Neuro-Finance and Neuro-Economics Flashcards
neuro-econonomics and neuro finance are merging research fields. define what they are and evaluate their contribution to Behaviroual finance. You should comment on the study by Sapra and Zak (2008) in your discussion.
Neuro-finance and Neuro economics are emerging research fields that use techniques from neuro science, such as brain mapping, to study economic and financial decision making.
these fields aim to better understand the neural mechanisms underlying decision making and how they are influenced by psychological, emotional and cognitive factors.
one of the key contributions of neuro economics and neurofinance to Behaviroual finance is their ability to provide a more detailed understanding of the neural bias of decision making. by using brain imaging techniques such as the functional magnetic resonance imagine (Fmri), researchers in their fields can observe the specific brain regions that are activated when people make economic and financial decisions. this allows them to identify the neural mechanisms that are involved in decision making and how they are influenced by psychological factors.
one study that has made an important contribution to this field is a paper by Sapra and Zak (2008). in this paper, the authors used Fmri to study the brains neural basis of trust in economic interactions. they found that trust activates the brains reward system, which suggests that trust has a positive emotional value for people. in addition they found that trust activates the prefrontal cortex, which is associated with decision making, suggesting that trust plays an important role in decision making.
