What is neuroeconomics

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A presentation of neuroeconomics

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What is neuroeconomics

  1. 1. Neuroeconomics: A science is born Benoit Hardy-Vallée Department of Philosophy University of Waterloo http://bhv.direct.to Benoithv@gmail.com
  2. 2. Neuroeconomics? • The study of the neural mechanisms of decision-making and their economic significance • Concept • Word • Paradigm/research program
  3. 3. A concept • Definition: The study of the neural mechanisms of decision-making and their economic significance. • Value (economics) and reward (neuroscience)
  4. 4. – "an emerging transdisciplinary field that uses neuroscientific measurement techniques to identify the neural substrates associated with economic decisions” (Zak, 2004, p. 1737) – “Economics, psychology and neuroscience are converging today in to a single unified discipline with the ultimate aim of providing a single, general theory of human behavior. (…) The goal of this discipline is thus to understand the processes that connect sensation and action by revealing the neurobiological mechanisms by which decisions are made". (Glimcher & Rustichini, 2004, p. 447)
  5. 5. A brief history • Prehistory: (Hayek, 1952) “The Sensory Order” : how the sensory order (mind) leads to social order (society) • Late Antiquity: Connectionism, Artificial Neural Networks (‘90s) • Renaissance: (Damasio, 1994; Damasio et al., 1996; Shizgal, 1997) • Modern times: (Platt & Glimcher, 1999),(McCabe et al., 2001) (Glimcher, 2003a)
  6. 6. The paradigm (I) Social development • Conferences: – Neurobehavioral economics (Carnegie-Mellon University, 1997) – Neural economics (Princeton University, 2000) – Neuroeconomics (University of Minnesota, 2002) – NeuroPsychoEconomics Conference (Muenster, Germany, 2005) • Encyclopedia entries: – McCabe, Kevin, 2003, "Neuroeconomics," Encyclopedia of Cognitive Science. • Book: Glimcher book (2003)
  7. 7. • Societies: – The Society For Neuroeconomics (incorporated in 2005) – Association for NeuroPsychoEconomics (2004) • Journals: – NeuroPsychoEconomics, ISSN 1861-4523 (2006) – Games and Economic Behavior, Volume 52, Issue 2, (2005) Special Issue on Neuroeconomics – Brain Research Bulletin, Volume 67, Issue 5, (2005) – Neuron, Special Review Issue on Reward and Decision, (2002) • Research Labs: – Center for the Study of Neuroeconomics, George Mason University (2004) – Stanford Necon Lab (2004) – Camerer Lab, Caltech – Center for the Study of Neuroeconomics (P.J. Zak) – Duke Center for Neuroeconomic Studies – Glimcher Lab (1994)
  8. 8. The paradigm (II): Conceptual development • Economics: • The “science which studies human behavior as a relationship between ends and scarce means which have alternative uses” (Robbins, 1932). • Bioeconomics • Experimental/behavior al/cognitive economics • Ethology/behavioral ecology • Behavioral & cognitive psychology • Neuroscience • Computer science • Business/marketing
  9. 9. First neuroeconomics experiments • Decision theory: – Platt, M. L., & Glimcher, P. W. (1999). Neural correlates of decision variables in parietal cortex. Nature, 400(6741), 238. • Game theory – McCabe, K., Houser, D., Ryan, L., Smith, V., & Trouard, T. (2001). A functional imaging study of cooperation in two-person reciprocal exchange. PNAS, 98(20), 11832-11835.
  10. 10. encode the desirabilities of making particular movements.
  11. 11. • LIP Firing Rate Varies with Desirability during Instructed Trials • LIP Firing Rate Correlated with Dynamic Estimate of Relative Subjective Desirability QuickTime™ and a TIFF (LZW) decompressor are needed to see this picture. (Glimcher, 2001)
  12. 12. McCabe, K., Houser, D., Ryan, L., Smith, V., & Trouard, T. (2001).
  13. 13. • “we find that regions of prefrontal cortex are more active when subjects are playing a human than when they are playing a computer” • “cooperation requires an active convergence zone that binds joint attention to mutual gains with sufficient inhibition of immediate reward gratification to allow cooperative decisions.”
  14. 14. “neuroeconomics” • First appearance: – (Warrend D. Tenhouten, 1991) “Into the wild blue yonder: On the emergence of the ethnoneurologies -- the social science-based neurologies and the philosophy-based neurologies”. Journal of Social and Biological Systems, 14(4), 381-408. – Neuroeconomics is here defined as the study of the neural substrates, and associated mental phenomena, of productive and consumptive economic and socioeconomic behavior. (pp.390) • First appearance in the paradigm: Glimcher (2002) announcing his 2003 book – Glimcher, P. W. (2002). Decisions, decisions, decisions: Choosing a biological science of choice. Neuron, 36(2), 323-332.
  15. 15. Occurences • Progression: (Source: Pubmed, Scopus and ScienceDirect, duplicates deleted) • 2002: 1 • 2003: 2 • 2004: 15 • 2005: 30 • 2006: 28 • 2007: 6 (Jan. 24) • candidate for the Webster’s Dictionary Word of the Year for 2006
  16. 16. says: • 476,000 neuroeconomics • 216,000 neuroethics • 147,000 neurophilosophy • 20,400 neuropolitics • 660 neurosociology • 12 neurojurisprudence
  17. 17. Other results • “Moral Disgust” in the Ultimatum Game – Sanfey, A. G., Rilling, J. K., Aronson, J. A., Nystrom, L. E., & Cohen, J. D. (2003). The neural basis of economic decision-making in the ultimatum game. Science, 300(5626), 1755-1758. – AI, DLPFC, ACC implied – Only for humans partner – Also measured by skin conductance
  18. 18. • “Limbic grasshopper” and “prefrontal ant”. – McClure, S. M., Laibson, D. I., Loewenstein, G., & Cohen, J. D. (2004). Separate neural systems value immediate and delayed monetary rewards. Science, 306(5695), 503-507. • Explanation of preferences (ex: Coke vs. Pepsi) – McClure, S. M., Li, J., Tomlin, D., Cypert, K. S., Montague, L. M., & Montague, P. R. (2004). Neural correlates of behavioral preference for culturally familiar drinks. Neuron, 44(2), 379-387. • Oxytocin – Zak, P. J., Kurzban, R., & Matzner, W. T. (2005). Oxytocin is associated with human trustworthiness. Horm Behav, 48(5), 522-527. – Kirsch, P., Esslinger, C., Chen, Q., Mier, D., Lis, S., Siddhanti, S., et al. (2005). Oxytocin modulates neural circuitry for social cognition and fear in humans. J Neurosci, 25(49), 11489- 11493. – Kosfeld, M., Heinrichs, M., Zak, P. J., Fischbacher, U., & Fehr, E. (2005). Oxytocin increases trust in humans. Nature, 435(7042), 673-676. • TD learning and Dopamine – Tobler, P., Fiorillo, C., & Schultz, W. (2005). Adaptive coding of reward value by dopamine neurons. Science, 307(5715), 1645. – Schultz, W. (2001). Reward signaling by dopamine neurons. Neuroscientist, 7(4), 293- 302. – Bayer, H. M., & Glimcher, P. W. (2005). Midbrain dopamine neurons encode a quantitative reward prediction error signal. Neuron, 47(1), 129. • PD and the “warm glow” of cooperation – Rilling, J., Gutman, D., Zeh, T., Pagnoni, G., Berns, G., & Kilts, C. (2002). A neural basis for social cooperation. Neuron, 35(2), 395-405.
  19. 19. Trust Game A. (Y$) B. (Y$) x$ x 3= x$ 3x$ 1. 2. A. (Y-x $) B. (Y + 3x$)  Z$ A. (Y-x)+Z $) B. (Y + 3x) –Z $) 3.
  20. 20. Theoretical issues • “Optimality Optimism” • “Moral Madness” • Economic and neuroscientific perspective (on vs. manys sytem) • Normativity?
  21. 21. Homo (Neuro)Economicus?
  22. 22. Evolution? • Standard View – Neural rationality or irrationality • Adaptive View – Reverse engineering: cui bono?
  23. 23. “Natural Rationality” observational constructive Normative Descriptive

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