Economic Behaviour
Although Plato compared the human soul to a chariot drawn by the two horses of reason and emotion, modern economics has mostly been a one-horse show: humans have been assumed to be coolly rational calculators of their own self-interest. Over the past few years, evidence from psychology has persuaded many economists that reason does not always have its way. A burgeoning new field dubbed “neuroeconomics” seems poised to provide fresh insights on how Plato’s two horses together produce economic behaviour.
Identifying the parts of the brain that control economic actions is one thing. Harder tasks include determining how neural systems work together to create behaviour and how wide is the variation in brain patterns between different people. Then there are age-old questions of free will: is your failure to save for old age simply a lifestyle choice, or is it down to faulty brain circuits? Neuroeconomics is already providing fascinating conclusions. But Plato’s chariot will remain an alluring explanation for a while yet.