Handbook of Experimental Economics Editors: John Kagel and Alvin Roth Neuroeconomics Colin Camerer (California Institute of Technology), Jonathan Cohen (Princeton University), Ernst Fehr (University of Zurich), Paul Glimcher (New York University), David Laibson (Harvard University) Camerer, Division HSS, Caltech,
[email protected]; Cohen, Princeton Neuroscience Institute, Princeton University,
[email protected]; Fehr, University of Zurich, Department of Economics,
[email protected]; Glimcher, Center for Neural Science, New York University,
[email protected]; Laibson, Department of Economics, Harvard University,
[email protected]. We acknowledge financial support from the Moore Foundation (Camerer), the National Science Foundation (Camerer), and the National Institute of Aging (Cohen, Laibson). Introduction ―One may wonder whether Adam Smith, were he working today, would not be a neuroeconomi[st]‖ Aldo Rustichini (2005). Neuroeconomics is the study of the biological microfoundations of economic cognition and behavior. Biological microfoundations are neurochemical mechanisms and pathways, like brain regions, neurons, genes, and neurotransmitters.1 Economic cognition includes memory, preferences, emotions, mental representations, expectations, anticipation, learning, information processing, inference, simulation, valuation, and the subjective experience of reward. In general, neuroeconomic research seeks to identify and test biologically microfounded models that link cognitive building blocks to economic behavior. If successful, neuroeconomic research will improve economists‘ ability to forecast behavior (e.g., Bernheim et al 2011, Fehr and Rangel 2011). Neuroeconomics is a big tent. Neuroeconomic research requires some curiosity about neurobiology, but neuroeconomic research does not necessarily require a departure from classical economic assumptions (e.g., rationality and dynamic consistency). A classical economist would be a neuroeconomist if she wanted to study the biological mechanisms that influence rational decision-making.