Fascinating special issue of the Journal of Economic Methodology - link here
Showing posts with label neuroeconomics. Show all posts
Showing posts with label neuroeconomics. Show all posts
Wednesday, June 23, 2010
ACCESS
Wednesday, February 17, 2010
Wine Case
The extent to which people enjoy wines that are more expensive regardless of intrinsic qualities is brought to bear in dramatic circumstances in court today. Essentially a group of people were fined/imprisoned having been convicted of a massive scam involving selling less prestigious wine for higher prices through falsely labelling them as a more expensive brand. Amazingly, given the scale of the scam, there were no consumer complaints at all, according to one of the lawyers interviewed by the BBC - bbc link
There are a number of behavioural and neuroeconomic studies on one reason why they got away with this for so long, namely that our brain tags more expensive wines as being tastier. See, for example, Drazen Prelec's MIT video , which references some famous studies.
There are a number of behavioural and neuroeconomic studies on one reason why they got away with this for so long, namely that our brain tags more expensive wines as being tastier. See, for example, Drazen Prelec's MIT video , which references some famous studies.
Sunday, July 12, 2009
Neuroeconomics survey
http://mihaicovaci.intercer.org/site/37/images/28.pdf
Wednesday, June 24, 2009
"MIT World": Merton Lecture on Derivatives
There will be a time “beyond crisis,” asserts Robert C. Merton (in this video lecture). "He delves into the dense science of derivatives -- a field he has fundamentally shaped -- to explain how the vast global economic collapse has come about, and how financial innovations at the heart of the collapse could also be tools for reconstruction."
A whole range of "MIT World" videos are available to browse through here. There is one by Drazen Prelec on Neuroeconomics, one by Jonathan Gruber on Healthcare, and one by Bill Gates on Innovation.
A whole range of "MIT World" videos are available to browse through here. There is one by Drazen Prelec on Neuroeconomics, one by Jonathan Gruber on Healthcare, and one by Bill Gates on Innovation.
Wednesday, May 27, 2009
Voodoo Correlations in FMRI: Full Issue
Michael posted recently on what has rapidly become a famous paper taking social neuroscience to task for using statistical methodologies that deliver spurious high correlations. The paper was a working paper and is now published along with six replies in Psych Science. Two of the papers, Lieberman et al and Nichols and Poline argue against the main conclusions of the paper.
http://www3.interscience.wiley.com/journal/118509128/home
http://www3.interscience.wiley.com/journal/118509128/home
Tuesday, May 12, 2009
Socioeconomic Status and the Developing Brain
Recent paper in TICS
Socioeconomic status and the developing brain
Daniel A. HackmanandMartha J. Farah
Center for Cognitive Neuroscience, Department of Psychology, University of Pennsylvania, 3720 Walnut Street, Room B51, Philadelphia, PA 19104-6241, USA
Abstract
Childhood socioeconomic status (SES) is associated with cognitive achievement throughout life. How does SES relate to brain development, and what are the mechanisms by which SES might exert its influence? We review studies in which behavioral, electrophysiological and neuroimaging methods have been used to characterize SES disparities in neurocognitive function. These studies indicate that SES is an important predictor of neurocognitive performance, particularly of language and executive function, and that SES differences are found in neural processing even when performance levels are equal. Implications for basic cognitive neuroscience and for understanding and ameliorating the problems related to childhood poverty are discussed.
Socioeconomic status and the developing brain
Daniel A. HackmanandMartha J. Farah
Center for Cognitive Neuroscience, Department of Psychology, University of Pennsylvania, 3720 Walnut Street, Room B51, Philadelphia, PA 19104-6241, USA
Abstract
Childhood socioeconomic status (SES) is associated with cognitive achievement throughout life. How does SES relate to brain development, and what are the mechanisms by which SES might exert its influence? We review studies in which behavioral, electrophysiological and neuroimaging methods have been used to characterize SES disparities in neurocognitive function. These studies indicate that SES is an important predictor of neurocognitive performance, particularly of language and executive function, and that SES differences are found in neural processing even when performance levels are equal. Implications for basic cognitive neuroscience and for understanding and ameliorating the problems related to childhood poverty are discussed.
Sunday, March 29, 2009
Neurofinance
A non-technical overview of Neurofinance is provided by Sapra and Zak below - the extent to which findings from neuroeconomics should influence financial regulation as well as financial education is an interesting question for debate.
http://ssrn.com/abstract=1323051
http://ssrn.com/abstract=1323051
Sunday, October 26, 2008
Rani Spiegler on Neuroeconomics
Below is a short article by Rani Spiegler on neuroeconomics. Some interesting criticisms of neuroecon including the use of small samples, the over-interpretation of correlations of decisions with brain activity, heavy statistical assumptions needed for fmri and so on. he argues that neuroeconomics may perform an important metaphorical role in motivating developments in economic theory and makes some other points (but the article is below so I wont spoil the rest for you!)
"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."
http://www.homepages.ucl.ac.uk/~uctprsp/neuro.pdf
"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."
http://www.homepages.ucl.ac.uk/~uctprsp/neuro.pdf
Sunday, August 31, 2008
Ernst Fehr Trust
Ernst Fehr gave the EEA Presidential Lecture on the role of trust. He summarised the potential importance of trust in financial markets and international relations. He argued that trust involves risk attitudes but must be considered more than risk attitudes. One reason for this is that the biological foundations of how people make trust decisions have clear pathways beyond those seen in risky decisions. The role of oxytocin, in particular, was discussed as a biological foundation of trust. One key question raised in the talk was the extent to which trust could ever be causally related to outcomes in cross-country settings. Various instrumental variable approaches have been tried (e.g. using common religions as an instrument) but there is no widely accepted way of doing this.
Some illustrative papers are below and his IDEAS page is well worth looking at for those interested in areas such as trust and neuroeconomics.
http://ideas.repec.org/a/aea/aecrev/v95y2005i2p346-351.html
http://ideas.repec.org/p/iza/izadps/dp1641.html
Some illustrative papers are below and his IDEAS page is well worth looking at for those interested in areas such as trust and neuroeconomics.
http://ideas.repec.org/a/aea/aecrev/v95y2005i2p346-351.html
http://ideas.repec.org/p/iza/izadps/dp1641.html
Sunday, August 10, 2008
Rubinstein on Neuroeconomics
"Lack of knowledge and uncertainty are swept under the rug. Colorful diagrams, which mean nothing to economists, are presented as clear evidence. To me, they look like a marketing gimmick like those used to sell a new product in the supermarket."
"A year ago, I challenged several ardent supporters of Neuroeconomics to show me even one Neuroeconomics paper that is likely to change Economics. I have yet to receive a satisfactory response."
"The grand vision of Neuroeconomics is to use the additional information obtained from brain studies, combined with the choice made by the decision maker, in order to better understand the deliberation process and to use the results to improve economic models. However, it is far from being clear if and how this can be accomplished."
http://arielrubinstein.tau.ac.il/papers/neuro.pdf
"A year ago, I challenged several ardent supporters of Neuroeconomics to show me even one Neuroeconomics paper that is likely to change Economics. I have yet to receive a satisfactory response."
"The grand vision of Neuroeconomics is to use the additional information obtained from brain studies, combined with the choice made by the decision maker, in order to better understand the deliberation process and to use the results to improve economic models. However, it is far from being clear if and how this can be accomplished."
http://arielrubinstein.tau.ac.il/papers/neuro.pdf
Friday, August 01, 2008
Brainless Economics?
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
"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
Friday, August 24, 2007
Neuroeconomics and Ageing
The U.S. National Institute for Ageing seem quite interested in neuroeconomics and are offering grants for research in the area.
Some documents from their site:
Neuroeconomics and Ageing: Directions for research- Commentry by Camerer, Loewenstein, Slovic, Cacioppo...
Neuroeconomics workshop- commentry from leading academics
Some documents from their site:
Neuroeconomics and Ageing: Directions for research- Commentry by Camerer, Loewenstein, Slovic, Cacioppo...
Neuroeconomics workshop- commentry from leading academics
Monday, May 14, 2007
It's not what you do, its the way that you do it
Are models and data on choice processes useful as a complement to revealed preferences in decision theory?
Benhabib and Bisin (2007).
Benhabib and Bisin (2007).
Saturday, May 12, 2007
RESPONSE TO FINANCIAL LOSS PARALLELS PAIN
People process information about financial loss through mechanisms in the brain similar to those used for processing physical pain, according to a new imaging study. The results could provide a new understanding of excessive gambling.
The new study detected activity in the striatum, a region that processes signals in the brain's system of reward and defensiveness. Previous studies had shown activity in the striatum increasing when subjects were awarded money, but falling silent when subjects lost money. The new study's lead author, Ben Seymour, MD, and colleagues at the Wellcome Trust Center for Neuroimaging in London suggest that the negative value people associate with losing money stems from an evolutionarily old system involved in fear and pain. This could provide some biological justification for the popular concept of "financial pain." Their study was published in the May 2 issue of The Journal of Neuroscience.
The new study detected activity in the striatum, a region that processes signals in the brain's system of reward and defensiveness. Previous studies had shown activity in the striatum increasing when subjects were awarded money, but falling silent when subjects lost money. The new study's lead author, Ben Seymour, MD, and colleagues at the Wellcome Trust Center for Neuroimaging in London suggest that the negative value people associate with losing money stems from an evolutionarily old system involved in fear and pain. This could provide some biological justification for the popular concept of "financial pain." Their study was published in the May 2 issue of The Journal of Neuroscience.
Wednesday, January 31, 2007
Understanding individuals’ decisions about vaccination: a comparison between Expected Utility and Regret Theory models
| By: | M Zia Sadique .John Edmunds,Nancy Devlin,David Parkin |
| URL: | http://d.repec.org/n?u=RePEc:cty:dpaper:0503&r=cbe |
| This paper proposes two new theoretical models for examining individual decision-making regarding vaccination. In each case, individuals’ decisions are modelled as a binary choice (i.e. to accept or to reject an invitation to receive vaccination) which are a product both of the perceived risk of the preventable disease in question and of the perceived risk of adverse side effects of the vaccine itself. Individuals decisions are modelled in two ways – first, as expected utility maximising and second, as regret minimising – and the results compared. In both cases, the decision to vaccinate is explained by a threshold condition with respect to the risk of remaining exposed to the disease by rejecting vaccination, and the risk of experiencing adverse events from vaccination itself. Regret-averse individuals have a higher threshold – suggesting a lower propensity to vaccinate than that suggested by the expected! utility | |
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