The Promise (and Limits) of Neuroeconomics
Neuroeconomics – the study of brain activity in people engaged in tasks of reasoning and choice – looks set to be the next behavioral economics: a set of findings about how people make decisions that casts doubt on widely accepted premises about rationality and social life. This essay explains what is most exciting about the new field and lays out some specific research tasks for it.
By enabling researchers to view the mind at work, neuroeconomics puts in question the most basic premise of twentieth-century empiricism, sometimes called positivism or behaviorism: that people are black boxes to one another, and scientific social inquiry must observe only their objective behavior, what they say and do. This premise came to the center of neoclassical economic method via the 1930s work of the hugely important economist Lionel Robbins, and it occasioned a methodological split in social inquiry. Positivists (most importantly, economists) follow the strictures of studying observable behavior, while interpretivists insist that we cannot understand social life without interpreting the minds and intentions of others, even though we cannot view them directly.
The limits of these two methods have restricted progress in understanding three critical issues for legal scholarship: how people solve collective-action problems, why some people are more susceptible than others to extremist political appeals, and whether “commodification” creates a conflict between economic rationality and other values. I show how the progress already made in neuroeconomics could make each of these questions more answerable than it has recently seemed, with potentially significant payoffs.
Economics | Law and Politics
Date of this Version
Jedediah S. Purdy, "The Promise (and Limits) of Neuroeconomics" (March 8, 2006). bepress Legal Series. bepress Legal Series.Working Paper 1093.