Neuroeconomics, Illustrated by the Study of Ambiguity-aversion

This paper is about the emerging field of neuroeconomics, which seeks to ground economic theory in details about how the brain works. This approach is a sharp turn in economic thought. Around the turn of the century, economists made a clear methodological choice, to treat the mind as a black box and ignore its details for the purpose of economic theory (13). In an 1897 letter Pareto wrote It is an empirical fact that the natural sciences have progressed only when they have taken secondary principles as their point of departure, instead of trying to discover the essence of things. ... Pure political economy has therefore a great interest in relying as little as possible on the domain of psychology (quoted in Busino, 1964, p. xxiv (14)).