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Science

The New York Times On Neuroeconomics 21

Posted by timothy from the say-hello-to-messrs-sterling-and-gibson dept.
ravenousbugblatter writes "The New York Times technology section has an article discussing the increasing attention that neurologists are devoting to the study of the human mind in relation to economics. It looks like John Nash's game theory could have yet another application."
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The New York Times On Neuroeconomics More

The New York Times On Neuroeconomics

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  • I must not be getting enough sleep. [slashdot.org]Either I'm brain-dead, or I have dead on the brain. I thought it said "The New York Times on Necroeconomics."
  • The article is in the Science section of NY Times.

  • Nash (Score:2, Informative)

    by mmport80 ( 588332 )
    It looks like John Nash's game theory could have yet another application.

    Wrong!

    As far as I understand Nashes approach was a wholey rational one.

    This neural science approach ackowledges that people aren't rational and tries to explain why.

    • Re:Nash (Score:4, Interesting)

      by Daniel Dvorkin ( 106857 ) on Wednesday June 18, 2003 @08:59AM (#6232799) Homepage Journal
      Yep. And for that reason, I predict, free market fundamentalists (Randoids et al.) are going to reject this research out of hand. "The market will take care of it" makes sense if and only if people act rationally. But because they do make decisions based on their guts instead of their heads, giant companies with shitty products and great P.R. end up ruling the day -- which the FMF's take as proof that the market is working! (Yes, kids, that's right. Britney Spears is the greatest singer ever. You need $300.00 shoes or you won't be able to walk. And you can't use a computer without Windows. Trust us.) In the current political climate, this research will be buried.
      • Actually the free market economists are still coming up with theories as to why advertising works, under their assumptions consumers should already know everything about all the products that are available. We use these assumptions because they work better than other assumption sets at predicting most consumer behavior. Companies with crap products and infinate marketing budgets should not have any sales under perfectly rational consumer behavior. Most economics research is focused on improving the model
    • Not only that, but game theory is not John Nash's invention. He did make fundamental contributions, but that was after things have started.

      The definition of game theory (i.e. the principle of min/max analysis) based on saddle points of convex functions is due to John von Neumann. Nash showed that in cetain cases when a von Neumann equillibrium do not exist, there might still exist (non-unique) weaker equillibria. This does not make game theory Nash's.

      Even though Kolmogorov's contributions to probability t
    • Well, game theory hadn't accounted for irrationality in the past, but I'd like to make three points. First, positing rationality is a wonderful baseline to evaluate actual behavior and it has been used very often for this very purpose e.g. this article: http://www.sscnet.ucla.edu/anthro/faculty/boyd/Ma c GamesBBSFinal.pdf Second, game theorists are increasingly incorporating bounded rationality into their game theoretic models. Third, the applications of game theory are not limited to rational actors. It

  • question (Score:3, Insightful)

    by kurosawdust ( 654754 ) on Wednesday June 18, 2003 @07:25AM (#6231946)
    at what point does this kind of research (and subsequent advertising that arises from it) become more like pulling levers on human money-machines (you WILL buy Alex Chiu's immortality rings...) and less like a free market proposition (I got these rings. Want em? Don't want em? OK.) ?

  • Neuroeconomics... (Score:2, Interesting)

    by t4eXanadu ( 143668 )

    This neural science approach ackowledges that people aren't rational and tries to explain why.

    Then that is their first very big mistake. I am totally amazed as the Scientists and Analytic Philosophers who are insistent that the world can be reduced to/ explained by/ etc., grand theories and laws which govern everything, including human behavior.

    Speaking of behavior, If you are familiar with Psychology, you would know that today we still do not know HALF as much as they like to claim. We are still as v

    • While I agree that this research will never be able to predict individual behavior - I disagree that we cannot derive laws of (group) behavior.

      We cannot determine when a particular radioactive atom will decay, but we can statistically predict how many will in a given population in a set time. I think this research might lead to a similar set of statistical rules for predicting the behaviors of human populations.

      (btw, I completely agree with you on the failure of modern Psychology to deliver what it promis

    • Re:Neuroeconomics... (Score:1, Interesting)

      by Anonymous Coward
      A Law is any useful heuristic. The labels we use for emotions are such heuristics. I don't know what you feel like when you are "angry", but I can make a reasonable guess. Human motives are certainly irrational as you suggest, but that doesn't mean that people are unpredictable. Hence the fact that marketing and great PR work in the first place. Which is, I think, what this is trying to say. As opposed to conventional market theory, which says rational decisions (transactions) are the driving factor b
    • Well, In regards to random behavior, suppose my choice of words was wrong, it obviously did not convey what I intended.

      Depending on who you ask, irrationality and (to avoid using random) let me say, irregular, behavior is not so irregular. If you ask the behaviorist, they can and will account for most of not all of human behavior, socially, private or otherwise.

      I am obviously supposed to take that on the strength of your say-so. Uh-huh.

      I did not mean to law out some absolute truth, but it is not unr

    • Re:Neuroeconomics... (Score:3, Informative)

      by NoData ( 9132 )

      I respectfully point you to the work of Kahneman and Tversky. Read Judgment Under Uncertainty. And Choices, Values, and Frames. Kahneman didn't win a Nobel Prize for not delivering on some very real principles of human behavior.

      There are patterns and principles to the kinds of irrationality humans exhibit. Psychology, exemplified in the work of Kahneman and Tversky, has made tremendous progress in characterizing how people behave. K & T's stuff has especial bearing on economic behavior which is the
  • Maybe someday they will figure out a way to plug somebody's head into the stockmarket.

  • I work in the area of developing risk management software for financial institutions. This type of software uses a statistical analysis of market data to provide greater insight and will hopefully allow the user to make more rational decisions.

    It will be interesting to see if, in the future, the use of software "agents" to help people make rational financial decisions will overcome the whole "gut feel" approach characterising the current decision making process and maybe lead to the so-called "efficient

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