Research Article: Economy of the Mind

Date Published: December 22, 2003

Publisher: Public Library of Science

Author(s): Kendall Powell

Abstract: Neurobiologists and economists are joining forces to study how we make decisions.

Partial Text: Frans de Waal’s laboratory monkeys won’t work for unequal pay. If a partner monkey gets a grape (big bucks) for little or no work (trading a token), a monkey will reject her measly cucumber pay from her human “boss.” And she makes her disdain known, hurling her cucumber or token out of her cubicle—even though she would happily gobble down cucumbers in other circumstances.

The principle of Expected Utility says that a person facing uncertainty will rank the possible payoffs or outcomes as a function of their expected values and probabilities of happening. Using this principle, experimental economists tested the idea that humans should interact with a self-interest that gives the highest possible gain. In the Ultimatum game, one person is given a sum of money and must decide how much of that sum to share with a second person. The second person can then decide to accept or reject the offer, but the catch is that if he rejects the offer, neither player gets any money.

One laboratory has shown that neurons can indeed “code” for some of the variables weighed during simple decisions or choices. Wolfram Schultz and his colleagues at Cambridge University in the United Kingdom studied dopamine-releasing neurons in the ventral midbrain of monkeys. Dopamine neurons have long been implicated in reward-seeking behavior and are targets of highly addictive drugs like nicotine and cocaine.

Kevin McCabe, a neuroeconomist at George Mason University in Fairfax, Virginia, was among the first social scientists to set up a neurobiology experiment to answer his questions about how humans make decisions. His early work showed that if you changed the Ultimatum Game into the Dictator Game, where the first person simply dictated how much the second person got, then humans still gave a fairly large sum away, about one-third of the total. Only when the experimenter and the second person could not see the decision of the dictator did the dictator begin acting in the rational, self-serving manner of giving away tiny amounts. Only in the socially isolated context did the dictator follow economic principles.



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