Neuroeconomic Foundations of Economic Choice—Recent Advances

Abstract

Neuroeconomics combines methods and theories from neuroscience psychology, economics, and computer science in an effort to produce detailed computational and neurobiological accounts of the decision-making process that can serve as a common foundation for understanding human behavior across the natural and social sciences. Because neuroeconomics is a young discipline, a sufficiently sound structural model of how the brain makes choices is not yet available. However, the contours of such a computational model are beginning to arise; and, given the rapid progress, there is reason to be hopeful that the field will eventually put together a satisfactory structural model. This paper has two goals: First, we provide an overview of what has been learned about how the brain makes choices in two types of situations: simple choices among small numbers of familiar stimuli (like choosing between an apple or an orange), and more complex choices involving tradeoffs between immediate and future consequences (like eating a healthy apple or a less-healthy chocolate cake). Second, we show that, even at this early stage, insights with important implications for economics have already been gained.

Market User Interface Design

“…This suggests that the quantal response model was too simplistic to accurately predict user behavior. In future research, we will consider other behavioral models that are better supported by neuroeconomic experiments like the drift-diffusion model [Fehr and Rangel 2011]. In a subsequent decision analysis, we found that our model ignored important behavioral factors like loss aversion and position effects.…”

Search costs and adaptive consumers: Short time delays do not affect choice quality

“…Note that consistent with Fehr and Rangel (2011) in this paper I treat identifying the search process and estimating the utility models as two separable steps.…”

Process Evaluation of an Applied Neuroeconomics Extension Course in Consulting and Management Based on Kirkpatrick's Model

“…Although money is a convenient way to determine how much someone values a given resource, economics is a science that does not deal with money, but rather with the allocation of scarce resources (Zak, 2004). Economic models, in general, represent how individuals evaluate rewards and realize choices (Fehr & Rangel, 2011;Glimcher & Rustichini, 2004).…”