The working of the mind has been considered beyond the scope of economic inquiry. Neuroeconomics, attempting to bridge this gap, studies the relationship between economic decisions and observable phenomena in human brains. Neuroeconomics tries to link the disciplines of neuroscience, economics, and psychology, to obtain a better understanding of economic decision-making. It studies the data that sheds light on the biological processes underlying economic choice, like reaction times, eye tracking, electroencephalography, and functional MRI.

Neuroeconomics involves three central areas of study. These are:
1. Intertemporal choice
2. Social decision-making
3. Decision-making under risk and uncertainty.


The method by which individuals choose what and how much to do at different times is known as intertemporal choice. Neuroeconomics, here, deals with how brain activity and chemistry may influence time preference and impulsivity.

Social decision-making deals with the results of game theory-based choices that involve multiple, interacting subjects, and relates them with observations of the brain and its activity. This field studies how aspects of trust, fairness, and reciprocity in social decisions relate to brain function.

Decision-making under risk and uncertainty includes studies describing the process of choosing between alternatives where the outcomes are fixed but vary according to probability distributions that may or may not be known by the decision-makers. This field studies how risk preference, aversion to risk and loss, and incomplete information over decisions are reflected in the brain and nervous system.


References

Krajbich, I. K., & Dean, M. D. (2015). How can neuroscience inform economics? Columbia. http://www.columbia.edu/~md3405/Working_Paper_15.pdf

Neuroeconomics Definition. (2022, September 1). Investopedia. Retrieved October 17, 2022, from https://www.investopedia.com/terms/n/neuroeconomics.asp

Cohen, J. (2010, January 15). What is neuroeconomics? Yale Insights. Retrieved October 17, 2022, from https://insights.som.yale.edu/insights/what-is-neuroeconomics

Ian Krajbich, Mark Dean, How can neuroscience inform economics?, Current Opinion in Behavioral Sciences, Volume 5, 2015, Pages 51-57, ISSN 2352-1546, https://doi.org/10.1016/j.cobeha.2015.07.005.

(https://www.sciencedirect.com/science/article/pii/S2352154615001035)