Table of Contents

Don't Hate, Appreciate: Self-Regulating Neuroenhancement

Jasper L. Tran, George Mason University

Testosterone and Trading: A Biological Driver of Asset Mispricing

Amos Nadler, University of Western Ontario - Finance-Economics Area Group
Peiran Jiao, University of Oxford - Nuffield College
Veronika Alexander, Claremont Colleges - Center for Neuroeconomics Studies
Paul J. Zak, Claremont Graduate University - Center for Neuroeconomics Studies
Cameron J. Johnson, Loma Linda University


"Don't Hate, Appreciate: Self-Regulating Neuroenhancement" Free Download
University of La Verne Law Review, Vol. 37, 2015, Forthcoming

JASPER L. TRAN, George Mason University

A recent rise in abusing neuroenhancing pharmaceuticals without a prescription, especially in academic settings, has generated a lot of press coverage. Movies like Lucy and Limitless “predict[] a future in which a smart pill allows one to achieve almost limitless learning and memory ability.� Whether and how regulations should be introduced to address neuroenhancement remain open questions.

A fairness problem raises accessibility concern: some individuals have access to neuroenhancing pharmaceuticals while others do not. Furthermore, the fairness problem could lead to coercion when there is an unequal power dynamic, especially in the employment context. There is also discrimination against the non-enhanced or against the sick, disabled and unfortunate ones that are completely outside of enhancement. The fairness problem calls for a solution that guarantees accessibility to almost everyone to improve his/her cognitive functions.

This paper explores these questions, and proposes to allow each individual, either as adult or a parent of minors, to self-regulate his/her or his/her children’s use of neuroenhancing pharmaceuticals. Government efforts and funding should instead be focused on educating users on the side effects of neuroenhancers. There should be a strict prohibition against coercion and discrimination in the employment settings. With neuroenhancing internal devices, the FDA should defer to the medical professionals to determine whether an individual would benefit from such technology without much harm.

There are three main arguments for this proposal. First, this proposal would likely solve the current systemic unfairness problem and level the playing field for individuals not having access to neuroenhancing pharmaceuticals. Second, this proposal would likely promote individualism, which aligns well with our Constitution’s guaranty of freedom. Third, this proposal would likely result in a positive net effect on the society at large, such as “smarter,� less stressed and healthier people, more innovations, preserving healthcare resources, and ultimately benefiting the U.S. economy.

"Testosterone and Trading: A Biological Driver of Asset Mispricing" 

AMOS NADLER, University of Western Ontario - Finance-Economics Area Group
PEIRAN JIAO, University of Oxford - Nuffield College
VERONIKA ALEXANDER, Claremont Colleges - Center for Neuroeconomics Studies
PAUL J. ZAK, Claremont Graduate University - Center for Neuroeconomics Studies
CAMERON J. JOHNSON, Loma Linda University

Traditional finance theories state that asset prices are determined by firm fundamentals, such as per-share earnings and relative risk. However, a growing body of literature shows prices often do not reflect underlying value and are largely formed by expectations of future cash flows that are discordant with financial fundamentals and are vulnerable to cross-sectional sentiment influences. This paper demonstrates asset mispricing by a biological driver of competitive bidding — testosterone — in experimental asset markets. We show that testosterone drives competitive bidding leading prices to dissociate from fundamental value, producing larger and longer-lasting bubbles. Further, testosterone reduces trading performance and increases trader overconfidence.


About this eJournal

This eJournal distributes working and accepted paper abstracts focused on research where economic outcomes are the product of many individual decisions, constrained by scarcity, and equilibrium forces that simultaneously shape a person's social networks and the institutionally defined rules of the game. Decisions are made by computations in the brain which produce action-choices that directly affect the homeostatic wellbeing of the individual and choices that indirectly change wellbeing by changing an individual's future constraints, the scope of their social networks, and their message sending rights within the institutions they participate. Neuroeconomics broadly speaking is interested in the study of these computations and the resulting choices they produce. This includes experiments that attempt to understand the mechanisms of neuronal computations that produce action-choices, theories which predict how neuronal computations in socio-economic environments produce decisions, outcomes and wellbeing, and policy which use our understanding of neuoroeconomic behavior to either build or defend better solutions to societal problems.

Editors: Michael C. Jensen, Harvard University, and Kevin A. McCabe, George Mason University


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Advisory Board

Neuroeconomics eJournal

Harris & Harris Group Professor, Massachusetts Institute of Technology (MIT) - Sloan School of Management, Principal Investigator, Massachusetts Institute of Technology (MIT) - Computer Science and Artificial Intelligence Laboratory (CSAIL), National Bureau of Economic Research (NBER)

Professor, Baylor University - Department of Neuroscience

Professor of Economics and Law, Chapman University - Economic Science Institute, Chapman University School of Law