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Neuroeconomics: Biotech Meets Economics
grimiore1 writes "The Economist has a story today introducing the concept of Neuroeconomics, which uses brain scanning technology and neuroscience to create new economic models and theories."
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When we truly understand the mind, will we really need an economy? Cognitive science is a field I find myself interested in. As such, I've often pondered what society will do when we've unlocked the secrets of the mind. Now I know...
How can the greedy be phased out? How much does one man need?
Interestingly, the guys doing the 'cash your paycheck now' seem to have already tapped into this insight.
Even people who need the cash now would often be better off just telling their landlord they'd be late - yet these check-cashing places (that do almost exactly that $100 now vs $115 in a week) do well.
Wonder how they figured this out without brain scanning? :)
I don't really think so. All that they really are doing is showing that our thought processes are largely governed by our desire to survive. By increasing the amount of money, the researchers pretty much told the subjects minds that they are being more successful in their environment -- just a positive feedback system increasing survival chances of the subject. I dunno, this research doesn't really prove anything.
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Applaud the next vague money landgrab...
This work is valuable. The tradition of individual choice in economics has been pretty much based on two approaches until recently. The first approach has largely been one of a bunch of people saying to each other "this seems reasonable doesn't it?" and when enough of them answer "yep", it goes into the theory. The second approach is an attempt to be hardcore scientific and positivist, which basically meant you couldn't put anything in the theory which smacked of knowing how a person felt about anything.
Those two approaches balanced each other out OK, but it obviously leaves things incomplete. Experimental economics in general and neuroeconomics in particular takes things out of that purely thinking-about-it realm and starts to make it empirical. That's mighty cool.
On the other hand, the article was terribly lax in what it considered economics. "Economics" can cover a lot of ground, but reducing it to psychology or cognitive science is counterproductive. Economics is properly about interactions between people, often very large groups of people. Identifying what happens in someone's brain when they think about expected values--or even when they're playing a game with someone else--only tells you about the individual, not the system.
An important part of economics is in describing the individuals, who are usually treated as the "atoms" of an economic system. But economics is more importantly about what happens when you throw a lot of them together, which will still require a lot that you can't get from brainscans.
And a rather sad and relevant example of how many humans do NOT compute the expected value of future events is the freemarket-free trade-libertarian computer/engineering geeks, and how they all seem to think THEY will be rich, and so unionizing or similar organizing is not needed for their occupation
I dont think most libertarians or free-market geeks believe they will become rich or wealthy. I don't quite get where you think that.
This type of personality/age group is typically quite illogical when it comes to calculations of a personal economic nature.
Pot Kettle Black.
I refer you to their historical inclination to be exploited as fodder for the for military-industrial complex profits machine.
Libertarians tend to oppose military industrialization.
You don't make sense.
- You can get a lot of results with just ordinality. (Note you can get these same results with cardinality, you just don't always need it.)
- Economists like to think of themselves as scientific, which often gets interprested as positivistic, and want to avoid making unfalsifiable assumptions.
So, one of the potential boons of neuroeconomics is what you point out: it can empirically start filling in gaps where economists have been avoiding making assumptions. It's possible that might include starting to use cardinal values where before only ordinal were used. It might even get radical into interpersonal comparison of utility. Hopefully it won't jsut be a boondoggle.IANA neuroscientist...
I am.
1. fMRIs don't have very high resolution (not much less than 100 cubic millimeters per voxel)
Compared with other brain imaging techniques, fMRI has excellent spatial resolution. Where it is lacking is that is has relatively poor temporal resolution - since you can only take a scan every 2 seconds or so (if you are scanning the whole brain) then you can't get very fine information about temporal dynamics.
2. They measure blood flow, which might be related to where the "thinking" in the brain is most intense, but who's to say that the "real work" isn't happening somewhere else by a smaller number of less blood-consuming neurons.
Years of research. The connection between blood flow and increased neural activity is fairly well established.
3. Brain scans only show correlation, not causation- We might be able to say that certain brian activity and behavior seem to be connected, but you never know whether an uncontrollable "third variable" might be mucking up the results (note how these experiments involve some math- maybe the brian regions are just showing activity because of math calculations?)
I'm not sure what the criticism is here. In any scientific experiment, you manipulate one variable and examine it's effect on some measurement, in this case blood oxygenation in the brain. No one experiment answers all the questions.
There seems to be a lot of grant money out there for people who say "hey! I know! let's research X by sticking people doing X in a brain scanner!"
Not enough! It's quite expensive to do fMRI and federal funding from NSF is decreasing. It's not really as if people are throwing money around - grants are very competitive.
The result doesn't have to be a perfect model, just a more accurate model. If you think our models are currently only 75% accurate, then if this can boast them to 80% great. Maybe we'll make that many more people's lives better. I think they are also dealing along the lines of demand side microeconomics and not monetary policy macroeconomics. Yes they influence eachother, but it seems unlikely people the majority of the population will have any feeling other than bordeom with questions about the Reserve Bank's monetary policy.
For example, the idea that humans compute the "expected value" of future events is central to many economic models.
Humans may not do this on an individual basis, no. However, pretty much everyone who makes an economic decision attempts to do this, be it through guessing, heuristics, or with a spreadsheet. The interesting thing about markets is that they collect and aggregate all these decisions together and produce a very accurate result.
That's why, even though people may act without full logic and with error, markets tend to be efficient.
The pro-fmri bias is infuriating really.
The entire field of neuroscience is being slowly dragged into fMRI research because the money is there. And the money is there because brain pictures are pretty, so people who don't understand the underlying science are eager to throw money at the method. That's the really sad thing, an entire field of research is being corrupted because of aesthetics.
Every day valuable non-fMRI methodologies are thrown out the window in favor of crippled methods that are scannable because magnets are being built like Starbucks throughout the world. Inside a magnet, your experimental options are very limited compared to outside.
And for what? it's not as if knowing what part of the brain lights up tells you about how the brain is doing that thing. This article is an excellent example of the layperson naivete that feeds the fMRI cash-cow. Scientists have known about these failings of human decision making for many years. The idea that we are flawed at rational decision making is hardly news. But throw someone in a scanner, see part X light up and suddently we understand how the brain works?
Bollocks.
These imaging studies are useful yes, especially in the context of other things we know about what different parts of the brain do.
But they do not represent some bold (heh) new understanding of "neuroeconomics", which is just decision making theory and neuroscience given a fancy name.
This isn't inconsistent with the idea of "how much one man needs." Indeed, with perfect information, we might be able to do better in allocating income in a more "fair" way (I'll leave it to the reader to determine what "fair" is).
Sorry, I'm not trying to be mean. In theory, this would a great way to efficiently allocate resources, assuming that we were ants or individual "cells" in some sort of overall body, similar to the Gaia planet in one of Asimov's books (why can't I remember which one?).
The problem with this idea is the same problem that exists for any kind of pure socialism. We are human beings and too many human beings are abysmally selfish.
The main problem that I have with this kind of technology is that it will be used as yet another way for people in positions of power to control other people. It is part of the perennial problem of the advancement of science. Most of the people who work to advance the overall knowledge of the human race tend to be idealists. Then, when new toys have been developed by engineers, arrogant and powerful people use them to control others or to enrich themselves, all the while thumbing their nose at the very people who helped create them. When they get their new toys, it is like giving them to a barbarian who then goes "look what Grog do with big boom-stick!"
So anyway, while it is interesting to advance the overall understanding of the mind, some people are just going to use this to make the world worse for everyone else.
Similar to the upcoming US election results