnessed considerable progress in our understanding of how the human brain works. One of the objectives of the fast-growing field of neuroscience is to deepen our knowledge of how the brain perceives and interacts with the external world. Advances in this direction have been made possible by progress in brain imaging techniques and by clinical data obtained from patients with localized brain lesions. A relatively new field within neuroscience is neuroeconomics, which (...) focuses on individual decision making and aims to systematically classify and map the brain activity that correlates with decision-making that pertains to economic choices. Neuroeconomic studies rely heavily on functional magnetic resonance imaging (fMRI), which measures the haemodynamic response (that is, changes in the blood flow) related to neural activity in the brain. (shrink)

Book Reviews Jack Vromen, Economics and Philosophy, FirstView Article.

In this paper, I examine metaphysical aspects in the neuroeconomics debate. I propose that part of the debate can be better understood by supposing two metaphysical stances, mechanistic and functional. I characterize the two stances, and discuss their relations. I consider two models of framing, in order to illustrate how the features of mechanistic and functional stances figure in the practice of the sciences of individual decision making.

Cruelty does not emerge from a single emotional system of the brain. Its many cognitive aspects are intermeshed inextricably with the nature of negative affects ranging from fear to suffering. The rewards of cruelty may be counteracted by a variety of neurochemical factors as well as novel social policies.

Hayek’s seminal contribution to theoretical neurosciences,The Sensory Order(1952) remains neglected in current efforts at integrating the neurosciences, psychology and economics. I defend the view that Hayek presents the case for an evolutionary alternative to leading paradigms in the field and look at two in more detail: the good-based model in neuroeconomics and the dual systems approach in behavioural economics. In both cases, essential Hayekian insights remain valid in the context of modern neuroscience, allow for taking account of recent research, (...) and sketch a dynamic and selectionist model of choice. (shrink)

By the late 1990s, several converging trends in economics, psychology, and neuroscience had set the stage for the birth of a new scientific field known as “neuroeconomics”. Without the availability of an extensive variety of experimental designs for dealing with individual and social decision-making provided by experimental economics and psychology, many neuroeconomics studies could not have been developed. At the same time, without the significant progress made in neuroscience for grasping and understanding brain functioning, neuroeconomics would have (...) never seen the light of day. The paper is an overview of the main significant advances in the knowledge of brain functioning by neuroscience that have contributed to the emergence of neuroeconomics and its rise over the past two decades. These advances are grouped over three non-independent topics referred to as the “emo-rational” brain, “social” brain, and “computational” brain. For each topic, it emphasizes findings considered as critical to the birth and development of neuroeconomics while highlighting some of prominent questions about which knowledge should be improved by future research. In parallel, it shows that the boundaries between neuroeconomics and several recent sub-fields of cognitive neuroscience, such as affective, social, and more generally, decision neuroscience, are rather porous. (shrink)

From a classical perspective, multinational companies operate based on market determinants, but recent economic discussions emphasize the central role of the human cognitive system in the decision-making process, thereby giving birth to interdisciplinary fields such as behavioral economics and neuroeconomics. While neuroeconomics is still considered an emerging field, hitherto scant studies have investigated the reflection of cultural experiences on the nervous system. Moreover, the interpretation of cultural diversity in the decision-making process, especially from a neuroeconomic perspective, has not (...) been explored. In response, this study, aperspective research in nature, endeavors to research the neural responses to cultural diversity by contextualizing the neuroeconomic discussion within an MNC framework as one of the best multicultural settings. This study demonstrates that the internationalization process of MNCs is established on the cultural identity and integration of the executive. Through a neuroscientific lens, our findings prove that culture is a fundamental determinant of the cognitive makeup; therefore, cultural diversity in MNCs influences their decision-making process. Moreover, the performance of MNCs is driven by cultural harmonization at the executive level. Finally, the study reveals that the novel field of neuroeconomics is instrumental in identifying cultural intuitions on brain cells and the implications on economic decisions even at a corporate level. The main contribution of this study is the initiation of a multidisciplinary merge of the sociocultural and economic as well as neuroscientific fields, as a research center for MNCs’ decision-making processes. (shrink)

Neuroeconomics focuses on brain imaging studies mapping neural responses to choice behaviour. Economic theory is concerned with choice behaviour but it is silent on neural activities. We present a game theoretic model in which players are endowed with an additional structure – a simple “nervous system” – and interact repeatedly in changing games. The nervous system constrains information processing functions and behavioural functions. By reinterpreting results from evolutionary game theory, we suggest that nervous systems can develop to “function well” (...) in exogenously changing strategic environments. We present an example indicating that an analogous conclusion fails if players can influence endogenously their environment. (shrink)

Neuroscience can contribute to economics by inspiring new models, helping to distinguish models that have similar implications for readily available data, and guiding interpretations of decision-making processes by policy-makers. However, there is an additional less straightforward role for it to play: augmenting, along with survey data and other non-revealed-preference sources, assessments of well-being. The need for such augmentation lies in the slightly bizarre stance taken by modern economic theory, namely that economics is concerned only with choices and not with welfare (...) per se. It is shown that this is neither historical nor at all necessary, even within the standard paradigm. Although neuroscience is by no means a panacea for determining true utility, which ultimately remains a subjective concept, it provides a uniquely useful complementary dataset. (shrink)

Clark expresses reservations about Friston's reductive interpretation of action-oriented predictive processing (AOPP) models of cognition, but he doesn't link these reservations to specific alternatives. Neuroeconomic models of sub-cognitive reward valuation, which, like AOPP, integrate attention with action based on prediction error, are such an alternative. They interpret reward valuation as an input to neocortical processing instead of reducing it.

In this short note I speculate about the various ways in which the study of neurological aspects of decision making could be fruitful for economic modelling.