Neuroeconomics

From ArticleWorld

When making a choice, an individual evaluates the options, looks at the risks and rewards and interacts with others. The brain is involved in the process and the aim of neuroeconomics is to find out exactly how by applying neuroscience, psychology and economics. The novelty of the approach is the adding of the nervous system as a variable to be considered in behavioural economics.

Neuroscience is concerned with the nervous system in terms of senses and movement, economics studies the choices and decisions made by groups and individuals and psychology looks at thought and perception.

Neuroeconomics, on the other hand, studies the way neurons and biochemistry work during the making of personal decisions; it applies economic theories but focuses on the mental changes that occur when choices are made and the psychological aspect concentrates on the cognitive processes that lead to the understanding of the options available and to the choosing of one.

Applications

This combination of biology and human behaviour is a new approach but has already been applied in the legal process of proving guilt beyond a reasonable doubt and in the analysis of the demand for communication services. It is also considered likely to prove invaluable to the advertising industry in the near future.