Goals, Methods, and Progress in Neuroeconomics

Colin Camerer (camerer@caltech.edu)

Annual Review of Economics, 2013, vol. 5, issue 1, 425-455

Abstract: Neuroeconomics shares the main goals of microeconomics: to understand what causes choices, and the welfare properties of choice. The novel goal is linking mathematical constructs and observable behavior to mechanistic details of neural circuitry. Several complementary methods are used. An initial insight from neuroscience is that distinct systems guide choice: Pavlovian and instrumental conditioning (learning) of state-value and response-value associations, overlearned habits, and model- (or goal-) directed value that requires deliberation. These systems can differ economically from rational choice—for example, habitual choices have low utility and price elasticities, whereas model-directed values are often constructed preferences. Neuroeconomics also provides evidence of situations in which utility maximization either works well (in simple binary choice) or benefits from the introduction of behavioral constructs. Neuroeconomics is well equipped to guide the theory of how choices depend on mental states, such as fear or cognitive load. Examples include extensive studies of risk and time preference, finance, and neural decoding of private information.

Keywords: fMRI; behavioral economics; neural circuitry; emotion; reward (search for similar items in EconPapers)
JEL-codes: C90 D03 (search for similar items in EconPapers)
Date: 2013
References: Add references at CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://www.annualreviews.org/doi/abs/10.1146/annurev-economics-082012-123040 (application/pdf)
Full text downloads are only available to subscribers. Visit the abstract page for more information.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:anr:reveco:v:5:y:2013:p:425-455

Ordering information: This journal article can be ordered from
http://www.annualreviews.org/action/ecommerce

Access Statistics for this article

More articles in Annual Review of Economics from Annual Reviews Annual Reviews 4139 El Camino Way Palo Alto, CA 94306, USA.
Bibliographic data for series maintained by http://www.annualreviews.org (ai@annualreviews.org).