1 Benefits of Neuroeconomic Modeling: New Policy Interventions and Predictors of Preference

European Research Council. Neuroeconomics aims at providing a detailed computational and neurobiological account of the decision-making process that will serve as a foundation for a better understanding of human behavior and well-being (Fehr and Rangel 2011). This means that data such as neural activity, response times (RT), and eye movements play an important role in this research program. However, much opposition to neuroeconomics has centered on the idea that standard economic theory makes no predictions about non-choice data. This stems from a long-held reluctance among economists to model the process of decision-making and to instead focus only on its outcome, namely the resulting choice. To address this, recent neuroeconomic models have sought to demonstrate the usefulness of jointly relating choice frequencies and process measures to underlying latent valuations. Here we show, in particular, that (i) neuroeconomic drift-diffusion models (DDMs) yield new – empirically validated – insights into the potential suboptimalities of individual decision-making that can be mitigated with novel policy interventions, and (ii) that the time it takes to make decisions provides an informative signal about people’s preferences. Thus, additional measures related to the choice process can b