Neuroeconomics is an emergent multidisciplinary field that strives to understand how and why humans make decisions. The field brings together behavioral methods and sophisticated computational theories from microeconomics, an understanding of emotional influences on behavior from psychology, and human functional neural imaging from neuroscience. This chapter presents the fundamentals of neuroeconomics, thus describing the concept of neuroeconomics; neuroimaging applications; neuroeconomics and loss aversion; neuroeconomics and temporal discounting; neuroeconomics of decision making in humans and animals; neuroeconomics, behavioral economics, and irrationality; neuroeconomics and utility theory; neural systems in economic decision making; neural systems in reward system; neural systems in cognitive control system; game theory, strategic interaction, and neuroeconomic studies; and the types of evidence about economic behavior.
TopIntroduction
Neuroeconomics is an interdisciplinary field that incorporates psychology, economics, neuroscience, and computational science to investigate how people make decisions (Sharp, Monterosso, & Montague, 2012), and Davis (2010) states that the field is a new research program in economics in virtue of its adoption of neuroscience as a basis for the investigation of economic questions. Neuroeconomics focuses its approach in identifying some neuronal correlations specific to choices (Sebastian, 2014), and is the newest area of the economic sciences focusing on how the human brain interacts with its institutional and social environment to make economic decisions (McCabe, 2008).
Zak (2004) forwarded that neuroeconomics is a natural extension of bioeconomics, and the former is the study of evolved mechanisms that are in decision making at the neural level of the brain (Vromen, 2007). The application of conceptual structure and experimental techniques widely used in neuroscience to the study of economic behavior (Glimcher & Rustichini, 2004), neuroeconomics includes the theoretical and methodological developments of cognitive neuroscience, computational neuroscience, psychology, and economics to accomplish the examinations of the brain processes when individuals make economically relevant decisions (Montague, 2007; Sanfey, Loewenstein, McClure, & Cohen, 2006).
The strength of this chapter is on the thorough literature consolidation of neuroeconomics. The extant literature of neuroeconomics provides a contribution to practitioners and researchers by describing a comprehensive view of the functional applications of neuroeconomics to appeal to the different segments of neuroeconomics in order to maximize the business impact of neuroeconomics in the decision-making process.
TopThe Fundamentals Of Neuroeconomics
This section describes the concept of neuroeconomics; neuroimaging applications; neuroeconomics and loss aversion; neuroeconomics and temporal discounting; neuroeconomics of decision making in humans and animals; neuroeconomics, behavioral economics, and irrationality; neuroeconomics and utility theory; neural systems in economic decision making; neural systems in reward system; neural systems in cognitive control system; game theory, strategic interaction, and neuroeconomic studies; and the types of evidence about economic behavior.