What do neuroscientists think of neuroeconomics

How biology and economics explain our behavior

Endless decisions: Whether it is about consumers, companies or governments, the economy tries to model decision-making behavior. Everyone sees themselves confronted with countless decisions on a daily basis. While not all of them are life changing, they keep our brains busy.

What exactly happens in our heads when we decide? Do the processes correspond to what the economy claims? In order to investigate this, a new couple has come together in the research landscape: The discipline of neuroeconomics has emerged from the combination of economics and neuroscience, a branch of biology. prisma spoke to Philippe Tobler (picture below), Assistant Professor for Neuroeconomics and Social Neuroscience. He conducts research at the University of Zurich, which has made a name for itself in this young field of research.

Mr. Tobler, what is neuroeconomics?

Neuroeconomics has emerged in the last decade. It examines what is going on in the brain when you make a decision. Specifically, it is about decisions that are based on values. Neuroeconomists combine economics with neuroscience, psychology and computer science. The methods are diverse: we use imaging techniques, for example, that show which areas of the brain are particularly active in certain situations. We can also analyze how test subjects react when certain areas of the brain are stimulated or how patients behave when brain structures are damaged. We summarize our hypotheses and findings in formal economic or psychological models.

How does neuroeconomics relate to other areas of economics?

It is close to micro and behavioral economics. Meanwhile, there are also approaches to macroeconomic issues. An important distinction to behavioral economics, however, is that neuroeconomics focuses on actual biological processes. It is not a question of whether a model parameter is maximized, but rather the activity in a particular brain area. Of great interest for my work are, among other things, cells that release dopamine or the ventromedial prefrontal cortex, which is located in the brain, behind the eyes. These structures play a role in our motivation, for example.

Who will benefit from neuroeconomics?

In practice, it is primarily medicine that is currently benefiting. Many mental illnesses affect decision-making, such as obsessive-compulsive disorder, schizophrenia, or drug addiction. Ultimately, however, decisions are present everywhere in everyday life.

Although I work with psychiatrists, my research is primarily basic research. Our vision is to understand exactly decision mechanisms based on neural foundations so that we can derive models from them. These should allow precise predictions and in general application no longer depend on looking people in the brain - an improved standard economic model.

Do companies also benefit? In the media, for example, one reads again and again about neuromarketing - the use of neuroscientific knowledge to increase sales.

From my point of view, neuromarketing is a long way off, but little has really been proven at the moment. So you have to be careful not to get caught up in false promises.

Personally, I once had a collaboration with industry. It was about how to effectively convey environmental conservation messages. Often you know what would actually be good in the long term. The question then is how the various motives are weighed up and how one can strengthen the long-term versus the short-term. In our case, we looked at how strongly different types of presentation activated these different motifs and the corresponding areas of the brain.

Could companies also stimulate brain areas of employees or customers directly, perhaps without their knowledge? Do we soon have to expect to inhale trustworthy hormones from the investment advisor?

That would be original - but no, you don't have to worry about that for now. To get an effective dose, you would have to be given a powerful nasal spray, you would notice. It is different in therapy, because a patient wants to take an active ingredient because he hopes that he will get relief. As for other methods: in the laboratory, controlled stimulation can cause behavioral changes. An example: people who were stimulated accordingly drove with less risk in the driving simulator, they drove less close or stopped at Orange. However, a lot of equipment is required for this! You couldn't do something like that in everyday life without you noticing something. What companies are already doing today, at the behavioral level, is much more subtle, for example where the products are on the shelf.

On the subject of risk: You have done a lot of research on it. Some brain regions influence the willingness to take risks. Is the willingness to take risks innate, like hair color?

A certain predisposition is genetically predetermined, but you also adapt to the situation. In general, people are risk averse. However, if the only way to survive is by taking risks, then you will, like emigrants fleeing famine. In addition, willingness to take risks is not necessarily a cross-functional trait. For example, you could be a financial speculator at the same time and don't dare to play sports.

Is general risk aversion a human trait? Are we special cases of nature?

Not at all! Risk aversion was found even in bees and bumblebees. One can also determine risk premiums for different species. Comparing the benefits of reward between species is difficult, however; a little fruit juice may not mean the same thing to all species.

Of course, each species benefits from a few risk takers - those who are the first to try a new dish, start a business, or fly to the moon.

Your brain as a research object? You can register here if you would like to take part in a neuroeconomic study yourself.

Photos: Livia Eichenberger / Philine Widmer