Behavioral Finance Roundtable

“Neuroeconomics”

Barry D. Waterhouse, PhD

Union LeaguePhiladelphia, PAMarch 21, 2013

Neuroeconomics

Neural mechanisms underlying decision-making

•Business

•Neuroscience

•Psychology

•Social science

Movement Sensation

Executive Functions

Problem solvingDecision makingWorking memorySensory perceptionSalienceAttentionMulti-taskingComprehensionSequencing Creativity

Cognition

NeuroeconomicsFactors affecting decision-making:

•Prior experience - knowledge•Current behavioral state – affect, arousal •Innate capacity for risk taking •Reward valuation •Uncertainty – duress, anxiety•Reward history – recent vs extended•Stress

Gender - Age - Genetics - Drugs

Single Neuron Activity and Cognition

Behavior

Cognitive Enhancing Drugs

VTA Unit Discharge

Schultz et al, 1997

“One in five Nature readers -- mostly scientists – say they up their mental performance with drugs such as Ritalin, ……”,

“Living the off-label life”, …

December 27, 2008

“Towards responsible use of cognitive-enhancing drugs by the healthy”,

December 7, 2008Greely et al.

Recent Headlines

April 28, 2008

New York Times

Nature

Thursday November 8, 2007The Guardian

Ways to make you think better

Students and exhausted workers have been abusing stimulants for decades. But these days, if you're keen to feel sharper, and work for longer, the drugs available are more effective than they once were - and less likely to make you feel awful afterwards. No wonder then that the abuse of pills such as Ritalin and modafinil is becoming a major problem. Katharine Hibbert reports on the rise of cognitive-enhancing drugs ………

Ritalin…….drug of choice in college dorms for exam week …..

“kiddie coke” “Vitamin R”