Neuroeconomics

In: Business and Management

Submitted By cleopatrazeyez
Words 2764
Pages 12
The development of neuroeconomics has provided a new a fascinating ways of engaging conventional economic theories. This essay seeks to outline what neuroeconomics is and how it has been received by its critics and proponents. It will provide examples that neuroeconomics can shed light on that conventional economics has struggled to explain. This essay will also outline key assumptions in neuroeconomics and how they vary from standard economics. It will address the global financial crisis from a neuroeconomic point of view and finally it will offer real world applications for the insights neuroeconomics offers.

Neuroeconomics is the name that has been given to the latest generation of study in the field of economics. The field of economics has seen a number of developments in recent times as scholars have sought to use other disciplines to further illuminate economic theories. Psychology has been tried but over the last decade the focus has shifted to the more scientifically measurable field of neuroscience. The result is a new area of study that seeks to clarify and correct many of the previously unmeasurable assumptions about the way humans make economic decisions.

While this new field of neuroeconomics has seen many papers on the topic published, not all scholars agree. Ariel Rubinstein makes an interesting observation. "The rise of neuroeconomics is coming at a point in time when economic theory is not producing any exciting insights." (2008, p.485) Rubinstein critiques the field on several levels and questions what will actually come from this field, before indicating that neuroeconomics may one day make a valuable contribution to the field of economics. (2008, p. 493) Gul and Pesendorfer (Caplan and Schotter, 2008, p.4) contend that neuroeconomic critiques of economics theory have misunderstood the flexibility of conventional economic models.…...

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