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Experimental Neuroeconomics and Non-cooperative Games-Chapter 5

Authors
Publisher
Elsevier Inc.
Identifiers
DOI: 10.1016/b978-0-12-374176-9.00005-1
Disciplines
  • Economics
  • Mathematics

Abstract

Publisher Summary Neuroeconomics research helps to disentangle the complex interrelationships between the neural mechanisms with which evolution has endowed the brains, the mechanisms that the brains have built into external institutions, and the joint computations of these mechanisms from which social and economic outcomes emerge. Game theory provides a convenient platform for neuroeconomics studies because it formally connects the strategic decisions of multiple individuals to group-level outcomes through a precisely defined mechanism. Game theory can entail substantial abstraction. While the level of abstraction created by game theory has substantial advantages, it can also create uncertainty with respect to the way in which laboratory participants perceive the game environment. This can lead to difficulties in interpreting participants' decisions, especially when those decisions are at odds with the constructed notions of rationality. It might be tempting to attribute the failure of a theory to participants' failures to understand the incentives associated with a game. An alternative explanation is that the decisions of irrational participants are fully rational, but from an alternative perspective.

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