Nice little article introducing neuro-economics

[Phil153]

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Pure nonsense masquerading as science. They take very broad results and making ridiculously specific claims which are not supported by the evidence. This is very common in psychology and neurology.

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You got all that from the article in the newspaper?
Do you ever look more in depth before you say things like this? (based on our earlier debates on race and IQ, I'd say no)

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You know, you've been little but a troll in those discussions. Go and reread them. Your contribution was repeated assertions with vague references to decade old debates, you rarely discussed specifics or tackled any of the points I made. You're the perfect example of someone in an intellectual ivory tower. I know, based on our earlier debates, that you won't understand a word of that.

Back on topic...what exactly have researchers found that's news? I haven't read the original research, and frankly I don't care to. The lack of meat in the article says it all. This is my summary of the research findings:

- When the researchers change the functioning of a part of a person's brain that may be involved in decision making, they made a decision that coincided more strongly with their rational self interest (according to the researcher's definition of rational self interest). That's the only data point I can see here. What a truly shocking discovery. They then go on to speculate wildly about all manner of things, based on this single data point.

From what I can see, the only reasonable statements that can be made from this "discovery" are:

1. There are parts of the brain involved in decision making
2. People can make more or less emotionally based decisions when these parts are subject to stress.

Everything else is non evidence based speculation on things that have been known for decades. If I've left anything out, please state exactly what else you think this discovery proves or indicates.

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As for people rejecting free money, it has more to do with avoiding the emotional and social obligations it imposes than brain wiring for game theory.

"And you're sure of this because..."

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Just an observation. There is more to self interest than just economic self interest, a fact which they downplay early on but give a nod to later in the article (completely undermining the false dichotomy they'd set up in the first place in order to frame the useless research).

Below is an example of the crap that fills areas such as neuro economics. This is not science, nor does it offer any insight. It's nothing more than highly unsophisticated speculation, and it should be discouraged instead of celebrated.

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Why might the brain want to overrule self-interest in the first place? Colin Camerer, Professor of Business Economics at the California Institute of Technology, says that it probably evolved that way.

If we always accepted low offers for the sake of tiny gains, we would rapidly get a reputation as a soft touch. Everybody else would try to bilk us at every turn. By acting apparently against our interests, we do better in the long run.

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Thanks for the insight, professor, but a 5 year old can tell you this.

So I ask again: In plain English, what actual real world insight does this give us into the human mind, or behavior, that we didn't have already.

[Darryl_P]

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It's a one-time situation with a stranger, declining any offer is a loss with no downstream benefits.
If this was a situation in our social group (and extended) where it would influence later actions and treatment then declining has implied gains.
Declining in this case has our mind confusing the actual situation with our normal situation and is irrational. ??


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I'm not sure it matters if it's iterated or not. I have two choices as to how $10 should be split between three parties:

1. myself
2. my opponent in the game, and
3. the person offering up the $10

One of my choices is (0,0,10). The other is (x, 10-x, 0), where x is the amount offered up by my opponent.

What is so irrational about looking beyond my own immediate interests and considering what I believe to be just and fair for all parties involved?

All I'm assuming is that the other parties are human beings on planet Earth with life expectancies of a similar order of magnitude to mine. Are these unreasonable assumptions?

[Propertarian]

It's so good to see that economists are finally starting to step away from the preposterous theory of human nature used by neoclassical economics.

[hmkpoker]

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It's a one-time situation with a stranger, declining any offer is a loss with no downstream benefits.
If this was a situation in our social group (and extended) where it would influence later actions and treatment then declining has implied gains.
Declining in this case has our mind confusing the actual situation with our normal situation and is irrational. ??


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I'm not sure it matters if it's iterated or not. I have two choices as to how $10 should be split between three parties:

1. myself
2. my opponent in the game, and
3. the person offering up the $10

One of my choices is (0,0,10). The other is (x, 10-x, 0), where x is the amount offered up by my opponent.

What is so irrational about looking beyond my own immediate interests and considering what I believe to be just and fair for all parties involved?

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That's kind of a deviation from what's being discussed. By "irrational," we're talking about the human tendency to minimize personal gain solely for the utility of destroying the utility for someone else. (Declining an offer of $2 that gives someone else $8.) If human beings are incentivized to destroy the utility of another, the problems posed to the economy are obvious: useful resources that provide sustinence, security and comfort are destroyed. Civilization can only come about if we are trying to icrease utility/resources; not destroy them.

Not to drag AC into this, but I think it's logical to believe that the utility in supporting redistribution is not just about benevolently aiding the poor, but also about maliciously harming the wealthy.

However, it's indisputable that some people are more affected by emotion than others. The professional poker players here have managed to override a lot of the emotional drives that are rationally unprofitable simply through an understanding of game theory and math; in so doing, they create for themselves new rewards and punishments that are more rational in nature, by conquering results-oriented thinking. (For example, I believe a pro poker player is more likely to feel guilty about making a bad call and sucking out than a fish, and more likely to feel proud about making a disciplined fold when he doesn't get the odds, and then see the miracle card come in)

I also have a feeling that the understanding of our naturally bad judgement mechanisms influences us in a direction of greater rationality.

[hmkpoker]

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It's so good to see that economists are finally starting to step away from the preposterous theory of human nature used by neoclassical economics.

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It would be equally preposterous to think that any such nature is static.

[acidca]

What about the natural tendency to want to do things that are beneficial for the group? By declining the unfair proposal, you are creating a motive for mutually beneficial behavior, right? We're benevolently selfish!

[Darryl_P]

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By "irrational," we're talking about the human tendency to minimize personal gain solely for the utility of destroying the utility for someone else.

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It's not a frivolous destruction of utility, though. By making an offer which I deem unfair, he has transgressed upon me. It's not a violation of property rights according to AC theory of course since he didn't harm me physically, coerce me, or take any physical posession of mine, but guess what? My defintion of a transgression is different from that of an ACer. I have a particular value system which forms the set of axioms that I use as the basis for all my reasoning. From there, applying cold hard logic to the situation leads to declining smaller offers.

Just because my axioms are different from yours or those of ACers doesn't mean I'm irrational. Irrationality occurs when I deviate from my own values because of emotion. That might happen in an argument with my wife, for example, or some other stressful situation when my reasoning abilites are impaired.

What seems irrational to me, though, is to assume human nature is (or should be) a certain way despite strong evidence to the contrary and assume anyone who has other values is irrational.

[Rduke55]

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You know, you've been little but a troll in those discussions. Go and reread them. Your contribution was repeated assertions with vague references to decade old debates, you rarely discussed specifics or tackled any of the points I made. You're the perfect example of someone in an intellectual ivory tower. I know, based on our earlier debates, that you won't understand a word of that.

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Wow, I'm stunned that you just called me a troll. You're the one rehashing the same ignorant points over and over again.
I made statements that I backed up with citations, not assertations. While some were a decade or more old (from when this debate had a couple respectable scientists still on your side of it) many of those citations were from the past few years.

Do you know what I do for a living? I'm a neuroscientist. My doctorate was on brain evolution. I then did a fellowship on brain evolution. I feel pretty comfortable saying I've read more about this subject, thought more about this subject, and discussed this subject with experts in the field more than anyone else on this forum. The funny thing is, when I started in the neurosciences I had the same point of view as you. What I learned changed it.

And you dismiss that all with a wave of your folk wisdom-filled hand. What do you mean by intellectual ivory tower? That someone is actually educated in a subject?

You're basically saying "Scientists are not the most qualified people to do science."

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Back on topic...what exactly have researchers found that's news? I haven't read the original research, and frankly I don't care to. The lack of meat in the article says it all.

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Lack of meat? LOL. This explains a lot. It's not a scientific article - it's a newspaper article ABOUT a scientific article. A lot of things just became clearer for me.

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This is my summary of the research findings:

- When the researchers change the functioning of a part of a person's brain that may be involved in decision making, they made a decision that coincided more strongly with their rational self interest (according to the researcher's definition of rational self interest). That's the only data point I can see here. What a truly shocking discovery. They then go on to speculate wildly about all manner of things, based on this single data point.

From what I can see, the only reasonable statements that can be made from this "discovery" are:

1. There are parts of the brain involved in decision making
2. People can make more or less emotionally based decisions when these parts are subject to stress.

Everything else is non evidence based speculation on things that have been known for decades. If I've left anything out, please state exactly what else you think this discovery proves or indicates.

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Holy crap. You don't think investigating the neural substrate of, and evolutionary reasons for, decision making in humans has merit?

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Just an observation. There is more to self interest than just economic self interest, a fact which they downplay early on but give a nod to later in the article (completely undermining the false dichotomy they'd set up in the first place in order to frame the useless research).

Below is an example of the crap that fills areas such as neuro economics. This is not science, nor does it offer any insight. It's nothing more than highly unsophisticated speculation, and it should be discouraged instead of celebrated.

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Can you explain to us what science is then according to you?

[hmkpoker]

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It's not a frivolous destruction of utility, though. By making an offer which I deem unfair, he has transgressed upon me. It's not a violation of property rights according to AC theory of course since he didn't harm me physically, coerce me, or take any physical posession of mine, but guess what? My defintion of a transgression is different from that of an ACer. I have a particular value system which forms the set of axioms that I use as the basis for all my reasoning. From there, applying cold hard logic to the situation leads to declining smaller offers.

Just because my axioms are different from yours or those of ACers doesn't mean I'm irrational. Irrationality occurs when I deviate from my own values because of emotion. That might happen in an argument with my wife, for example, or some other stressful situation when my reasoning abilites are impaired.

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Can those core values ever be irrationally constructed?

One of the best examples I can think of is a no-talent adolescent with dreams of hitting it big in the music industry and becoming a rock star. It's not that uncommon of a scenario, but the fulfillment of those wishes is EXTREMELY uncommon. Most adolescents don't realize (or defiantly ignore) just how difficult and unlikely such a result is, and almost all eventually become disappointed. Some become slacking adults with similarly juvenile aspirations that are impossible.

I consider rational paradigms to be those that are conducive to actions that are most likely to result in happiness (the definition of which is unfortunatel complicated), while factoring in the dimension of time (an action that yields immediate happiness at the expense of future happiness, like shooting heroin, is not always rational). What do you think?

[Borodog]

I will go back to reading the article, to see if there is some worthwhile insight, but I have temporailly stopped after reading this:

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IMAGINE that you are sitting next to a complete stranger who has been given £10 to share between the two of you. He must choose how much to keep for himself and how much to give to you.

He can be as selfish or as generous as he likes, with one proviso: if you refuse his offer, neither of you gets any money at all. What would it take for you to turn him down?

This is the scenario known to economists as the ultimatum game. Now the way we play it is generating remarkable insights into how the human brain drives financial decisionmaking, social interactions and even the supremely irrational behaviour of suicide bombers and gangland killers.

According to standard economic theory, you should cheerfully accept anything you are given. People are assumed to be motivated chiefly by rational self-interest, and refusing any offer, however low, is tantamount to cutting off your nose to spite your face.

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This is just stupid. This ridiculous result does not in any way depend on "standard economic theory", it depends on suckers.

This scenario becomes precisely clear when we realize that it is exactly symmertic, i.e. it does not matter which person is "given" the $10 initially; both players must agree on the split for either to be paid. The only possible rational solution is to offer and accept only $5.

Any player who accepts less than $5 has not thought about the game thoroughly (and hence is not "perfectly rational", in the game theoretic sense).

A player who accepts $0 rather than agreeing to $4 has made precisely no worse of a mistake than the player ending up with $0 after holding out for $6.

There is nothing at all in this game that confounds "standard economic theory."

This article better pick up fast.