New Economics Papers
on Neuroeconomics
Issue of 2007‒07‒20
two papers chosen by
Daniela Raeva


  1. Neural Substrates of Decision-Making in Economic Games By Stanton, Angela A.
  2. Decision-Making: A Neuroeconomic Perspective By Hardy-Vallee, Benoit

  1. By: Stanton, Angela A.
    Abstract: In economic experiments decisions often differ from game-theoretic predictions. Why are people generous in one-shot ultimatum games with strangers? Is there a benefit to generosity toward strangers? Research on the neural substrates of decisions suggests that some choices are hormone-dependent. By artificially stimulating subjects with neuroactive hormones, we can identify which hormones and brain regions participate in decisionmaking, to what degree and in what direction. Can a hormone make a person generous while another stingy? In this paper, two laboratory experiments are described using the hormones oxytocin (OT) and arginine vasopressin (AVP). Concentrations of these hormones in the brain continuously change in response to external stimuli. OT enhances trust (Michael Kosfeld et al. 2005b), reduce fear from strangers (C. Sue Carter 1998), and has anti-anxiety effects (Kerstin Uvnäs-Moberg, Maria Peterson 2005). AVP enhances attachment and bonding with kin in monogamous male mammals (Jennifer N. Ferguson et al. 2002) and increases reactive aggression (C. Sue Carter 2007). Dysfunctions of OT and/or AVP reception have been associated with autism (Miranda M. Lim et al. 2005). In Chapter One I review past experiments with the ultimatum (UG) and dictator (DG) games and visit some of the major results in the literature. In Chapter Two I present the results of my laboratory experiment where I examine why people are generous in one-shot economic games with strangers. I hypothesize that oxytocin would enhance generosity in the UG. Players in the OT group were much more generous than those in the placebo—OT offers in the UG were 80% higher than offers on placebo. Enhanced generosity was not due to altruism as there was no effect on DG offers. This implies that other-regarding preferences are at play in the amount of money sent but only in a reciprocal context. The third chapter presents an experiment on punishment. I hypothesized that AVP would increase rejections and stinginess in the UG and TG. Results show that AVP affects rejections and stinginess in small groups but not in large ones. Chapter Four contains the summary of future research suggestions.
    Keywords: Oxytocin; Vasopressin; ultimatum game; dictator game; trust game; generosity; altruism
    JEL: Y40 D01 Z00
    Date: 2007–05–12
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:4030&r=neu
  2. By: Hardy-Vallee, Benoit
    Abstract: This article introduces and discusses from a philosophical point of view the nascent field of neuroeconomics, which is the study of neural mechanisms involved in decision-making and their economic significance. Following a survey of the ways in which decision-making is usually construed in philosophy, economics and psychology, I review many important findings in neuroeconomics to show that they suggest a revised picture of decision-making and ourselves as choosing agents. Finally, I outline a neuroeconomic account of irrationality.
    Keywords: neuroeconomics; decision-making; rationality; ultimatum; philosophy; psychology
    JEL: B50 D01
    Date: 2007–07
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:4010&r=neu

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