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Neuroeconomics: Biotech Meets Economics

Posted by michael on from the neuromancer dept.

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."

4 of 157 comments (clear)

  1. Simillar business models already in use. by Anonymous Coward · · Score: 4, Insightful
    The article mentions: "People tend much to prefer, say, $100 now to $115 next week, but they are indifferent between $100 a year from now and $115 in a year and a week. "

    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? :)

  2. Re:gah.. by incast · · Score: 4, Insightful

    Economics and the existance of the economy is based on exchange, not greed. Economics is the study of choice and policy within a given theoretical framework, not the study of greed with the implicit assumption of taking from the have nots. Once/when we "truly understand the mind," the economy will simply be better, not obsolete.

    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).

  3. Re:gah.. by incast · · Score: 4, Insightful

    Your point is well-taken, but it's an issue of definition. "Greed" has a negative connotation.. it implies a one-sidedness to a transaction, or one party using their market power to exploit another. What fuels exchange is differences in prices and preferences -- the fact that you and I value things differently.

  4. Re:gah.. by cynic10508 · · Score: 4, Insightful

    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?

    Well, economics is a social science. As such, it most likely will never rest upon firm rules such as those in the natural sciences. Cognitive science won't provide those rules because it merely describes the brain's functionality on a neural level. But quite frankly, humans are not the sum of our neural activity (to take from another school of psychology, Gestalt). If we view consciousness as an emergent property like John Searle does then the inability to make this correlation becomes clear.

    Summary: looking at the brain won't create miralculously successful economic theories/"laws".