Neuroeconomic

Introduction

Over the last few years, one has witnessed the formation of a new and potentially very powerful field of research: neuroeconomics. A perfect synergy it seems, as both economics and neuroscience provide strong methodologies complementing each other in some sense. (Arana,.9632)

Economics may be seen as relatively 'macroscopic' in nature, where models are often based on concepts like partial versus general equilibrium of systems with many degrees of freedom, i.e. individuals, groups of individuals, or whole societies. In those models, the human mind - the driver of all economic action - is considered a 'black box', which is conceptualised in terms of abstract probabilities in order to describe the individual action in a given situation. Here, neuroscience could provide reliable measurements to uncover the relevant psychological forces operating within the black box.

Neuronal correlates of economic decisions

Game theory provides models, known as games, to study interactions with formalised incentive structures. Such games are of profound theoretical importance in economics (as well as many other fields) where one wishes to model processes in which the optimality and/or profitability of a course of (economic) action is affected by both the moves of the decision-maker and the actions of thinking competitors (e.g. [12]).

Gehring and Willoughby have used electroencephalography (EEG) to study neuronal response in subjects performing a simple monetary gambling task, where participant's choices are followed by outcome stimuli that inform about gains and losses. The main finding in that study is an outcome-related evoked component, most likely generated in medial-frontal brain regions. Crucially, this component is greater in amplitude when a subject's choice results in a loss than when it results in a gain. Moreover, choices made after losses are riskier and are associated with stronger loss-related activity than choices made after gains. Those results suggest that neuronal processes in medial-frontal brain areas may relate to mental processes involved in economic decisions.(Arana,.9632)

Evidently, game theory provides a rich theoretical background for neuroscientific investigations into a wide spectrum of economically relevant behaviour. However, it is debateable how the generalised incentive structures studied in such games map onto specific economic behaviour in a given real-life situation. Thus, researchers have recently begun to investigate the neuronal mechanisms underlying a more specific form of economically relevant behaviour, i.e. consumer choices concerning the selection and consumption of certain products. In this approach, one is interested in the relationship between marketing stimuli, most notably TV commercials, to which individuals are exposed; individual choices at the point-of-purchase. Typically, there is a variable time gap between the two, making it very difficult to trace continuously the mechanisms underlying consumer choice behaviour.(Bettman,187)

Neuronal responses to TV commercials

Ambler and Burne have studied the impact of affect on memory of TV advertising, using behavioural measures to assess performance in tasks of image recognition and recall. The results obtained from that study suggest that under normal conditions, recognition and recall of affective TV material (using e.g. suspense, drama, humour) is superior to cognitive material (based on plain facts). Administration of propanolol reduces slightly recognition and recall of affective material, ...