Does neuroeconomics study the brain or study economics?

Question

I'm trying to understand what neuroeconomics is. There are two possibilities for what it might mean. (1) The study of cognitive processes in the brain by applying basic principles of economic theory like concepts of utility, decision making, etc. (2) The study of how a human behaves in an economic setting, somewhat like game theory and so on, which is more economics than brain science.

Which one is it?

Answer 1

As @Kyle beautifully summed-up,

Neuroeconomics is the study of the neural basis of economic behavior.

The terms applies to studies concerning the appeal of new logos for marketing purposes to the understanding of the neural correlate of subjective value. The term neuroeconomics has been subject to some debate which made it sometimes unclear. In particular, the term is ambiguous with regards to its applications.

Are the theories that are built upon these studies used for marketing purposes (some would say "to optimize brain washing you in the necessity of buying a 7 blade razor") or for the sake of knowing how the brain may be better understood and to the therapeutical applications of these new theories.

My answer would therefore be this:

• the brain is a complex system for which science often used analogies to make progress. It has been compared as steam machines in the 1800s, electricity in the 1900s, or to computers in the this century.
• The complex interactions present in an economic system -as studied by game theory for instance- present a powerful analogy to understand the brain.
• Of course, it thus impacts our knowledge on economics as these are often based on our knowledge of decision making. Thus, your two options are (1) and (2) are interconnected.

Answer 2

My initial reaction is that (1) is preposterous, because there is no economics of the brain, as it is not made up of rational actors who trade or manage resources as individuals. Therefore it must be (2).

Also, I happen to know from experience that there is much said and written about (2) and less about (1).

Here is some evidence supporting this:

• Duke University's Center for Neuroeconomic Studies states that they apply "the techniques of cognitive and systems neuroscience – along with computational modeling – to understand economic decision making and related behavior".
• The IISDM at NYU (who have a program in neuroeconomics) says their goal is to "better understand the mechanisms, predict the impacts, and shape the policies that will define the study of decision-making tomorrow (...) by developing novel research infrastructures to support the propagation of neurobiological insights about the human animal into the policy domain"..
• The Society for Neuroeconomics says their mission is to "foster research on the foundations of economic behavior by promoting collaboration and discussion among scholars from the psychological, economic, and neural sciences".
• The most highly cited result on Google Scholar for "neuroeconomics" is titled "Neuroeconomics: How Neuroscience Can Inform Economics". The third hit's abstract says "Economics, psychology, and neuroscience are [aiming to provide] a single, general theory of human behavior. This is the emerging field of neuroeconomics (...) The goal of this discipline is thus to understand the processes that connect sensation and action by revealing the neurobiological mechanisms by which decisions are made."

So I would conclude from this that neuroeconomics is the study of human decision making, by application of neuroscience.

Granted, at this point I feel compelled to admit that perhaps I was too quick in my initial reaction: Is it really possible to isolate the study of the human brain from the study of human decision making? There is just so much overlap that even a "pure" neuroscientist will inevitably generate research which bears much relevance to economics. And with economics, the only way to "escape" neuroscience is to assume that all actors are perfectly rational, which is almost certainly at least a little bit untrue (although a staple of classical economics). It's probably a bit of loop, and I'd favor NYU's emphasis on it being interdisciplinary field rather than "field X applied to field Y". That said, indeed, most neuroeconomics studies appear to be interested in solving economics problems, and not neuroscience problems.