The economist has an article in last weeks edition asking "Do economists need brains?". Basically an introduction to neuroeconomics. They cite the first success of neuroeconomics as providing support for the idea that irrational behaviour in a one-shot ultimatum game is explained by a punishment motive:
"Neuroeconomists have tried to explain this seemingly irrational behaviour [turning down low offers] by using an “active MRI”. In MRIs used in medicine the patient simply lies still during the procedure; in active MRIs, participants are expected to answer economic questions while blood flows in the brain are scrutinised to see where activity is going on while decisions are made. They found that rejecting a low offer in the ultimatum game tended to be associated with high levels of activity in the dorsal stratium, a part of the brain that neuroscience suggests is involved in reward and punishment decisions, providing some support to the behavioural theories."
They go on to suggest that economics can improve neuroscience's understanding of how the brain works by introducing neuroscientists to game theory:
"The neuroscientist’s idea of a game is rock, paper, scissors, which is zero-sum, whereas economists have focused on strategic games that produce gains through collaboration."
They then describe some of the arguments against, as well as some proponents who go back somewhat further than than the current enthusiasts, before finishing by drawing a clear distinction between (soft) behavioural econ and (hard) neroecon. Quoting Kahneman:
"It is far easier to argue for mindless economics than for brainless economics"
Links to some of the books and articles mentioned are below:
The Emotional Brain: The Mysterious Underpinnings of Emotional Life by Joseph LeDoux [Amazon]
The Case for Mindless Economics Faruk Gul & Wolfgang Pesendorfer
Edgeworth's Hedonimeter and the Quest to Measure Utility by David Colander
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