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Neuroeconomics Insights for Decision Analysis

  1. Kaisa Hytönen1,2,
  2. Alan G. Sanfey3,4

Published Online: 14 JAN 2011

DOI: 10.1002/9780470400531.eorms0567

Wiley Encyclopedia of Operations Research and Management Science

Wiley Encyclopedia of Operations Research and Management Science

How to Cite

Hytönen, K. and Sanfey, A. G. 2011. Neuroeconomics Insights for Decision Analysis. Wiley Encyclopedia of Operations Research and Management Science. .

Author Information

  1. 1

    Erasmus University Rotterdam, Rotterdam School of Management, Rotterdam, The Netherlands

  2. 2

    Radboud University Nijmegen, Donders Institute for Brain, Cognition and Behavior, Nijmegen, The Netherlands

  3. 3

    Radboud University Nijmegen, Donders Institute for Brain, Cognition and Behavior, Nijmegen, The Netherlands

  4. 4

    Radboud University Nijmegen, Behavioral Science Institute, Nijmegen, The Netherlands

Publication History

  1. Published Online: 14 JAN 2011

Abstract

Neuroeconomics is a developing field that utilizes methodologies from neuroscience, psychology and economics to study the brain networks that are activated during decision making. In this chapter, we outline the primary methods used by neuroeconomics and examine how this field can help build better models of decision-making. First, we review research related to valuation processes and biases that occur in the brain, and discuss the properties of the human reward circuitry which reacts to both the anticipation and receipt of financial and hedonic rewards. Next, we discuss the balance between emotional and cognitive control areas in the brain, which have a central role in behavioral framing effects. We conclude with a discussion of how a better understanding of the brain processes can increase our knowledge of why decision-making in the real world often strays quite far from the predictions made by standard utility maximization accounts.

Keywords:

  • neuroeconomics;
  • ris;
  • valuation;
  • framing effect;
  • emotion;
  • decision making