Post by Alexandre Denuit on Apr 19, 2016 5:19:04 GMT
In the article "Do economists need brains?", we are introduced with the concept of neuroeconomy. As the word itself suggests, the latter incorporates neuroscience to economy. In other words, this discipline seeks to understand economic models, decisions, concepts, etc. from neuroscience’s point of view. That is using an MRI to see what happens in the brain when making a decision about finances for instance. The emergence of the discipline can be justified by the illogical decisions made by human beings in economics-related situations. The example given in the article is that of the “ultimatum game, in which a player proposes a division of a sum of money between himself and a second player. The other player must either accept or reject the offer. If he rejects it, neither gets a penny.” The rational decision in this game would be for the second player to always accept money, as he is better off with an amount (even if really small) than with nothing. However, results of this experiment have shown that some players prefer getting nothing and punish the first players when they offer an unfair split. This “irrational” phenomenon cannot be explained by simple economic theories which is why neuroeconomics has its importance today. People’s behaviors are very difficult to understand because they are not self-interested only. I think this article indirectly touches upon the mind/matter debate and supports the existence of a psychic force that pushes us to make certain decisions. This can be understood when the author talks about the importance of studying the homo-sapiens rather than the homo-economicus when talking about economics. If human beings’ actions were solely dependent on mechanisms inside our brain, we would be able to predict them because they would follow a somewhat logical pattern, and the study of the homo-economicus would correlate perfectly with economic theories.
Even though neuroeconomy seems to be a step in the right direction to have a better understanding of the social science, is it enough? As I mentioned before, this debate is very similar to the mind/matter one. And just like I think neuroscience will never be enough to explain consciousness, I think that neuroeconomy is not enough to explain concepts in economy. What do you think?
Furthermore, how do you think a definite, conclusive answer affect the actual economy? Should we want a precise and definite answer to how the economy works? If we come up with a complete theory of why and how economic-related choices and phenomena happen, would that not destroy our economy? I think that the existing uncertainty is what makes evolution possible because there is always room for improvement. If that disappeared, wouldn't everything be predictable which would freeze the economy?
Even though neuroeconomy seems to be a step in the right direction to have a better understanding of the social science, is it enough? As I mentioned before, this debate is very similar to the mind/matter one. And just like I think neuroscience will never be enough to explain consciousness, I think that neuroeconomy is not enough to explain concepts in economy. What do you think?
Furthermore, how do you think a definite, conclusive answer affect the actual economy? Should we want a precise and definite answer to how the economy works? If we come up with a complete theory of why and how economic-related choices and phenomena happen, would that not destroy our economy? I think that the existing uncertainty is what makes evolution possible because there is always room for improvement. If that disappeared, wouldn't everything be predictable which would freeze the economy?
