Neuroeconomics PLS

Neuroeconomics PLS - Feature Economy of the Mind Kendall...

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Volume 1 | Issue 3 | Page 312 PLoS Biology | http://biology.plosjournals.org F rans de Waal’s laboratory monkeys won’t work for unequal pay. If a partner monkey gets a grape (big bucks) for little or no work (trading a token), a monkey will reject her measly cucumber pay from her human “boss.” And she makes her disdain known, hurling her cucumber or token out of her cubicle—even though she would happily gobble down cucumbers in other circumstances. De Waal’s work at the Yerkes Primate Center at Emory University in Atlanta has shown an aversion to inequality in non-human primates (Figure 1), drawing an evolutionary link between how humans and monkeys make decisions. Humans reject inequality, too, even if it means walking away empty-handed. This behavior cannot be explained by classical economic theory that says both monkeys and humans should take whatever reward they are offered to maximize gain. But in species like de Waal’s monkeys and humans that rely heavily on cooperation for survival, evolution has favored a complex calculus for even simple decisions. In a simpli±ed way, de Waal’s experiments and others blend neurobiologists’ ability to track behavior and brain processes with economists’ models of the cost–bene±t analyses behind every decision made by an animal. The two ±elds have each been working toward explaining decision-making behavior, using widely different approaches for decades. Recently, researchers in both ±elds have recognized that using tools from the other trade might speed their own work along, resulting in the emerging ±eld of neuroeconomics. Teaming Up The principle of Expected Utility says that a person facing uncertainty will rank the possible payoffs or outcomes as a function of their expected values and probabilities of happening. Using this principle, experimental economists tested the idea that humans should interact with a self-interest that gives the highest possible gain. In the Ultimatum game, one person is given a sum of money and must decide how much of that sum to share with a second person. The second person can then decide to accept or reject the offer, but the catch is that if he rejects the offer, neither player gets any money. Although rational-decision theory predicts that the ±rst player should make a low offer and the second player should accept because it would maximize how much each player leaves with, the results were resoundingly irrational. Most ±rst players offered close to half of the money and most second players rejected sums lower than half. Economists were stumped when their models fell far short of explaining human decision-making. “Standard economic theory uses models where players are calculating complicated numbers, thinking far ahead to ±gure out what the other person will do, and there are no temptations,” explains Colin Camerer, a behavioral economist at the California Institute of Technology in Pasadena. Those models tended to be mathematically simple, but realistically
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This note was uploaded on 07/15/2009 for the course BIO 208 taught by Professor Lorne-mendell,s during the Fall '08 term at SUNY Stony Brook.

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Neuroeconomics PLS - Feature Economy of the Mind Kendall...

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