Neuroeconomics of Brexit

With all the uproar that’s been going on after the people of United Kingdom decided to leave the European Union, it seemed appropriate to write about decision making. If you struggle to make decisions, it is perhaps not a news to you that decision making is complex and studying it requires the expertise of multiple fields. Neuroeconomics, a comparatively nascent field in Neuroscience, aims to find, predict and model the basis of decision making integrating the fields of Biology, Psychology, Economics and Neuroscience. When I say it is a “nascent field”, I mean it has not been systematically studied for long. However, 18th century philosophers Emmanuel Kant and Spinoza had wondered how we make our choices and how free are we to make those choices. It is not surprising that people have been questioning decision making because everyday we make hundreds of decisions – what to wear for work, to drive or take the bus, to order pizza or salad for lunch and so on.

The three major assumptions of the theory of decision making are: 1) There should be more than one choice, 2) We make goal oriented decisions, 3) We choose in a non-random way. Assuming all of these, neuroeconomics explores our decision making processes through elegant experiments. The Ultimatum Game is a famous experiment in this field. In this game, there are two participants who do not know each other. Participant 1 is given $100 and s/he can divide it in anyway s/he likes. S/he can make a 1-99 or 50-50 or 40-60 division and so forth. If Participant 2 accepts the division, both share the money in the aforementioned way, but if participant 2 rejects the division no-one gets any money. Now, if you think about it, the normative decision (the decision that you rationally expect) is participant 2 should accept any division that participant 1 makes because even $1 is greater than getting no money. Surprisingly, we seem to dislike “unfairness” to the extent that we are more prone to sacrifice our own gain for it. You, who have been following Brexit, does that sound familiar? All politicians for Brexit had to do was tell people Britain is being treated unfairly inside the EU (rigid trade policies, less job for Britishers, etc); the rest was taken care of by the neurons firing in our brain. In fact, by controlling specific areas of the brain we can sway people in one way or another (Sanfly et al 2003). This “Ultimatum game” effect has also been found on monkeys, which means evolutionarily we might be predisposed against unfairness.

In another provocative experiment by Benjamin Libet, it was shown that we are aware of our decision 8 sec after our neurons have actually made the “decision”. This experiment gives rise to an array of questions like What is consciousness – is it when we are aware of our decision or when our neurons fire to take the decision? Was Spinoza right in saying there is no free will, we just think we are making our “own” decision? Years later Rabindranath Tagore, the nobel laureate Bengali poet wrote seeking freedom is meaningless since even the creator is bound by his own creation. A lot of the times we see people justifying their decisions and do so ourselves- “it was for him”, “the job paid more”. But what if all our rationale is justification? This is something to think about for the people of Britain who have taken 8 days to come to the realization that they had voted to leave EU and “free” themselves of European fetters.

The field of Neuroeconomics however, is less concerned with the philosophical deliberations and more concerned with the mysterious underlying processes that make our decisions 8 secs before we are aware of them. Those few seconds have already helped quadriplegics feed themselves – it will be interesting to see how much more information that 8 sec contains.

 

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