TOWARD AN UNDERSTANDING OF OUR ORGANIC RELATIONSHIP WITH OTHERS

Mauricio Asp-Snchez

ABSTRACT
The goal of the present work is to sketch a critical view of the classical role of economics in the study
of human economics decision making. This critical view is twofold: first, where classical economics
question the epistemological status of neurobiology of decision making, it states that neurobiology of
decision making does not require the methodological approval of classical economics to advance in a
deeper understanding of human economics decision making. Second, it opposed, to methodological
individualism, a view in which we have an organic connection with others. With this, I hope to
contribute to a better understanding of human economics behavior.
 That presupposed we have an individual nervous system.
One of the Mantle twins (Dead Ringers, David Cronenberg).

1. Instrumentalism versus realism (a.k.a. Friedmans geocentricism)

Classical decision-making perspective, which emerged from the Neoclassical economics theory, during
the 19th century (Weintraub, 2007), considers people as rational agents whose decisions are made after
a selfish evaluation of costs and benefits (Heilbroner, 1969). Specifically, NET models human
economics behavior according to three assumptions, which can be considered its axioms: (i) People
have rational preferences among outcomes, that can be identified and associated with a value, (ii)
Individuals maximize utility, and (iii) People act independently on the basis of full and relevant
information (Weintraub, 2007; Stiglitz, 1993; Dowd, 1977, pp. 84). In this way, according to Fehr and
Schmidt (2001), most economics models are based on the self-interest hypothesis that assumes that all
people are exclusively motivated by their material self interest (italics are mine).

Experiments based upon bounded-rationality models during the 70s (Kahneman and Tversky, 1979;
Tversky and Kahneman, 1974; Kahneman, 2003), and behavioral game-theoretical experiments,
developed later and used in behavioral economics (Berg et al., 1995; Forsythe et al., 1994) and
neurosciences (Fehr and Camerer, 2007) have shown how humans usually deviate from rational choice
and, in addition, that the economic behavior of individuals is not consistent with the self-interest
prediction (Forsythe et al., 1994; Berg et al., 1995; Andreoni and Miller, 2003; Baumgartner et al 2008;
Cesarini et al.,2008; Chang et al., 2011; Cox, 2004; Fehr, 2009; Fehr and Camerer, 2007; Hewig et al.,
2011; Israel et al., 2009; Johnson and Mislin, 2011; King-Casas et al., 2005; Knafo et al., 2008;
Kosfeld et al., 2005; Krueger et al., 2008; Krueger et al., 2007; van den Bos et al., 2009; Wu et al.,
2011; Zak et al., 2007).

However the self-interest assumptions prediction have systematically failed to explain human behavior
(and most behavioral economists acknowledge it), NET assumptions remain used, from academic
modelling of human decision making to the common man conception of human nature. In the scholar
world, this is mainly because intrumentalism. Instrumentalism could be represented, as stated by Karl
Popper, "by omitting [...] the universe of the realities behind the various appearances. Its most famous
advocate, in the field of economics, is Milton Friedman. He stated that the relevant question to ask
about the assumptions of a theory is not whether they are descriptively realistic, for they never are,
but whether they are sufficiently good approximations for the purpose in hand. And this question can
be answered only seeing whether the theory works, which means whether it yields sufficiently accurate
predictions. But it is noteworthy to take a look on the epistemological danger of an instrumentalistic
approach. For instance, as noted by Kuhn (1070, pp 68):

Ptolemaic system [..] was admirably successful in predicting the changing positions of both stars and
planets. No other ancient system had performed so well; for the stars, Ptolemaic astronomy is still
widely used today as an engineering approximation; for the planets, Ptolemys predictions were as
good as Copernicus. But to be admirably successful is never, for a scientific theory, to be completely
successful. With respect both to planetary position and to precession of the equinoxes, predictions
made with Ptolemys system never quite conformed with the best available observations. [...] Given a
particular discrepancy, astronomers were invariably able to eliminate it by making some particular
adjustment in Ptolemys system of compounded circles. But as time went on, a man looking at the net
result of the normal research effort of many astronomers could observe that astronomys complexity
was increasing far more rapidly than its accuracy and that a discrepancy corrected in one place was
likely to show up in another.

Ptolemaics predictions were pretty accurate, but earth is not the center of the Solar System. Despite the
accurate predictions that from one particular model could arise, their assumptions must be close to
reality. A change to a new paradigm involves, precisely, a (radical) change in the obsolete paradigm
assumptions. Aristotelian physics assumed that gravity pull stronger heavier objects.

2. The absurd case of mindless neuroscience

Neuroeconomics is a bit ugly word that refers to the study of the neurobiology of (mainly) human
decision making (NDM), taking an approach that includes (behavioral and experimental) economics,
psychology and neuroscience. Its emergence in the late 20st century generate some incipient
knowledge of the brain (and later network) structures that activate when humans engage in several
decision making task closely linked with that what had been classically the domain of a blackboard
discipline: the rational choice approach to DM. But both behavioral and experimental economics, and
neuroeconomics, emergence did not like to all the neoclassical-economics scholars. Some of them
asked what is the brain in for economists (Bernhein, 2009). Another just said that economics does not
care about the black box: an equally predictive, more parsimonious approach can be achieve without
looking if some brain area turns on or not (Gul and Pesendorfer, 2005). This could be a really
interesting, constructive, or polemical discussion for economists: for a neurobiologist perspective, a
non sense. The greatly fruitful field of neurobiollogy of decision making, by its own definition, focuses
on the organ where a great part of individuals behavior is produced: the brain 1. By its own definition,
NDM study the organic, material, complex electrophysiological carbonic ecosystem from which
emerges human (economics) behavior. If that is an interesting thing for economists, is economists
matter.

3. NDM contributions to the understanding of human economics behavior

NDM has made interesting advances in the study of both human (economics) behavior and the neural
mechanism that underlies and, sometimes, determines and causes it. I would like to propose a clumsy
taxonomy of three levels of data where NDM has shed light:

At level 0, NDM have determined which brain structures activate when human engage in some specific
economic interaction. For instance, altruistic behavior2 (a behavior poorly predicted by economics
models where subjects utility function depends exclusively on their own material payoff) have been
shown to be associated with activation of ventromedial prefrontal cortex (vmPFC) and temporoparietal
junction (TPJ).

At level 1, NDM highlight brain functioning that can give new insight on the processes underlying
economics decision making. Taking altruism again, revealed-preferences methods present some
difficult when trying to understand the motives underlying an altruistic act. In this line, Hein et al.
(2016) studied the role of empathy and reciprocity motives in human altruism. Using a Dictator game3
(DG), they investigated differences in altruistic behavior from experimental subjects when they
observed recipients (i) receiving painful shocks (empathy parter) or (ii) giving an amount of money to

1 I do not want to hold some kind of biological (neither methodological not ontological) reductionism: culture, for
instance, influence behavior: but first it pass trough individuals brains! I also do not want to exclude the influence of others
individuals organics devices in the emergence of behavior: worms do not have brain. All organs of our body have
physiological activity.

2 Altruism is defined as an act that is costly to perform but confers a benefit on another individual (Wilson, 1975;
Trivers, 1985; Hamilton, 1996). In evolutionary biology, costs and benefits are measured in darwinian fitness, which means
reproductive success. In other contexts (and particularly in behavioral game theory), is more appropriate the use of other
utility scales, such as monetary rewards (Nowak and Sigmund, 2005).

3 The DG is the typical behavioral economics experimental design to measurement of altruism. In the DG, there
also are two players involved, in an anonymous one-shot interaction. The first player, called dictator, receives an amount
T of money, and donates a desired part of it (A1 [0, T]) to the second player, the recipient. This decision ends the game
and the recipient has no participation in deciding about this distribution (a reason to call dictator to the dictator).
Crucially, the recipient has no chances of punishing the dictator if the amount was not acceptable to him. Thus, there are not
direct incentives for a strictly self-interested dictator to share any portion of the received money, and any donation is
defined as an altruistic act (Lee, 2008; Rilling and Sanfey, 2011).
save some of those empathy partners from painful shocks (reciprocity partner), an action perceived as
kind and, thus, should elicit reciprocity motives. A baseline parter neither received painful shock nor
was instructed to give money for saving subjects from shock. They found that subjects behave more
altruistically toward the empathy and the reciprocity partners, and that a network consisting of AI, VS
and ACC predict if subjects behave altruistically because of empathy or reciprocity induction: a
positive connectivity between ACC and AI, and a slightly negative connectivity between AI and VS
predicts emphaty-driven altruism, while a strong bidirectional projection between AI and ACC and a
positive connectivity between AI and VS predict reciprocity-driven altruism. This enable us to unravel
specific motives underlying altruism, motives ussually hidden to revealed-preferences approaches.

At level 2, NDM has been increasingly shown to be able to contrast human DM models explaining
observed behaviors unpredicted by the classical economics approaches. A good example is how the
addition of new, previously irrelevant alternatives influences subjects behavior. Contrasting logit or
probit models, the classical approach in microeconomics, with a model where neurons noisy firing rates
accumulate subjective valuation of different alternatives, NDM models have make more accurate
predictions and explain how irrelevant alternatives modify subjects revealed preferences.

4. Interacting brains
Our brain has evolved to solve the complex cognitive demands required by living in social groups of
increasing size (Dunbar and Shultz, 2007). This have implied to develop specific brain mechanism that
allows us to display a large amount of cooperative behaviors, including altruism, trust4 and reciprocity5
(see, for instance, Baumgartner et al 2008; Cesarini et al.,2008; Chang et al., 2011; Israel et al., 2009;
King-Casas et al., 2005; Knafo et al., 2008; Kosfeld et al., 2005; Krueger et al., 2008; Krueger et al.,
2007; van den Bos et al., 2009; Wu et al., 2011; Zak et al., 2007.). These behaviors are displayed even
when individuals interact with genetically unrelated people (Nowak and Sigmund, 2005), strangers
(Fehr and Firschbacher, 2003; Camerer 2003) and with individuals they will never meet again (thus,
when incentives for reputation building or monetary gains are absent; Krueger et al, 2007, Camerer
2003).

4 Trust (a subset of risk; Coleman, 1990) is defined as an action that put a trustor in a disadvantage situation, but
creates the possibility of mutual benefit if the other person, the trustee, is cooperative (Cox, 2001). Thus, placement of trust
involves a time lag, and allows the trustee to take an action that would have not been possible otherwise (Coleman, 1990).

5 Reciprocity is defined as the tendency to return helpful and harmful acts in kind (Nowak and Sigmund, 2005);
thus, it can be positive (for instance, returning a favor) or negative (for instance, returning an aggression if being agressed).
 Examples of such behaviors, and the brain structures involved in them, can be exemplified by
experimental settings such as the Investment (or Trust) game (IG/TG)6. In this game, the first decision
for the trustor implies to trust or not to trust the other player. For the trustors' perspective, this involves
(i) knowing if they are playing with another human versus a non-intentional entity (generally a
computer -COM- that make random allocations), and (ii) deciding to send or not some amount of
money to the trustee (or COM). Several work have shown increased anteromedial prefrontal cortex
(amPFC) activity when trustors decide to trust another human partner, versus when they decide both
not to trust or send an allocation to COM (McCabe, 2001; Rilling, 2004; Delgado, 2005; King-Casas,
2005; Krueger, 2007, Baungartner, 2008). amPFC is involved in Theory of Mind (ToM)7 processes
(Amodio and Frith, 2006; van den Bos et al., 2009). This implies that subjects trust is not only a risky
move, but incorporate information of other peoples cooperative signals into their subjective valuation.

Regarding trustees8, reports show that the ToM system activates when they receive an allocation
from trustors. For instance, when trustees reciprocate a high-risk allocation (i.e., the trustor could lose a
large amount of money in case the trustee chose to defect), there is greater activation of the TPJ,
structure involved in the focus on the other aspects of the ToM system (Mitchell, 2008; van den Bos
et al., 2009). Furthermore, trustees reciprocating low benefit allocations (i.e., when the monetary
incentives to reciprocate were low) was associated with increases activity in the ACC and the rostral
dlPFC, structures involved in cognitive control (Shenhav et al., 2013; Ebitz et al., 2016) and the
inhibition of selfish impulses (van den Bos, 2009). In addition, trustees' reciprocal behavior is
influenced, in one-shot interactions, by expectations about how much other subjects expect (Chang et

6 The IG is an experimental setting designed for studying trust and reciprocity. In this game two players, who do
not know each other, engage in a (usually) anonymous, one-shot (i.e., the same partners play once) interaction. The
experimenter gives the investor (or trustor) some amount of (virtual) money. Let's call T to this total amount available for
the trustor. Then, the investor anonymously decides how much of T to send (or invest) in the other player, referred as the
trustee. The amount sent by the trustor (let's call it A1) is multiplied by an exchange factor r (usually between 2 and 4,
almost always equal to 3). So, the trustee receives an amount of money equal to the amount sent by the trustor, multiplied
by the exchange factor (rA1 ). The trustee finally has to decide whether to send back an amount A2 of the received money to
the trustor, from 0 to the total amount available to her (rA1; Berg et al., 1995). The players usually receive real money
according to the outcome of their interaction: for the trustor this amount is equal to T - A1 + A2 ; while for the trustee, is
equal to rA1 - A2 . The Trust game (TG) is a simplified version of the IG, where the players choose between discrete
amounts to invest or reciprocate (McCabe et al., 2001).

7 Theory of Mind (ToM), or mentalizing, is our ability to represent and attribute others' mental or internal states,
such as ideas, beliefs, desires, emotions and motivations (Frith & Frith, 1999; Abu-Akel and Shamay-Tsoory, 2011).

8 Trustee behavior, on the other hand, is interesting. While, for trustors, there is an expected gain, this is not so clear
for trustees. The trustee has the opportunity to break the trust, which is the classical GT and NET self-interest prediction.
This is particularly true for one-shot, anonymous interactions (given that there are no incentives to build reputation,
expecting a greater amount of trust in future interactions).
al., 2011; Tricomi et al., 2010). When trustees decrease their own income, sending an amount closer to
how much they think the trustor expect, they exhibited higher activation in dlPFC, AI and dACC,
structures reported to be activated by negative affective states, such as guilt (Shin et al., 2000) and
empathy for others pain (Singer et al., 2004). This shows that subjects utility function includes not just
a term valuating their own gain, but also others outcomes. Finally, in repeated interactions games,
when subjects engage in a trusty dynamics they reduce decision times and feel closer. In addition, we
can infer that a parameter for others gain valuation increase its value, because septal area structure
involved in the release of the OXT and AVP, increased its activation when participants decided to trust
(Krueger et al., 2007). These neuropeptides have a known role in the social attachment system (Asp-
Snchez et al., 2016).

The above mentioned examples illustrate how two brain interact. A cooperative dynamics in the
trust game involve amPFC activation in one brain that induces, by a trust signal, the TPJ and dACC
activation in another subjects brain. This induce, by a trustworthiness signal, an increased activation of
amPFC in the former brain, and the activation of social attachment neuropeptides on both brain. A new
trust signal increases activity in TPJ and dACC, and so on.

5. Concluding remarks
The marginal revolution took the concept of value and putted it inside individuals. They are rationals
and behave in the maximizing border where marginal cost (to the individual) equals marginal benefits
(again, to the individual). Pretty logical. It makes some evolutionary sense (thinking of our
evolutionary design as the best choice in the space of designs). Behavioral economics have show that
individuals are, in fact, sometimes intransitive and systematically influenced by framing and irrelevant
alternatives (what make more sense if we think of our evolutionary design as just one choice in the
space of plausible - not always the best - designs). In addition, noisy neural models account for these
odd behaviors. But, also, NDM has shown that we have neural devices designed specifically to value
others outcomes, from predictions errors (Apps et al., 2014; 2016) to others pain (Singer et al., 2004).
This enables us to continuously integrate, not only for the sake of a greater self-payoff, others
valuations in our decision making processes. Maybe, a paradigm shift will arise when we build a theory
of human economics decision making on the assumption that we are not mere individuals, but our
nervous systems are organically embedded with each other.