Understanding more about how the brain functionsshouldhelp us understand economic behaviour. But some would have us believe that it has done this already, and that insights from neuroscience have already provided insights in economics that we would not otherwise have. Much of this is just academic marketing hype, and to get down to substantive issues we need to identify that fluff for what it is. After we clear away the distractions, what is left? The answer is that a lot is (...) left, but it is still all potential. That is not a bad thing, or a reason to stop the effort, but it does point to the need for a serious reconsideration of what neuroeconomics is and what passes for explanation in this literature. I argue that neuroeconomics can be a valuable field, but not the way it is being developed and “sold” now. The same is true more generally of behavioural economics, which shares many of the methodological flaws of neuroeconomics. (shrink)

Explanations in the life sciences frequently involve presenting a model of the mechanism taken to be responsible for a given phenomenon. Such explanations depart in numerous ways from nomological explanations commonly presented in philosophy of science. This paper focuses on three sorts of differences. First, scientists who develop mechanistic explanations are not limited to linguistic representations and logical inference; they frequently employ diagrams to characterize mechanisms and simulations to reason about them. Thus, the epistemic resources for presenting mechanistic explanations are (...) considerably richer than those suggested by a nomological framework. Second, the fact that mechanisms involve organized systems of component parts and operations provides direction to both the discovery and testing of mechanistic explanations. Finally, models of mechanisms are developed for specific exemplars and are not represented in terms of universally quantified statements. Generalization involves investigating both the similarity of new exemplars to those already studied and the variations between them. (shrink)

The understanding of decision-making systems has come together in recent years to form a unified theory of decision-making in the mammalian brain as arising from multiple, interacting systems (a planning system, a habit system, and a situation-recognition system). This unified decision-making system has multiple potential access points through which it can be driven to make maladaptive choices, particularly choices that entail seeking of certain drugs or behaviors. We identify 10 key vulnerabilities in the system: (1) moving away from homeostasis, (2) (...) changing allostatic set points, (3) euphorigenic signals, (4) overvaluation in the planning system, (5) incorrect search of situation-action-outcome relationships, (6) misclassification of situations, (7) overvaluation in the habit system, (8) a mismatch in the balance of the two decision systems, (9) over-fast discounting processes, and (10) changed learning rates. These vulnerabilities provide a taxonomy of potential problems with decision-making systems. Although each vulnerability can drive an agent to return to the addictive choice, each vulnerability also implies a characteristic symptomology. Different drugs, different behaviors, and different individuals are likely to access different vulnerabilities. This has implications for an individual's susceptibility to addiction and the transition to addiction, for the potential for relapse, and for the potential for treatment. (shrink)

When modern economists use the notions of sympathy or empathy, they often claim that their ideas have their roots in Adam Smith's Theory of Moral Sentiments, while sometimes complaining that Smith fails to distinguish clearly enough between the two concepts. Recently, Philippe Fontaine has described various forms of sympathy and empathy, and has explored their respective roles in Smith's work. My objective in this paper is to argue that Smith's analysis of how people's sentiments impinge on one another involves a (...) concept of fellow-feeling that is distinct from both sympathy and empathy. Unlike sympathy and empathy, fellow-feeling does not fit into the ontological framework of rational choice theory – which may explain why it tends to be overlooked by modern readers of Smith. (shrink)

In The Construction of Social Reality, John Searle develops a theory of institutional facts and objects, of which money, borders and property are presented as prime examples. These objects are the result of us collectively intending certain natural objects to have a certain status, i.e. to ‘count as’ being certain social objects. This view renders such objects irreducible to natural objects. In this paper we propose a radically different approach that is more compatible with standard economic theory. We claim that (...) such institutional objects can be fully understood in terms of actions and incentives, and hence the Searlean apparatus solves a non-existent problem. (shrink)

I distinguish between two styles of research that are both called . Neurocellular economics (NE) uses the modelling techniques and mathematics of economics to model relatively encapsulated functional parts of brains. This approach rests upon the fact that brains are, like markets, massively distributed information-processing networks over which executive systems can exert only limited and imperfect governance. Harrison's (2008) deepest criticisms of neuroeconomics do not apply to NE. However, the more famous style of neuroeconomics is behavioural economics in the scanner. (...) This is often motivated by complaints about conventional economics frequently heard from behavioural economists. It attempts to use neuroimaging data to justify arguments for replacing standard aspects of microeconomic theory by facts and conjectures about human psychology. Harrison's grounds for unease about neuroeconomics apply to most BES, or at least to its explicit methodology. This methodology is naively reductionist and illegitimately assumes that economics should not do what all successful science does, namely, model abstract aspects of its target phenomena instead of would-be complete and fully ecologically situated facsimiles of them. (shrink)

The understanding of decision-making systems has come together in recent years to form a unified theory of decision-making in the mammalian brain as arising from multiple, interacting systems (a planning system, a habit system, and a situation-recognition system). This unified decision-making system has multiple potential access points through which it can be driven to make maladaptive choices, particularly choices that entail seeking of certain drugs or behaviors. We identify 10 key vulnerabilities in the system: (1) moving away from homeostasis, (2) (...) changing allostatic set points, (3) euphorigenic signals, (4) overvaluation in the planning system, (5) incorrect search of situation-action-outcome relationships, (6) misclassification of situations, (7) overvaluation in the habit system, (8) a mismatch in the balance of the two decision systems, (9) over-fast discounting processes, and (10) changed learning rates. These vulnerabilities provide a taxonomy of potential problems with decision-making systems. Although each vulnerability can drive an agent to return to the addictive choice, each vulnerability also implies a characteristic symptomology. Different drugs, different behaviors, and different individuals are likely to access different vulnerabilities. This has implications for an individual's susceptibility to addiction and the transition to addiction, for the potential for relapse, and for the potential for treatment. (shrink)

The concept of mechanism is analyzed in terms of entities and activities, organized such that they are productive of regular changes. Examples show how mechanisms work in neurobiology and molecular biology. Thinking in terms of mechanisms provides a new framework for addressing many traditional philosophical issues: causality, laws, explanation, reduction, and scientific change.

Why are people interested in money? Specifically, what could be the biological basis for the extraordinary incentive and reinforcing power of money, which seems to be unique to the human species? We identify two ways in which a commodity which is of no biological significance in itself can become a strong motivator. The first is if it is used as a tool, and by a metaphorical extension this is often applied to money: it is used instrumentally, in order to obtain (...) biologically relevant incentives. Second, substances can be strong motivators because they imitate the action of natural incentives but do not produce the fitness gains for which those incentives are instinctively sought. The classic examples of this process are psychoactive drugs, but we argue that the drug concept can also be extended metaphorically to provide an account of money motivation. From a review of theoretical and empirical literature about money, we conclude that (i) there are a number of phenomena that cannot be accounted for by a pure Tool Theory of money motivation; (ii) supplementing Tool Theory with a Drug Theory enables the anomalous phenomena to be explained; and (iii) the human instincts that, according to a Drug Theory, money parasitizes include trading (derived from reciprocal altruism) and object play. (Published Online April 5 2006) Key Words: economic behaviour; evolutionary psychology; giving; incentive; money; motivation; play; reciprocal altruism. (shrink)

We briefly describe ways in which neuroeconomics has made contributions to its contributing disciplines, especially neuroscience, and a specific way in which it could make future contributions to both. The contributions of a scientific research programme can be categorized in terms of (1) description and classification of phenomena, (2) the discovery of causal relationships among those phenomena, and (3) the development of tools to facilitate (1) and (2). We consider ways in which neuroeconomics has advanced neuroscience and economics along each (...) line. Then, focusing on electrophysiological methods, we consider a puzzle within neuroeconomics whose solution we believe could facilitate contributions to both neuroscience and economics, in line with category (2). This puzzle concerns how the brain assigns reward values to otherwise incomparable stimuli. According to the common currency hypothesis, dopamine release is a component of a neural mechanism that solves comparability problems. We review two versions of the common currency hypothesis, one proposed by Read Montague and colleagues, the other by William Newsome and colleagues, and fit these hypotheses into considerations of rational choice. (shrink)

This paper is concerned with the notions of supervenience and mechanistic constitution as they have been discussed in the philosophy of neuroscience. Since both notions essentially involve specific dependence and determination relations among properties and sets of properties, the question arises whether the notions are systematically connected and how they connect to science. In a first step, some definitions of supervenience and mechanistic constitution are presented and tested for logical independence. Afterwards, certain assumptions fundamental to neuroscientific inquiry are made explicit (...) in order to show that the presented definitions of supervenience are virtually uninteresting for theory construction in this field. In a third step, a new formulation of supervenience is developed that makes explicit reference to the notion of constitution and that bridges the gap between the philosophical concepts and explanatory practice in neuroscience. (shrink)