Table of Contents

Preference Cloud Theory: Imprecise Preferences and Preference Reversals

Oben K. Bayrak, University of Umea - Centre for Environmental and Resource Economics
John D. Hey, University of York (UK), University of Bari - Faculty of Economics

EEG Activity Associated to Investment Decisions: Gender Differences

Armando Freitas da Rocha, Research on Artificial and Natural Intelligence (RANI)
João Paulo Vieito, Scholl of Business Studies - Polytechnic Instituto of Viana do Castelo
Eduardo Massad, University of Sao Paulo (USP)
Fábio T. Rocha, Research on Artificial and Natural Intelligence (RANI)
Roberto I. R. L. Lima Filho, University of Sao Paulo, School of Medicine


NEUROECONOMICS eJOURNAL

"Preference Cloud Theory: Imprecise Preferences and Preference Reversals" Free Download

OBEN K. BAYRAK, University of Umea - Centre for Environmental and Resource Economics
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JOHN D. HEY, University of York (UK), University of Bari - Faculty of Economics
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This paper presents a new theory, called Preference Cloud Theory, of decision-making under uncertainty. This new theory provides an explanation for empirically-observed Preference reversals. Central to the theory is the incorporation of preference imprecision which arises because of individuals’ vague understanding of numerical probabilities. We combine this concept with the use of the Alpha model (which builds on Hurwicz’s criterion) and construct a simple model which helps us to understand various anomalies discovered in the experimental economics literature that standard models cannot explain.

"EEG Activity Associated to Investment Decisions: Gender Differences" Free Download
Journal of Behavioral and Brain Science, 2015, 5, 203-211

ARMANDO FREITAS DA ROCHA, Research on Artificial and Natural Intelligence (RANI)
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JOÃO PAULO VIEITO, Scholl of Business Studies - Polytechnic Instituto of Viana do Castelo
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EDUARDO MASSAD, University of Sao Paulo (USP)
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F?BIO T. ROCHA, Research on Artificial and Natural Intelligence (RANI)
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ROBERTO I. R. L. LIMA FILHO, University of Sao Paulo, School of Medicine
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Literature in finance and neurosciences shows that male and female differ on many relevant issues concerning financial decision investment. Here, we studied the EEG activity recorded while volunteers were playing a stock trading game to investigate these gender differences. 20 males and 20 females made 100 trading decisions using a portfolio of 200 shares of 7 different companies. Males and females were equally successful in earning above the market. sLORETA was used to identify sources of EEG recorded 2 seconds before trading decision. Results showed that male and female use different sets of neuron to make equally successful financial decisions.

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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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Neuroeconomics eJournal

ANDREW W. LO
Harris & Harris Group Professor, Massachusetts Institute of Technology (MIT) - Sloan School of Management, National Bureau of Economic Research (NBER)

P. READ MONTAGUE
Professor, Baylor University - Department of Neuroscience

VERNON L. SMITH
Professor of Economics and Law, Chapman University - Economic Science Institute, Chapman University School of Law