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Neuroeconomics: How Brains Decide What Stocks to Trade and What Foods to Eat

Neuroeconomics is the study of how measured brain activity is mapped into mathematical constructs which are associated with choices. Since economics has historically been agnostic about underlying neural mechanisms, this approach is new and controversial. This talk illustrates new ideas from studying brain activity in two important areas; financial trading; and choosing whether to eat tempting foods. In trading, we describe why people are often eager to sell winning stocks and hold on to losing stocks (even when they should do the opposite). In choosing foods, we describe what neural circuits are in charge of resisting temptation to choose unhealthy junk foods that taste good.

Colin Camerer is the Robert Kirby Professor of Behavioral Economics at Caltech. He earned a Ph.D. from the University of Chicago in 1981 and worked at Northwestern, Penn, and Chicago before Caltech. He has published more than 150 peer-reviewed articles and book chapters and wrote or co-edited four books, most notably Behavioral Game Theory in 2003.

Camerer’s research group is interested in the psychological and neural basis of choice, strategizing in games, and trading in markets. His group uses many methods, including MRI, EEG, TMS, studies of chimpanzees, experiments in field settings, and analysis of field data on taxi cabs, sports performance, and movie revenues. Prof. Camerer has been the past president of the Economic Science (experimental economics), the Society for Neuroeconomics, and was elected a Fellow of the Econometric Society.