Principal Investigator Drazen Prelec
Project Website http://nel.mit.edu/
The MIT Sloan Neuroeconomics Lab is a multidisciplinary research center studying problems at the intersection of economics, management and cognitive neuroscience.
Projects are stimulated by economic theory and decision analysis, which provide an ideal standard, as beautiful conceptually as it is flawed empirically. We study behavior that appears anomalous in light of the rational model, focusing especially on financial, medical and consumption choices. These anomalies provide crucial evidence about human decision making.
Methods include functional MRI, lab experiments, game theory, Bayesian modeling and machine learning.
Behavioral economics: Projects here begin with a puzzling observation about human behavior. For example, why do people buy lottery tickets and insurance at the same time? Why are they willing to spend much more when purchasing with a credit card, and why do many prefer debit cards over credit cards? Why do they succumb to addictive overconsumption? Why do citizens bother to vote in a referendum, when their vote is not likely to affect the result? These puzzles are sought and exploited for theoretical leverage, for their ability to force a rethinking of some aspect of the rational model, usually leading to an alterative computational theory.