Economics Turns to Neuroscience for Answers
The brain is the latest frontier in economics. Economists are looking towards neuroscientists to tell them what part of the brain is associated with making financial decisions.Magnetic Resonance Imaging (MRI) is being used to identify the parts of the brain responsible for responding to economic decisions.In a game involving accepting or rejecting a financial deal, the dorsal stratium appears to be involved. In this game both participants need to reach an agreement about the division of a sum of money for either player to get a reward. The dorsal stratium was associated with reward and punishment behaviors in the studies involving the game. In other studies, dopamine release related to decisions of economic value or utility. We have come a long way from Francis Edgeworth's proposed creation of the "Hedonimeter" in the Victorian age or Frank Ramsey's later ideas about the "Psychogalvanometer". Both of these proposed devices were to measure the "inner workings of the brain" in a time when little was known about brain function. Joseph LeDoux, a Professor of Neuroscience at New York University and the author of "The Emotional Brain: The Mysterious Underpinnings of Emotional Life" (1996) may receive more than a passing footnote in the development of neuroeconomics through the application of neuroscience. The use of MRI, Transcranial Magnetic Stimulation and other techniques from neuroscience to the world of economic decision-making may help us get to a better basic understanding of how the brain functions in a very complex environment of analysis, risk and reward.
Who knows, we may learn where "rational behavior" is situated.Is it close to the area which governs the use of our Visa card?