Dopamine and Reward Prediction Error: An Axiomatic Approach to Neuroeconomics

41 Pages Posted: 29 Apr 2007

See all articles by Andrew Caplin

Andrew Caplin

New York University (NYU) - Department of Economics; National Bureau of Economic Research (NBER)

Mark Dean

Brown University - Department of Economics; New York University (NYU) - Department of Economics

Date Written: February 2007

Abstract

Reinforcement learning theory has produced important insights into economic behavior. Intriguingly, neuroscientists recently discovered a plausible mechanism through which reinforcement may be encoded in the brain. Yet their resulting "dopaminergic reward prediction error" hypothesis has not yet been incorporated into economics. We develop an axiomatic model that characterizes the empirical implications of this theory for an idealized data set comprising both neuroscientific measurements and choices. Our axiomatization removes the language barrier between economics and neuroscience. This will allow "neuroeconomic" experimental protocols to be developed appropriate to the questions motivating economic, as opposed to purely neuroscientific, interest in learning.

Keywords: neuroeconomics, decision theory, learning

JEL Classification: D11

Suggested Citation

Caplin, Andrew and Dean, Mark R. W., Dopamine and Reward Prediction Error: An Axiomatic Approach to Neuroeconomics (February 2007). Available at SSRN: https://ssrn.com/abstract=983120 or http://dx.doi.org/10.2139/ssrn.983120

Andrew Caplin (Contact Author)

New York University (NYU) - Department of Economics ( email )

269 Mercer Street
New York, NY 10003
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212-998-8950 (Phone)
212-995-3932 (Fax)

HOME PAGE: http://www.econ.nyu.edu/user/caplina/

National Bureau of Economic Research (NBER)

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Mark R. W. Dean

Brown University - Department of Economics ( email )

64 Waterman Street
Providence, RI 02912
United States

HOME PAGE: http://www.econ.brown.edu/fac/Mark_Dean/

New York University (NYU) - Department of Economics ( email )

269 Mercer Street, 7th Floor
New York, NY 10011
United States

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