Irrational Economist_ Making Decisions in a Dangerous World - Erwann Michel-Kerjan [48]
In the London trading floor experiment, the operators were in their “natural” work environment and thus could either make or lose money in what was clearly a real-life situation for them. The study revealed that testosterone (a hormone involved not only in sexuality but also in impulsive and risky behaviors) and cortisol (a hormone whose level increases under stress) are strongly influenced by the volatility of the market. One major finding was that these two hormones—one favoring impulsivity and the other one accompanying stress—play “hot and cold” in the sense that they have to remain within a certain concentration range in order for a trader to perform well on the market. One can see here a hint that emo-rationality is “in our blood” as well.
NEUROECONOMICS AND BEYOND
The aforementioned study poses an additional question to neuroeconomics, inasmuch as economists study more than one individual at a time: What can we learn from a single brain (or a dozen) that can be generalized so as to advance our understanding of the complexity of markets? This question of how to scale-up results from the very micro to the very macro is of interest to both neuroscience and economics.16 Neuroscientists wonder about the parallels between the activity of an individual neuron and the integration of billions of neurons in the brain of any individual. And economists wonder about those between local individual behavior (micro-economics) and national or international aggregate behaviors (macro-economics).17
As a brain scientist, I am tempted to ask: Can we make any progress in understanding complex interactions by studying electrical activity or metabolic estimation of a few cubic millimeters of brain matter? The answer is: It depends. This information will never be sufficient to explain, predict, or decode human behavior and measure economic decision per se. But as we saw in the examples discussed above, neuroeconomics is clearly capable of giving information that other fields might have guessed at but never provided evidence for. And by liberating neuroeconomics from its laboratory constraints, we ensure that the best is certainly to come.
All in all, whether one is a neuro-aficionado, a neuro-opportunist, or a neuroskeptic, it can hardly be denied that we are currently witnessing a true paradigm shift whereby neuroscience might help refine, for better or worse, fundamental concepts that we take for granted, such as genuine notions of human behavior, (ir)rationality, conscience, or free will. These advances are already having major implications in our lives. For example, programs have been launched to evaluate how neuroscience might impact public policy.18 Applications range from justice (What would happen if one day we found reliable ways to distinguish a true statement from a lie? Can we measure emo-rationality, and could we use those findings to screen or select judges or witnesses?) to new strategies for informing customers and fighting against addictions and obesity, for example. A better understanding of the decision-making processes of people who suffer from the latter pathologies could save a lot of money being spent on health care. It could also save lives.
Clearly emo-rationality is an in-between world that challenges the belief that rationality and emotion are separate. As I have argued in this chapter, they might be united in a more complex interdependent way than that represented by the two simple boxes we are used to. A lot of people are going to be nostalgic for the “good old days” when decision making was either rational or not.
My way of looking at it is to consider ourselves extremely lucky. If our brains were not so complex (structurally and functionally), and our environments so rich (informationally speaking), we would not be asking ourselves these questions today.
And we would certainly not be able to