Event Details

Over the course of the last decade the basic outlines of the neurobiological mechanisms for decision making have become clear. Applying notions of efficient coding developed by vision scientists to these brain areas has begun to yield physiological, psychological and economic insights into human and animal choice behavior. It now seems clear that the subjective values of choice options encoded in the primate brain employ an efficient coding strategy known as "divisive normalization". This coding strategy predicts a number of previously undescribed choice anomalies and accounts for many of the phenomena identified by behavioral economists. It also allows for new classes of normative economic models that outperform expected utility-based models and which have dynamical instantiations which offer new domains of inquiry for economics.