Behavioral economics and neuroeconomics: Cooperation, competition, preference, and decision making

Abstract

Behavioral economics and neuroeconomics concern how humans process multiple alternatives to make their decisions, and propose how discoveries about how the brain works can inform models of economic behavior. This lecture will survey how results about cooperative-competitive and cognitive-emotional dynamics that were discovered to better understand how brains control behavior can shed light on issues of importance in economics, including results about the voting paradox, how to design stable economic markets, irrational decision making under risk (Prospect Theory), probabilistic decision making, preferences for previously unexperienced alternatives over rewarded experiences, and bounded rationality.