Biological Bases of Economic Behavior

Economist Sacha Bourgeois-Gironde on human’s economic behavior, animal’s behavior research, and human adaptability to their environment.

videos | October 12, 2016

How do animals partake in economic behaviors? In what way does understanding an animal’s behavior improve the understanding of human economic behavior? What is the connection between a decision and the environment of the decision-making? These and other questions are answered by Professor of Economics and Cognitive Science Sacha Bourgeois-Gironde.

In economics or at least in neuroeconomics we use animals in order to understand human economic behavior. What does that mean? It means that those animals obviously they try to maximize something. They try to survive in their environments, they try to optimize their fitness for instance. So, we have a set of evolutionary considerations about those animals and the classical standards very standard economic model, microeconomic models we can use capture very well those behaviors. In fact, to some extent those models capture even more animal behavior, basic individual animal behavior then human behavior.

Economist Sacha Bourgeois-Gironde on decision making in economics, 'Allais paradox' and perception of reward

In the past 20 or 30 years or even more then that a lot of behavioral economists have noticed that we don’t optimize all the time. And some of them have referred this non-optimal behavior a biological fabric. The way that our brain is wired to certain environments but not to other environments. So, in some environments we are not optimizer’s but in other environments we optimize. So there is something like a fitness between a brain or in more general terms our cognitive systems which is biologically realized in certain types of environments. So the degree of fitness between the two is what defines the optimality of economic behavior. It is not only the cognitive system itself, not only the social structure itself that are optimal. It is the fit between the two that defines optimal or non-optimal economic behavior.

Neuroscientist Jan Engelmann on the biology of decision-making, parts of the brain responsible for trust, and whether losses matter more than gains

Maybe we have developed an environment too complex for our brains to continue to adapt to this very environment we have built. And, maybe this idea of a bias of non-optimality can be referred to this functional lag between the environment we ourselves have built and our abilities as they come as they are rooting in evolution. So, if we come back to bees and ants I don’t see any kind of functional lag between those cognitive systems, those bioregical systems which are ants or bees or other animals and colonies or the beehives or the particular environment in which those animals evolve or move every day they live in. There is like a fundamental adequacy, adaptivity. But, by contrast, us humans we have built maybe some environments in which we are not so much adapted today.

Professor of economics and cognitive science; University Paris 2 - Lemma, Institut Jean-Nicod
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