Introduction: A brief history of neuroeconomics

This chapter explores historical facts associated with neuroeconomics. The birth of Economics is often traced back to Adam Smith's publication The Wealth of Nations in 1776. With this publication began the classical period of economic theory. Smith described a number of phenomena critical for understanding choice behavior and the aggregation of choices into market activity. These were, in essence, psychological insights. They were relatively ad hoc rules that explained how features of the environment influenced the behavior of a nation of consumers and producers. Despite these impressive accomplishments, "neuroeconomics" is at best a decade old and has yet to demonstrate a critical role in neuroscience, psychology, or economics. Indeed, scholars within neuroeconomics are still debating whether neuroscientific data will provide theory for economists or whether economic theory will provide structure for neuroscience. We hope that both the goals will be accomplished, but the exact form of this contribution is not yet clear. However, there are also skeptical voices. For example, Pareto and Friedman came up with the arguments that economics is only about choices that still lives in the form of fundamentalist critique, whereas Gul and Pesendorfer argued further that neuroscientific data and neuroscientific theories should, in principle, be unwelcome in economics.