In economics and in the social sciences, the study of decision making of the single individual is an important preliminary step to provide a sound foundation for the analysis of equilibria in economic and social systems. Neuroeconomic analysis of the process has been a recent fruitful development in this direction. In the more recent past a new direction of research has emerged, studying the interplay of the decision making of the single individual with the economic and social environment that surrounds him. We review some of the results in this field, both theoretical and experimental, and suggest that a closer development of these two methods of research will be necessary in the future.
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Acknowledgments I thank my co-authors in several projects: Stephen Burks, Jeff Carpenter, John Coates, Lorenz Götte, Mark Gurnell. I also thank Larry Blume and David Easley for several interesting discussions on the topic. This research was financed in part by the NSF grant SES-0452477.
- Decision theory
- Efficient market hypothesis
- Market selection hypothesis