Event Tackles Decision Making Theory

During a symposium last night in Harvard Hall, four scholars from prominent universities presented research that stretches the limits of traditional economics with modern scientific advances.

The two-hour event—entitled “A Symposium on Economic Decision Making”—focused on the nascent field of neuroeconomics, a combination of neuroscience, psychology, and economics that challenges classical assumptions of economic theory.

“Economics is actually an abstract, profoundly wrong model of human behavior,” said Drazen Prelec ’78, a professor of management science at MIT, later redeeming the postulates behind economics by saying that “without those false assumptions, we could not have been making the progress we have been making.”

Others voiced similar criticisms of economics. Harvard Economics Professor David I. Laibson ’88 noted that economics reduces individuals into simple decision-makers instead of acknowledging that people have several competing mental processes.

Brown Neurobiology Professor Peter E. Politser argued that economics ignores the nuances of decision making.

“To understand decisions across many contexts, we often have to ask not just what people choose, but how and why,” he said.

Throughout the symposium, the professors stressed the discipline’s infancy.

“I think the field of neuroeconomics is not fully defined,” said Yale Neurobiology Professor Daeyeol Lee at the beginning of his presentation on the similarity between human and monkey decision making paradigms.

Laibson cautioned against applying preliminary findings of the developing field—which at present may have primarily microeconomic implications—to the current recession, but maintained that “unambiguously, the current crisis has extraordinarily rich psychological origins.”

The event was co-sponsored by the Harvard Society for Mind, Brain, and Behavior and the Harvard Undergraduate Economics Association. Sophie R. Wharton ’11, secretary of the HSMBB and one of the lead organizers of the symposium, said that organizers were pleased with the event, which drew students from Tufts and Harvard Medical School.

“I think it’s cool to see an important area of study at the very beginning,” said attendee Aaron P. Mattis ’12. “It seems like something where undergraduates can have a lot of input.”