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Neuroeconomics
Business Week makes the bold proclamation that "The study of neuroeconomics may topple the notion of rational decision-making." Yeah, right. We've heard this all before, as "behavioral economics"--a form of economics that acknowledges the obvious: that emotions affect one's economic decisions. Though advertising and marketing have relied on emotions for over a century, mainline economics has always refused to acknowledge the role of emotions because doing so would undermine the basis of free-market economics (in other words, the idea that the market is the perfect arbiter of society's interests). Behaviorial economics is clearly more realistic than the classical model, but political forces so overwhelmingly disfavor it that it's a wonder Business Week even mentions it. (Though perhaps neuroeconomics--with its "scientific" dressing--sounds more palatable than "behavioral.")
Posted by Carrie McLaren on 04/03/2005 | Permalink
Comments
Hi Carrie. I guess because it's Business Week they focus on the economics side of things, but as far as I know this research really comes from psychologists studying decision-making. The psychological research is at least 30 years old but in the 1990s it started to catch on in economics. Really, though, economics is only a small subset of decision-making; see here for example: http://www.dangoldstein.com/dsn/
Posted by: Andrew Gelman | Apr 5, 2005 9:05:40 PM
