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Neuroeconomics Evidence for Decision-making Theory

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In this presentation, first it gives brief introduction to assumptions of Classical Decison-making Theory and also recently development in Decision-making field. Then it tells evidences from Neuroeconimics research supporting or objecting against assumptions of classicial Decision-making Theory, and at last it introduces a “Five-dimensional man” model based on research results which hilights the importance of personality traits acconting for intertemporal economics behavior.

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Neuroeconomics Evidence for Decision-making Theory

  1. 1. Neuroeconomics What have we found, and what should we search for By : XU Meiling Zhejiang University Aldo Rustichini . Current Opinion in Neurobiology 2009, 19:672–677
  2. 2. Neuroeconomics The application of conceptual structure and experimental techniques widely used in neuroscience to the study of economic behavior. An interdisciplinary field, crossing boundaries between Economics, Psychology, and Neuroscience Its original program was to provide a test for a large number of competitive theories of decision making This presentation: focus on the study of economic decision that a single agent takes in isolation
  3. 3. Assumption of Classical Decision Making Theory Two-dimensional man  Two parameters • Attitude to risk • Attitude to intertemporal tradeoff  One parameter in general • Utility Function
  4. 4. Theory development and Empirical Evidence Prospect Theory Abandoning integration assumption Three distinct assumptions A reference point Loss aversion Risk sensitivity Ellsberg Paradox Time inconsistency in planning Changing planning when evaluating options because of discounting rate change Systematic study of regret (Bell, Loomes & Sugden)
  5. 5. What we have learn Existence of a common currency fMRI & Single neuron recording in monkeys Goods-based value encoding instead of action-based Menu invariant---Firing rate independent of other options In sensory perception, neural activity codes a subjective response instead of objective properties Coding of economic value depends on the general context of a choice Tobler et al: Adaptive coding of dopamine neurons at the time of delivery of reward
  6. 6. Controversial topics
  7. 7. Five-dimensional man  Personality traits are very powerful in predicting economic outcomes Future: Theoryandexperimentaltesting

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