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New field of science might explain decision making

Ever wonder why you have to pay for the Golf channel, SoapNet or the Lifetime Network when you subscribe to cable?

You can blame science.

Economists calculated that cable companies can glean higher profits by bundling channels together because of how people make decisions.

And now scientists are delving deeper into the decision-making process by studying how the brain makes economic choices.

Neuroeconomics, a burgeoning new field of study popularized by this year’s Nobel Prize, was the focus of a conference held this weekend at the Carlson School of Management.

The research combines elements from psychology, economics and neuroscience.

It works to explain what factors influence the brain’s decision-making process and how the brain physiologically makes choices.

Researchers hope to better predict economic behavior, such as how much someone is willing to pay for a given item, by tracking things such as heart rates and brain waves.

John Dickhaut, Carlson professor and co-host of the conference, said researchers are trying to understand why some people make good decisions while others make bad ones.

Dickhaut said this information can help those who consistently make bad choices.

“The ultimate goal is to build the best societal institution,” he said.

But there are also concerns.

Aldo Rustichini, a University economics professor and co-host, said, “There are issues if this will invade the privacy of people.”

Rustichini said the research will give people a “good grasp” of how to control a person’s decisions by studying their brains.

Rustichini said the use of the new science is a public policy question.

He said it could be used at airport security checkpoints to deter terrorists, or it could be used at banks when a customer applies for a loan.

One study, conducted by Kip Smith of Kansas State University, tracked the heart rates of subjects who were bidding with real money at a simulated auction.

Similar to a polygraph test, such research hopes to reveal unspoken information known only to the individual being tested.

But some presenters said the research’s potential benefits extend far beyond common economics.

Steven Grant, a presenter from the National Institute of Drug Abuse, said, “Drug abuse can be explained by economic research.”

Grant said it is possible that people who have drug addictions might use different parts of their brains than normal subjects when making long-term decisions.

He conducted brain scans on both drug users and other subjects while they made decisions.

He found that drug abusers tend to choose short-term benefits in lieu of long-term rewards.

The brain scans appeared to show that drug abusers used different parts of the brain in making decisions.

Rustichini said basic assumptions made by economists have been disproved by neuroeconomic research. The research is replacing assumptions with more accurate factors determined empirically from multidisciplinary research.

Dickhaut said he considered himself a multidisciplinarian.

“People have to find a way to talk to each other. Scientists need to come together to make society better,” Dickhaut said.

Nathan Halverson welcomes comments at [email protected]
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