The Brain as a Hierarchical Organization

Juan D. Carrillo and Isabelle Brocas

No 5168, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We model the brain as a multi-agent organization. Based on recent neuroscience evidence, we assume that different systems of the brain have different time-horizons and different access to information. Introducing asymmetric information as a restriction on optimal choices generates endogenous constraints in decision-making. In this game played between brain systems, we show the optimality of a self-disciplining rule of the type 'work more today if you want to consume more today' and discuss its behavioural implications for the distribution of consumption over the life-cycle. We also argue that our split-self theory provides 'micro-microfoundations' for discounting and offer testable implications that depart from traditional models with no conflict and exogenous discounting. Last, we analyse a variant in which the agent has salient incentives or biased motivations. The previous rule is then replaced by a simple, non-intrusive precept of the type 'consume what you want, just don't abuse'.

Keywords: Neuroeconomics; Dual self model (search for similar items in EconPapers)
JEL-codes: D82 Z0 (search for similar items in EconPapers)
Date: 2005-08
New Economics Papers: this item is included in nep-evo and nep-hpe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Journal Article: The Brain as a Hierarchical Organization (2008)
Working Paper: The Brain as a Hierarchical Organization (2007)
Working Paper: The Brain as a Hierarchical Organization (2006)
Working Paper: The Brain as a Hierarchical Organization (2005)
Working Paper: The Brain as a Hierarchical Organization (2005)
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