Neuroeconomics

Neuroeconomics combines neuroscience, economics, and psychology to study how brain processes shape decisions involving choice, risk, reward, and social exchange.

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Reward system: A set of neural circuits that process rewards, motivation, and reinforcement. Its circuits encode anticipated value and influence choices between options.
Expected utility hypothesis: A theory that represents choices under uncertainty as maximization of expected utility. It supplies a formal benchmark for studying neural responses to risky options.
Risk aversion: A preference for a certain outcome over a risky outcome with the same expected value. Neural measures help distinguish valuation of expected returns from sensitivity to uncertainty.
Paul Glimcher: A neuroscientist whose research helped establish neuroeconomics as a field. His work connected neural mechanisms of choice with formal economic models.
Neurorealism: The tendency to treat brain images or neural explanations as especially compelling evidence. It raises concerns about overinterpreting neural findings in economic research.
Subjective value: The value an individual assigns to an outcome, reflecting preferences and circumstances. Neuroeconomic models explain how the brain represents options on a common value scale.
Prospect theory: A theory of choice under risk in which people evaluate gains and losses relative to a reference point. Its departures from expected utility motivate neural studies of framing and loss sensitivity.
Loss aversion: A tendency for losses to have greater psychological impact than equivalent gains. Neuroeconomic studies examine how loss sensitivity appears in valuation and choice.
Colin Camerer: An economist known for research in behavioral economics and neuroeconomics. His experiments and writing helped bring neuroscience into economic analysis.
Reverse inference: The inference from activity in a brain region to the presence of a particular mental process. A region's activity rarely identifies a unique decision process without other evidence.