What Decision Neuroscience Teaches Us About Financial Decision Making

Posted: 4 Jun 2010

Date Written: December 2009

Abstract

Financial decision making is the outcome of complex neurophysiological processes involving, among others, constant re-evaluation of the statistics of the problem at hand, balancing of the various emotional aspects, and computation of the very value signals that are at the core of modern economic thinking. The evidence suggests that emotions play a crucial supporting role in the mathematical computations needed for reasoned choice, rather than interfering with it, even if emotions (and their mathematical counterparts) may not always be balanced appropriately. Decision neuroscience can be expected in the near future to provide a number of effective tools for improved financial decision making.

Suggested Citation

Bossaerts, Peter L., What Decision Neuroscience Teaches Us About Financial Decision Making (December 2009). Available at SSRN: https://ssrn.com/abstract=1599434 or http://dx.doi.org/10.1146/annurev.financial.102708.141514

Peter L. Bossaerts (Contact Author)

University of Cambridge ( email )

Faculty of Economics
Cambridge, CB3 9DD
United Kingdom

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