The 2018 APESA conference (8-9 February) will be preceded by a one day workshop on neuroeconomics (7th February). The workshop is designed to offer the opportunity to graduate students (and interested academics) to get an introduction to this area. The workshop will consist of lectures by leading researchers in the area about questions and methods in neuroeconomics.
Soo Hong Chew (National University of Singapore)
Carsten Murawski (University of Melbourne)
Agnieszka Tymula (University of Sydney)
QUT Gardens Point P bloc, P413 – Map of the conference venues
9.30am-10am: Morning tea
10am-12pm: Agnieszka Tymula (University of Sydney)
Neuroeconomics – where science and economics meet
For years, while building their mathematical predictive models of choice, economists treated the brain as a “black box”. The economic models of choice were thus mathematically very elegant; but have been shown to systematically fail under numerous circumstances. Neuroeconomists now understand the basic architecture of the brain and how it actually makes choices. In this talk, I will demonstrate these advances and explain how the brain encodes value and what implications it has for economic theory. As an example of biologically plausible theory, I will present a descriptive model of choice with normative foundations based on how the brain is thought to represent value. The model captures similar phenomena as Prospect Theory but employs fewer parameters, allows for individual heterogeneity, and retains neurobiological plausibility, as well as making a series of novel predictions. I will finish off by showing the first empirical findings on how neuroanatomy relates to economic preferences.
1pm-3pm: Carsten Murawski (University of Melbourne)
From choice to computation to spikes, and back: Why we need computer science and neuroscience to understand economic behaviour
Most economic theories are based on the rationality principle, the assumption that choice reflects the most preferred alternative available. In this talk, I will draw on computer science and neuroscience to question the plausibility of the rationality principle. I will use computational complexity theory in combination with neurobiology to show that determining the most preferred alternative is often intractable: computing it would require resources beyond those available. I will also present evidence showing that computational resource requirements, as quantified by computational complexity theory, strongly affect human behaviour, at the level of both individual and market. Based on the evidence presented, I will argue that in order to be plausible, future models of economic choice need to take into account computational complexity of decisions and should be grounded in neurobiology.
3pm-3.30pm: Afternoon tea
3.30pm-5.30pm: Chew Soo Hong (National University of Singapore)
Elements of economics, psychology and biology are converging towards delivering a revolutionary understanding of how people make decisions. Many would credit prospect theory with bringing psychological considerations into the modelling of decision making under risk through applying the Fechner-Weber law of diminishing sensitivity to both gains and losses. Bringing neurogenetics involving dopamine and serotonin further delivers a neurochemical foundation for this loss-gain differentiation in risk attitude. In parallel, we discuss novel evidence linking the inhibitory neurotransmitter GABA (gamma-aminobutyric acid), underpinning anxiety and fear regulation, to the phenomenon of familiarity bias in financial decision making at the heart of the home market bias in investor behavior. We next focus on a pleiotropic gene (affecting seemingly unrelated phenotypic traits), the dopamine D4 receptor gene (DRD4), important in both individual and social behavior. Besides being linked to risk attitude, it has been hypothesized as a norm-sensitive gene inducing greater norm adherence, particularly cooperativeness. We discuss new evidence demonstrating a DRD4 x rice culture co-evolution of both traits over the millennia pointing to a shared underlying trait of efficiency orientation.
5.30pm: Reception and drinks at the Cube