Neuroeconomics and hyperbolic discouting
Master thesis
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http://hdl.handle.net/11250/135320Utgivelsesdato
2008Metadata
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Sammendrag
The exponential discounting method is today the most used in economics, and it has been the
dominant discounting method for many years. However there are many economists that have
started to question this method. One of the reasons for this is that it does not capture the way
we humans tend to behave in many types of discounting situations. In this assignment I will
introduce the hyperbolic discounting method. This is a more flexible discounting function that
opens for human irrationality and preference reversals.
The brain holds the answer too many of the questions about human behaviour. Over the last
years a field called neuroeconomcs have captured the attention of many economic researchers.
Neuroeconmics opens the door for neuroscience into the economic theory. Although this is a
young field in economics it has produced a lot of interesting discoveries. By using tools from
neuroscience we are able to understand the physiological process that finds place when we are
facing different kinds of economic decisions, like discounting decisions. I start my theses by
giving an introduction to this research, and present some of the discoveries that have been
done.
I will then use the knowledge form neuroeconomics to see if it can enlighten the discounting
theory. Then I will present a framework I have made, this is a tool to analyze some of the
decision we makes.
At the end of my assignment I will present a pilot of an experiment that I have performed.
This is a discounting experiment to se what discounting method that fits the subjects in the
experiment best. However I have just done a pilot for this experiment so the number of
subjects that were participating is not enough to make any certain conclusions, but I will
present a analyze of the material I got from the experiment. I will also give a run trough of the
process of performing the pilot.
Beskrivelse
Masteroppgave i økonomi og administrasjon - Universitetet i Agder 2008