| Abstract: |
Neuroeconomics focuses on brain imaging studies mapping neural responses to
choice behavior. Economic theory is concerned with choice behavior but it is
silent on neural activities. We present a game theoretic model in which
players are endowed with an additional structure--a simple 'nervous
system'--and interact repeatedly in changing games. The nervous system
constrains information processing functions and behavioral functions. By
reinterpreting results from evolutionary game theory (Germano, 2007), we
suggest that nervous systems can develop to 'function well' in exogenously
changing strategic environments. We present an example indicating that an
analogous conclusion fails if players can influence endogenously their
environment. |