| Abstract: |
Current theories of decision making suggest that the neural circuits in
mammalian brains (including humans) computationally combine representations of
the past (memory), present (perception), and future (agentic goals) to take
actions that achieve the needs of the agent. How information is represented
within those neural circuits changes what computations are available to that
system which changes how agents interact with their world to take those
actions. We argue that the computational neuroscience of decision making
provides a new microeconomic framework (neuroeconomics) that offers new
opportunities to construct policies that interact with those decision-making
systems to improve outcomes. After laying out the computational processes
underlying decision making in mammalian brains, we present four applications
of this logic with policy consequences: (1) contingency management as a
treatment for addiction, (2) precommitment and the sensitivity to sunk costs,
(3) media consequences for changes in housing prices after a disaster, and (4)
how social interactions underlie the success (and failure) of microfinance
institutions. |