Neuroeconomics: How Neuroscience Can Inform Economics
By: Colin Camerer, George Loewnstein and Drazen Prelec.
Nowadays the economic science has taken elements from other sciences, in this case neuroscience and its studies about brain functions en human behavior have influenced directly the way where the economics studies its related phenomena. Using the brains signals we can measure how it works and how the economic decision making is affected by these, we are talking about two processes; the first one is faster than conscious deliberations and is not based on normative axioms nor feeling of effort. The second one is highly influenced by emotions systems and cannot regulate the behavior appropriately. Neuroscience has developed several methods to measure the brain activity. The most popular of those is the Brain Imaging, which is divided in: Electro-encephalogram EEG, Positron Emission Photography PET and functional magnetic resonance imaging fMRI. But these last one are not the only ones, we also have the Single-Neuron Measurement, which consists in tiny electrodes inserted to the brain measuring the neuron’s firing-the limitation here is that the electrodes damage the brain, so this is restricted for nonhuman animals-; Electrical Brain Stimulation -restricted to animals as well- discovered that giving stimulations the subject will do the indicated task or activity just to win the stimulatory reward; Psychopathology and Brain Damage in humans can also help to understand behavior, because when the brain is damaged in X area (by mental illness, degenerative diseases of the nervous system,, developmental disorders and accidents or strokes) the subject will do some special tasks more poorly, so we can infer that area X is used to do this special task; Psychological measure is an old and simple technique, using indicators like heart rate, blood pressure, galvanic skid response and pupil dilatation, these...