"Neuro-economics is just getting started"

April 20, 2006

Marginal Revolution's Tyler Cowan's first New York Times gig:

People are not consistent or fully rational decision makers.... Researchers can see on the screen how people compartmentalize their choices into different parts of their brains. This may not always sound like economics but neuro-economists start with the insight — borrowed from the economist Friedrich Hayek — that resources are scarce within the brain and must be allocated to competing uses. Whether in economies or brains, well-functioning systems should not be expected to exhibit centralized command and control.

The practical application of this is immense, especially as applied to leveraged decision-making like investing. And measuring "states" as brain location via imaging machines may show much of what neuro-linguistic "state" lore has hypothesized:
There are many different personalities running around in there.

So who is here right now?

Update:
Orbitofrontal cortex neurons are located that assign value in choice.

Economic choice is, at its essence, a choice between goods as opposed to a choice between actions.