neuroeconomics
n. a rapidly emerging field that focuses on understanding how the brain assesses the costs and benefits of the possible outcomes of specific actions and then uses this information to make choices. Combining perspectives and techniques from neuroscience, psychology, and economics, the field addresses the physiological basis of strategic thinking and decision making under uncertainty and examines brain function when individuals perform such choice-behavior tasks as formulating or expressing preferences and beliefs, evaluating decisions, categorizing risks and rewards, computing value, and delaying gratification. Neuroeconomics challenges the assumption that decision making is a logical, analytical process—a simple matter of utility maximization—suggesting instead that it often involves emotion and other psychological variables. For example, individuals making buying decisions tend to show overactivation in the “wanting” or
reward area of the brain, while individuals making decisions about money during times of economic volatility show strong activation in the areas of the brain associated with fear.