Beyond Behavioral Economics

Neuroeconomics is even newer. I've seen the experiment here quoted in other articles, so I think it is really just behavioral economics with some brain scans. But I think this is key:

Neuroscience may shed light on all sorts of economic behavior, said Dr. George Loewenstein, an economist at Carnegie Mellon University in Pittsburgh. "Under the influence of powerful emotions or drives, people often end up doing the opposite of what they think is best for themselves, even at the moment of acting," he said.

This is why economic policies need a long-term focus. In the short-term humans often make stupid decisions, but a long-term plan can be calculated and rational. It's like trying to save money. If I save it when I feel like it – I'll never have anything, so I have some automatically deducted from my checking account each month, and that way I won't spend it.

I think that the "gut feeling" often talked about in these neuroscience articles is really the rational subconscious. Humans have an ability to pick up body language and other signs from other humans without being fully conscious of the fact we are doing it, and that is where the gut feeling comes from. I am really fascinated by all this, and often think of going to Indiana University to get a PhD in Cognitive Science with Economics. It sounds fun, but it also sounds like too much work. My blogging might suffer!

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