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Your Money & Your Brain
The subtitle is How the New Science of Neuroeconomics Can Help Make You Rich, written by financial journalist Jason Zweig. I enjoyed the content of this book, and would recommend it as a stimulating source of ideas, but with some caveats:
1. The new science of neuroeconomics cannot help make you rich, unless perhaps you have inherited a scanner and then rent scanner time to neuroeconomists (often $500 an hour or more). Or unless you decide to simply buy and hold, compared to some other foolish plan you might have had.
2. I would have liked more emphasis on the tentative nature of neuroeconomics results. Most studies have very few data points (see #1). And if human choice is so context-dependent -- a message of the book -- doesn't it matter if people are removed from their normal environment, told they are in an experiment, and subjected to a loud, whirring machine?
3. What does it really mean if some part of your brain lights up? Who really knows?
4. The book mixes in results from experimental economics, surveys, and field experiments. That's fine, but if the neuro results had to stand alone on an open plain they would look less impressive.
I genuinely am a fan of neuroeconomics, but in the interests of science it's important not to oversell it.
Posted by Tyler Cowen on September 2, 2007 at 07:17 AM in Books | Permalink
Comments
#1 made me chuckle. I remember hearing that neuroeconomists (maybe all neuroscientists) only use right-handed people in their studies because they have a better understanding of a right hander's brain than a left hander's brain. But maybe that's not true ...
Posted by: AZ at Sep 2, 2007 8:55:16 AM
I used to link to more brain scan studies on my blog. But I've developed the same skepticism about how easy it is to interpret the results. The biggest problem I see is that the work is so expensive that the number of subjects in any experiment is usually pretty low. Hard to get statistical significance out of it.
Posted by: Randall Parker at Sep 2, 2007 1:45:06 PM
I'm really surprised sometimes the skepticism that suddenly pours out when brain scans are mentioned. One could--and David Hume has--argued you can doubt the inference the causal effects from hitting one ball against another. I find brain scans take a far less leap of faith than inference from regressions.
Posted by: Tom S. at Sep 2, 2007 2:52:44 PM
You've inspired me to start making use of my region's excellent libraries again. Work and internet usage (and book selling chains) have all intruded on that time. Thanks for the inspiration- a tangible contribution to my quality of life from your blog, Tyler.
Posted by: Hopefully Anonymous at Sep 2, 2007 3:41:06 PM
Let's face it : results, sometimes ordinary, derived from such an obscure method would not make up a paper in a decent journal if you don't overstate them. Besides, given budget constraints to have a decent sample size, a well-trained researcher in economics would hardly engage herself in this sort of work. I may be mistaken, but it seems to me a desperate attempt to create a chance of winning a "nobel" prize. Here is where the "tentative" nature of neuroeconomics lies on.
Posted by: SA at Sep 2, 2007 7:51:27 PM
Neuroeconomics is a rather striking example of "parts" thinking and has more than the usual shortcomings of such thinking because of the sweeping conclusions from very limited evidence. "Parts thinking" is very prevalent and comes from our widespread training in critical thinking which is about justifying our thoughts rather than being based on how we think. It is based on inaccurate theories about how the human mind functions.
Instead of more "parts thinking" such as neuroeconomics we need more integrative thinking based on our recent well-researched understandings from Mind Science as a whole.
Posted by: Graham Douglas at Sep 3, 2007 3:11:15 AM
As someone in neuroscience research, I got a big kick out of #3, so thanks for that. It's a funny term that gets thrown around a lot even among experts, and in my humble opinion, it has become one of the most trite, meaningless phrases. Unfortunately the popular press has picked up on it because of the belief that it offers nearly a direct visualization of the brain's activity.
For anyone who stumbles upon this, the brain "lighting up" is most often discussed as a result of functional magnetic resonance imaging (fMRI) studies, which is an indirect measure of neural activity. fMRI measures the blood-oxygen level dependent (BOLD) signal, which is a metabolic measure thought to correlate to local neural activity. I think the only thing that is truly clear is that the metabolic requirement for a particular region of the brain has increased for some reason or another, and there is a correlation with that increase and whatever task was performed to elicit it. However, the link to direct neural activity is not quite as well understood.
Having said that, good studies should be using multiple lines of evidence that can tell the same story. It has become way too easy to publish fMRI studies within our ridiculously large body of literature, something about which my field should truly be embarrassed. The major news outlets are not helping when they sensationalize these results in headlines that claim that areas of the brain for "lying" or "altruism" or any number of incredibly complex behaviors have been found.
Additionally, I should note that fMRI studies are not necessarily the Spawn of All Things Evil, either. It is an important technology, especially in its most recent extension in the form of diffusion tensor imaging (DTI), a technology that should be watched for anyone interested in the field. However, I must reiterate again that all experimental measures are subject to misinterpretation, which is why the story they tell should be corroborated heavily with as many experimental modalities as possible.
Posted by: anon at Sep 3, 2007 11:27:26 PM
Wish you a happy Halloween. On this special festive occasion we are conducting a giveaway of Zweig's book which you have profiled in your post.
Enjoy and Good Luck!
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