Using Biomedical Technologies to Inform Economic Modeling: Challenges and Opportunities for Improving Analysis of Environmental Policies

Advances in biomedical technology have irrevocably jarred open the black box of human decision making, offering social scientists the potential to validate, reject, refine and redefine the individual models of resource allocation that form the foundation of modern economics. In this paper we (1) provide a comprehensive overview of the biomedical methods that may be harnessed by economists and other social scientists to better understand the economic decision making process; (2) review research that utilizes these biomedical methods to illuminate fundamental aspects of the decision making process; and (3) summarize evidence from this literature concerning the basic tenants of neoclassical utility that are often invoked for positive welfare analysis of environmental policies. We conclude by raising questions about the future path of policy related research and the role biomedical technologies will play in defining that path.neuroeconomics, neuroscience, brain imaging, genetics, welfare economics, utility theory, biology, decision making, preferences, Institutional and Behavioral Economics, Research Methods/ Statistical Methods, D01, D03, D6, D87,

Prospect theory and political decision-making

Risk is a central feature of political decision making. Prospect theory, an empirically correct theory of choice under risk that deals precisely with this condition, therefore seems to have much to offer political science. Prospect theory's central finding is that individuals' attitude toward risk depends on whether they face losses or gains. Confronting gains, individuals are risk averse in their decision making; confronting losses, they are risk accepting. Where do these preferences come from? Do they also hold for collective decision making? How can prospect theory help us to solve puzzles in political science? This article addresses these questions by discussing some advances in evolutionary biology, behavioural economics, psychology, neuro-economics and political science. The article shows that there is increasing evidence that prospect theory preferences have an evolutionary origin and that these preferences extend to collective decision making. Moreover, it demonstrates that political science can indeed gain from applying prospect theory, as insights from prospect theory help to solve puzzles such as why some governments pursue electorally risky welfare state reform but others do not. © 2011 The Author. Political Studies Review © 2011 Political Studies Association

Biological correlates of the Allais paradox

We conducted a questionnaire study with student subjects to look for explicit correlations between selected biological characteristics of the subjects and manifestation of the Allais paradox in the pattern of their choices between sets of two pairs of risky prospects. We find that particular bio-characteristics, such as gender, menstrual cycle, mother’s age, parenthood, digit ratio, perceived negative life events, and emotional state, can be related to the paradox. Women, in particular if not menstruating, are less susceptible to the paradox. Those born to not-too-young mothers are also less prone to the paradox. The same holds true for those who father children, those with high prenatal testosterone exposure, who have reported many negative life events, and those who were anxious, excited, aroused, happy, active, and fresh at the time of the experiment. Further, left-handers and atheists may be less inclined to exhibit the paradox.Allais paradox; choice under risk; biological characteristics

Good policies for bad governments: behavioral political economy

Politicians and policymakers are prone to the same biases as private citizens. Even if politicians are rational, little suggests that they have altruistic interests. Such concerns lead us to be wary of proposals that rely on benign governments to implement interventionist policies that "protect us from ourselves." The authors recommend paternalism that recognizes both the promise and threat of activist government. They support interventions that channel behavior without taking away consumers' ability to choose for themselves. Such "benign paternalism" can lead to very dramatic behavioral changes. But benign paternalism does not give government true authority to control our lives and does not give private agents an incentive to reject such authority through black markets and other corrosive violations of the rule of law. The authors discuss five examples of policy interventions that will generate significant welfare gains without reducing consumer liberties. They believe that all policy proposals should be viewed with healthy skepticism. No doctor would prescribe a drug that only worked in theory. Likewise, economic policies should be tested with small-scale field experiments before they are adopted.Macroeconomics ; Economics ; Economic policy

Innovation and Entrepreneurship: The Role of Prospect Theory in Decision-Making

This chapter discusses prospect theory, which describes how people evaluate choices in terms of potential gains and losses and tend to be loss-averse. When it comes to innovation, the theory suggests that people are risk-averse, but may be more likely to take risks if they perceive potential losses instead of gains. The theory can also help understand how entrepreneurs make decisions. This chapter also mentions advances in behavior genetics and epigenetics that may influence innovation-promoting behaviors, but culture and how ideas spread are also important. To move innovation forward, it is important to carefully analyze risks, benefits, costs, and potential impacts and involve all relevant stakeholders in the process of innovation development and implementation

The Origin of Behavior

We propose a single evolutionary explanation for the origin of several behaviors that have been observed in organisms ranging from ants to human subjects, including risk-sensitive foraging, risk aversion, loss aversion, probability matching, randomization, and diversification. Given an initial population of individuals, each assigned a purely arbitrary behavior with respect to a binary choice problem, and assuming that offspring behave identically to their parents, only those behaviors linked to reproductive success will survive, and less reproductively successful behaviors will disappear at exponential rates. When the uncertainty in reproductive success is systematic, natural selection yields behaviors that may be individually sub-optimal but are optimal from the population perspective; when reproductive uncertainty is idiosyncratic, the individual and population perspectives coincide. This framework generates a surprisingly rich set of behaviors, and the simplicity and generality of our model suggest that these derived behaviors are primitive and nearly universal within and across species

Retinoblastoma, the visible CNS tumor: A review

The pediatric ocular cancer retinoblastoma is the only central nervous system (CNS) tumor readily observed without specialized equipment: it can be seen by, and in, the naked eye. This accessibility enables unique imaging modalities. Here, we review this cancer for a neuroscience audience, highlighting these clinical and research imaging options, including fundus imaging, optical coherence tomography, ultrasound, and magnetic resonance imaging. We also discuss the subtype of retinoblastoma driven by the MYCN oncogene more commonly associated with neuroblastoma, and consider trilateral retinoblastoma, in which an intracranial tumor arises along with ocular tumors in patients with germline RB1 gene mutations. Retinoblastoma research and clinical care can offer insights applicable to CNS malignancies, and also benefit from approaches developed elsewhere in the CNS