But there is a Woodford paper about neuroeconomics there, one that is related to the quote we had up for today’s ‘discussion tuesday‘.  The paper can be found here.

I had no idea that Woodford did neuroeconomic models of discrete choice – this is an area I’m ridiculously interested in.  I have his “interest and prices” sitting next to me, and it is a very good monetary economics book, but neuroeconomics is a whole other field!  Did anyone else know this?  Does anyone else have any extra literature I should take a look at?  I certainly know what I’ll be reading before bed tonight!

Under Samuelson’s guidance, generations of economists have based their research not on any physical structure underlying thought and behavior, but only on the assumption of rationality.

As a result, Glimcher is skeptical of prevailing economic theory, and is seeking a physical basis for it in the brain. He wants to transform “soft” utility theory into “hard” utility theory by discovering the brain mechanisms that underlie it.

This is cool.  Economists want to be reductionist, but we were unable to boil down our theory quite far enough and had to settle on some underlying assumptions of human nature – assumption that were based on “conducting experiments in our own heads”.  Neuroeconomics provides a route for us to actually push the ontological envelope and create a more objective, mechanistic, way to describe the underlying elements of human action.

However, the risk is that we allow this view to cloud our thinking on choice – no matter how far neuroeconomics evolves we will never clearly decipher whether actions are the result of determinism or free will.  By describing action in a deterministic way, we may treat human action as “too deterministic”, leading to a bias towards excessive control and meddling.

Dualists about the mind and brain – those who hold that there are thinking substances like souls in the world as well as all the ordinary physical stuff – say that the mind sees and thinks and wants and calculates. Contemporary neuroscience dismisses this as crude, but Hacker argues that it just ends up swapping the mind with the brain, saying that the brain sees and thinks and wants and calculates. He says, “Merely replacing Cartesian ethereal stuff with glutinous grey matter and leaving everything else the same will not solve any problems. On the current neuroscientist’s view, it’s the brain that thinks and reasons and calculates and believes and fears and hopes. In fact, it’s human beings who do all these things, not their brains and not their minds. I don’t think it makes any sense to talk about the brain engaging in psychological or mental operations.”

Now, I agree with Peter Hacker that language is important – and if we are not careful some of the claims that come out of neuroscience can sound incredibly deterministic.

However, there are two issues that come up here:

1. Hacker immediately assumes dualism, that the mind and brain are separate.  But is this true?  Could it be that what we believe is consciousness is really just an evolutionary device to make us function as we do, it has certainly given us an advantage as a species.  This is very very deterministic to be sure – but this doesn’t mean it is false.
2. The mind and body, even if they are separate, are heavily inter-related.  Decisions are made on the basis of information, costs, and benefits, that are related to how our brain functions.  In the same way that economists see choice as “determined” by costs and benefits, it is unsurprising that a neuroscientist would talk about the functioning of the brain as “determining” outcomes.

Now, I would prefer to move solely to the second point, I will accept dualism.  In that case, the methodological issue that Hacker is uncomfortable with is how we translate what a neuroscientist is saying – and exactly the same issue exists in economics.

Ultimately, even if we say that costs and benefits “determine” choice we are not really arguing about determinism and free will directly.  However, it may SOUND like this type of analysis assumes determinism – as it is saying “given a set of costs and benefits this outcome/choice will result”.

The key issue is, ex-ante could the individual (or the mind) decide to make a different choice – determinism would say that, given these costs and benefits this choice must be made, free will implies that the individual has the ability to make any choice.  This is not an issue economists and neuroscientists delve into because they are not trying to figure out whether we have determinism or free will – they are just trying to understand the environment that influence choice.  In fact, it is something we CAN’T OBSERVE and so it is an issue you can’t really solve.

Now I think Harker is the one mixing the ideas of studying the costs and benefits that are processed in the brain, and the actual direct choice.  The fact is that the brain DOES determine these costs and benefits, it does determine the feelings of fear and emotion – and that is what neuroscients are studying.

How individuals subjectively interpreted these costs and benefits is important – but as economists know this is unobservable, and requires both an ability to “live” someone elses life AND an answer to whether people have free will or whether their actions are deterministic.  I hardly see how criticising neuroscients for not studying the unanswerable sections of choice makes any sense – other than as a warning regarding how they frame there own results.