Glossary
Neuroeconomics
What is neuroeconomics?
Neuroeconomics combines neuroscience, psychology, and economics to understand how the brain makes decisions about value, risk, and reward. It uses brain imaging and computational models to investigate the neural processes involved in economic choices.
How it works
Neuroeconomics relates choice models to neural measurements of valuation, learning and action, including research on the ventromedial prefrontal cortex and ventral striatum. Model-based and model-free learning are useful computational distinctions, but they do not map neatly onto one deliberate cortical system and one habitual striatal system. Neural evidence can test economic models without implying that all choice is a conflict between rational and irrational parts of the brain.
Model-based and model-free learning
Model-based evaluation uses a representation of how actions lead to later situations and outcomes to compare possible actions. Model-free learning updates stored action values from experience without calculating those values from a model of the task’s transitions. Daw and colleagues (2011) used a multistep task to distinguish these influences on choice.
In a hypothetical travel choice, someone can use a map and news of a road closure to work out a new route. That illustrates using a model of where actions lead. Favoring a route because past trips on it went well illustrates reliance on previously learned value. Actual travelers can combine both approaches; the example does not identify which brain region controls a particular trip.
Applied example
Kable and Glimcher (2007) found that activity in the ventral striatum, medial prefrontal cortex and posterior cingulate cortex tracked estimated subjective value during choices about delayed monetary rewards. This supports a value-related interpretation rather than a simple immediate-reward versus delayed-reward division.
Why it matters
Neuroeconomics connects behavioral models with biological measurements. Brain-activity correlations constrain explanations but do not alone prove a causal mechanism for choice.
Evidence note: Kable and Glimcher (2007) provide primary evidence for subjective-value signals in intertemporal choice.