neuroeconomics Flashcards
What is Neuroeconomics?
Neuroeconomics combines neuroscience and economics to study the biological micro-foundations of economic decision-making, including how the brain processes value, risk, trust, and social preferences.
How does Neuroeconomics differ from standard Economic models?
Standard economic models are ‘black box’ and work ‘as if’ people are rational. Neuroeconomics observes actual brain processes, helping explain why people deviate from rational models.
What are the two types of brain systems in the Multiple Systems Hypothesis?
The Affective system is fast, unconscious, impulsive and effortless. The Analytic system is slow, conscious, deliberate, and effortful, used for forward-looking and self-regulatory tasks.
What are some common neuroeconomic research methods?
fMRI, EEG, TMS, pharmacological manipulation (e.g. oxytocin), animal models, patient studies, and biomarkers like digit ratios (2D:4D).
What did Sanfey et al. (2003) find in their Ultimatum Game study?
They found that unfair offers activated the anterior insula (emotion/disgust) and DLPFC (cognitive control). Stronger insula activation predicted rejection of unfair offers, showing emotional influence in economic decision-making.
What brain areas were associated with emotional and cognitive processing in Sanfey et al. (2003)?
Anterior insula (negative emotion like disgust) and DLPFC (goal-directed behaviour). Activation in these areas explained acceptance/rejection of unfair offers.
What did Kosfeld et al. (2005) find about oxytocin and trust?
Oxytocin increased trust in a trust game but not in a matched risk game, showing its effect is specific to social trust. 45% of oxytocin group showed maximum trust vs 21% in placebo.
Why did Kosfeld et al. (2005) use a risk experiment as a control?
To show that oxytocin affects social trust rather than general risk-taking. No difference between oxytocin and placebo in the risk task supports this.
What did Coates et al. (2009) find about 2D:4D digit ratios and trader success?
Lower 2D:4D (longer 4th digit, more prenatal testosterone) predicted greater profits among high-frequency traders. Suggests biological traits affect economic performance in fast-paced environments.
What was the implication of McClure et al. (2004) on intertemporal choice?
They found that immediate rewards activated β systems (limbic regions), while delayed rewards involved δ systems (lateral prefrontal cortex), showing separate neural systems govern short- and long-term preferences.
How did McClure et al. (2004) test neural responses to time preference?
They used fMRI while subjects made choices between smaller-sooner and larger-later monetary rewards. Immediate rewards activated limbic areas more, supporting the β–δ dual-system hypothesis.
