Neuroeconomics - 2nd Edition - ISBN: 9780124160088, 9780123914699


2nd Edition

Decision Making and the Brain

Editors: Paul W. Glimcher Ernst Fehr
Hardcover ISBN: 9780124160088
eBook ISBN: 9780123914699
Imprint: Academic Press
Published Date: 27th September 2013
Page Count: 560
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In the years since it first published, Neuroeconomics: Decision Making and the Brain has become the standard reference and textbook in the burgeoning field of neuroeconomics. The second edition, a nearly complete revision of this landmark book, will set a new standard. This new edition features five sections designed to serve as both classroom-friendly introductions to each of the major subareas in neuroeconomics, and as advanced synopses of all that has been accomplished in the last two decades in this rapidly expanding academic discipline. The first of these sections provides useful introductions to the disciplines of microeconomics, the psychology of judgment and decision, computational neuroscience, and anthropology for scholars and students seeking interdisciplinary breadth. The second section provides an overview of how human and animal preferences are represented in the mammalian nervous systems. Chapters on risk, time preferences, social preferences, emotion, pharmacology, and common neural currencies—each written by leading experts—lay out the foundations of neuroeconomic thought. The third section contains both overview and in-depth chapters on the fundamentals of reinforcement learning, value learning, and value representation. The fourth section, “The Neural Mechanisms for Choice,” integrates what is known about the decision-making architecture into state-of-the-art models of how we make choices. The final section embeds these mechanisms in a larger social context, showing how these mechanisms function during social decision-making in both humans and animals. The book provides a historically rich exposition in each of its chapters and emphasizes both the accomplishments and the controversies in the field. A clear explanatory style and a single expository voice characterize all chapters, making core issues in economics, psychology, and neuroscience accessible to scholars from all disciplines. The volume is essential reading for anyone interested in neuroeconomics in particular or decision making in general.

Key Features

  • Editors and contributing authors are among the acknowledged experts and founders in the field, making this the authoritative reference for neuroeconomics
  • Suitable as an advanced undergraduate or graduate textbook as well as a thorough reference for active researchers
  • Introductory chapters on economics, psychology, neuroscience, and anthropology provide students and scholars from any discipline with the keys to understanding this interdisciplinary field
  • Detailed chapters on subjects that include reinforcement learning, risk, inter-temporal choice, drift-diffusion models, game theory, and prospect theory make this an invaluable reference 
  • Published in association with the Society for Neuroeconomics—
  • Full-color presentation throughout with numerous carefully selected illustrations to highlight key concepts


Researchers and graduate students in neuroeconomics, behavioral / cognitive neuroscience, behavioral economics, and cognitive psychology

Table of Contents


Using the Book


List of Contributors

Introduction: A Brief History of Neuroeconomics

Neoclassical Economics

Cognitive Neuroscience

Setting the Stage for Neuroeconomics

Two Trends, One Goal




Part I: The Fundamental Tools of Neuroeconomics

Chapter 1. Basic Methods from Neoclassical Economics


Rational Choice and Utility Theory: Some Beginnings

The ordinal revolution and the Logic of Choice

Quantitative Tests of Qualitative Theories: Revealed Preference

Expected Utility Theory

Using Axioms: The Neoclassical Approach in Neuroeconomics


Chapter 2. Experimental Economics and Experimental Game Theory


Game Theory Described

Game Theory Experiments

Neuroeconomics experiments

Towards a Neuroeconomic Theory of Game Playing


Chapter 3. Computational and Process Models of Decision Making in Psychology and Behavioral Economics


Models of Risky Choice

Models of Riskless Choice

Models of Choice Over Time

Computational Process Models

Diffusion Models of Rapid Decisions




Chapter 4. Estimation and Testing of Computational Psychological Models


Behavioral Data to be Modeled

Methods for Estimating Parameters

Model Comparisons




Chapter 5. Introduction to Neuroscience


The Cellular Structure of Information Encoding in the Brain

The Large-Scale Anatomical Structure of the Brain

Organizing Principles of Representation in the Brain

Plasticity and Memory

Summary and Conclusions


Chapter 6. Experimental Methods in Cognitive Neuroscience


Measurement Techniques

Manipulation Techniques

Conclusion: Convergence Across Methods


Chapter 7. Evolutionary Anthropological Insights into Neuroeconomics: What Non-Human Primates can Tell us About Human Decision-Making Strategies

Introduction: How an Evolutionary Perspective is Important for Neuroeconomics

Understanding Evolutionary Homologies Across Primates

Prospect Theory and Framing Effects in Non-Human Primates

Ambiguity Aversion and the Ellsberg Paradox in Non-Human Primates

What Comparative Work Means for Traditional Economics and Neuroeconomics



Part II: Neural and Psychological Foundations of Economic Preferences

Chapter 8. The Computation of Stimulus Values in Simple Choice


Theory: A Computational Model of Simple Choice

Methodology: How to Identify Stimulus Value Signals?

Evidence: Stimulus Value Signals in Basic Valuation Tasks

Complication: Attention Modulates the Computation and Comparison of Stimulus Values

Theory: How are Stimulus Values Computed?

Evidence for a Causal Role of the Stimulus Value Signals in VMPFC




Chapter 9. Valuation for Risky and Uncertain Choices


Decisions Under Uncertainty and Risk

Models of Risky Choice

Neural Representation of Uncertainty and Risk




Chapter 10. Valuation, Intertemporal Choice, and Self-Control


Valuation in Intertemporal Choice




Chapter 11. Social Preferences and the Brain

Behaviors and Motives

Exploring the Neural Circuitry of Social Preferences: Methodological Concerns

The Neurobiology of Simple Choice

Evidence for the Similarity Between Social Preference Decisions and Simple Reward-Based Decisions

Components of the Social Preferences Network



Chapter 12. Neuroeconomics of Emotion and Decision Making

Introduction: Heart or Head?

Studying Emotion

Incidental Affect: Carry-Over Effects on Decision Making

Emotion’s Impact on Valuation During Choice

Changing Emotions, Changing Choices

General Conclusion: Beyond Two Systems


Chapter 13. Multistage Valuation Signals and Common Neural Currencies

Introduction to Value-Based Decision Making

Stage 1: Valuation of Options – Predicted Valuation Signals

Stage 2: Choice–Action Valuation Signals

Stage 3: Outcome – Experienced Valuation Signals

Conclusion: Multistage Neuro-Cognitive Models of Choice


Chapter 14. Pharmacology of Economic and Social Decision Making

Introduction to Psychopharmacology

Pharmacology of Time Preferences

Pharmacology of Risk Preferences

Pharmacology of Social Preferences



Part III: Learning and Valuation

Chapter 15. Value Learning through Reinforcement: The Basics of Dopamine and Reinforcement Learning


Learning: Prediction and Prediction Errors

Functional Anatomy of Dopamine and Striatum

Responses of Dopamine Neurons to Outcomes

Sequential Predictions: From Rescorla–Wagner to Temporal Difference Learning

Temporal Difference Learning and the Dopamine Response

From Error-Driven Learning to Choice



Chapter 16. Advanced Reinforcement Learning


The RL Formalism


Rewards and Punishments

States, Stimuli, and Perceptual Uncertainty




Chapter 17. The Basal Ganglia, Reinforcement Learning, and the Encoding of Value


Value-Based and Procedure-Based Strategies

Encoding of Values and Strategies by Striatal Neurons

The Role of the Putamen in History-Based Action Selection

Encoding of Long-Term Values and Multistep Reward Prediction Errors by Midbrain Dopamine Neurons

Decision to Wait and the Activity of Dorsal Raphe Serotonin Neurons



Chapter 18. From Experienced Utility to Decision Utility


Experienced Utility

Experienced Utility: Neuroimaging Brain Activations in Humans

Beyond Experienced Utility

Identifying What Does What for Brain Mechanisms of Outcome Utilities

Berridge’s Critique of the Dopamine Reward-Learning Hypothesis

O’Doherty’s Response to the Critique of the Reward-Learning Hypothesis

Integration Between the Two Viewpoints?




Part IV: The Neural Mechanisms for Choice

Chapter 19. Neural Mechanisms for Perceptual Decision Making


Signal Detection Theory and Sensory Representation

Sequential Sampling Models and the Decision Process

Perceptual Decision Making in Humans

Summary and Conclusions


Chapter 20. Value-Based Decision Making


The Twin Threads of Decision Neuroscience

An Overview of the Standard Model for Value-Based Decision Making

Understanding the Choice Circuit

Understanding the Valuation Circuit

Relating the Standard Model To Economic Theory: Rums

Putting it All Together: Relating the Standard Model to Perceptual Decision


Chapter 21. Multiple Systems for Value Learning


Multiple Systems for Learning and Controlling Behavior

Computational Foundations of Multiple Learning Systems

Multiple Neural Systems for Value Learning

What is the Nature of the Interactions Between the Different Systems?

Conclusions: Alternative Systems, More Systems


Chapter 22. Integrating Benefits and Costs in Decision Making

Introduction to Behavioral Ecological Approaches to Decision Making

Anatomy of Cost-Based Decision Making

Linking Stimuli and Actions to Rewards and Making Decisions

Anterior Cingulate Cortex and Effort-Based Decision Making

Contrasting Roles of Different Frontal Cortex Areas in Different Types of Cost-Based Decision Making

A Distributed Network for Making Cost–Benefit Decisions

Choice Representations in Anterior Cingulate Cortex are Invariantly Tied to a Reference Frame Suitable for Foraging

Neuropharmacology of Cost-Based Choice



Chapter 23. Neuronal Circuit Computation of Choice


Models of Decision Making

Adaptive Value-Based Choice




Chapter 24. The Neurobiology of Context-Dependent Valuation and Choice


Behavioral Context Effects in Choice

The Neurobiology of Context-Dependence in Decision-Related Systems

Electrophysiological Studies Of Context-Dependence

Neuroimaging Studies of Context-Dependence in Decision Making

Bridging Context-Dependent Coding and Decision-Making Behavior



Part V: Brain Circuitry of Social Valuation and Social Choice

Chapter 25. The Neural Basis of Strategic Choice

Components of Behavioral Game Theory

Neural Evidence

Conclusions and Future Research


Chapter 26. Brain Circuitry for Social Decision Making in Non-Human Primates


Game Theory

Primate Visuo-Saccadic Circuitry as a Model System for Studying the Neural Basis of Social Decision Making

Reinforcement Learning

Cortical Mechanisms of Reinforcement Learning During Iterative Games

Response Selection by the Frontal Eye Fields and Superior Colliculus




Chapter 27. Understanding Others: Brain Mechanisms of Theory of Mind and Empathy


Defining Concepts

The Study of Theory of Mind

The Study of Empathy and Feelings

Social Emotions: Emotional Contagion, Compassion, Envy, and Schadenfreude

Future Research Directions


Appendix. Prospect Theory and the Brain

Introduction to Prospect Theory

Prospect Theory Measurement

Neuroscientific Data

Conclusions and Future Directions




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About the Editor

Paul W. Glimcher

Paul W. Glimcher, Julius Silver Professor of Neural Science, Economics and Psychology at New York University. Director, Center for Neuroeconomics, NYU. A.B. - Princeton University, Magna cum Laude. Ph.D. -University of Pennsylvania, Neuroscience. Fellow of the American Association for the Advancement of Science, The Association for Psychological Science and the McKnight, Whitehall, Klingenstein and McDonnell Foundations. Investigator of the National Eye Institute, The National Institute of Mental Health, the National Institute of Neurological Disorders and Stroke and the National Institute on Aging. Founding President of the Society for Neuroeconomics. Winner of the Margaret and Herman Sokol Faculty Award in the Sciences, 2003. Winner of NYU’s Distinguished (Lifetime Accomplishment) Teaching Award, 2006. Member of the Dana Alliance for Brain Initiatives. Publications in Nature, Science, Neuron, Journal of Neurophysiology, American Economic Review, Quarterly Journal of Economics, Games and Economic Behavior, Vision Research, Experimental Brain Research, MIT Encyclopedia of Cognitive Science, International Encyclopedia of Social and Behavioral Science and numerous edited volumes. He is the author of: Decisions, Uncertainty and, the Brain: The Science of Neuroeconomics, 2003 from MIT Press. Winner of the American Association of Publishers Medical Sciences Book of the Year, 2003. Neuroeconomics. Decision Making and the Brain, 2009 from Academic Press. Winner of the American Association of Publishers Economics and Social Sciences Book of the Year Awards, 2009. Foundations of Neuroeconomic Analysis, 2011 from Oxford University Press. Neuroeconomics. Decision Making and the Brain 2nd ed. 2013. Professor Glimcher’s work has been covered by the popular press in the Wall Street Journal, Time, Newsweek, The Los Angeles Times, Money Magazine, New Scientist, and on National Public Radio, The BBC, Le Monde, Die Welt, Frankfurter Allgemeine, La Vanguardia, Fox News, and NOVA amongst others.

Affiliations and Expertise

New York University, Center for Neural Sciences, NY, USA

Ernst Fehr

Affiliations and Expertise

University of Zurich, Department of Economics, Laboratory for the Study of Social and Neural Systems


"This fully revised, second edition comes five years after the first and reflects the tremendous growth in the field of neurobiology of decision making…The text, uniformly well written and accessible, does not shy away from controversies in the research. This is an excellent text for either a graduate course or a very advanced undergraduate course on the subject." Summing Up: Recommended.--CHOICE Reviews Online, June 2014
"This book describes neuroeconomics, a combination of neuroscience and behavioral economics, with the goal of understanding how economic policies influence motivation on a neuropsychological level and, ultimately, behavior…This is an excellent book…It should be in the libraries of students and professionals interested in neuroeconomics."Rating: 4, April 4, 2014

Reviews for the First Edition:
Neuroeconomics is a timely collection of papers by leading researchers from both sides of the border between economics and neuroscience…The book should be of interest to anyone who has ever wondered about the mechanics of how decisions are made in the brain, and what it means about human nature.”--VINCE CRAWFORD, DISTINGUISHED PROFESSOR OF ECONOMICS, UNIVERSITY OF CALIFORNIA, SAN DIEGO, USA
“Economists pride themselves on rigorous parsimony. By taking the neural correlates of behavior into account, potentially explanatory variables explode. This book shows when digging deeper nonetheless pays for economics, and how to do it well.”--CHRISTOPH ENGEL, EXECUTIVE DIRECTOR, MAX PLANCK INSTITUTE FOR RESEARCH ON COLLECTIVE GOODS, BONN, GERMANY
“For those onlookers who can’t quite accept that neuroscience may provide insight into how we decide what course of action to follow, the contributors to this comprehensive volume offer some very compelling, and very serious experimental and theoretical insights. Highly recommended, and enormously provocative.”--FLOYD BLOOM, PROFESSOR EMERITUS, DEPARTMENT OF NEUROPHARMACOLOGY, THE SCRIPPS RESEARCH INSTITUTE, LA JOLLA, USA