Research Presentation Essay

Materialism – Jhingur judges himself by the value of his property as if this defines his character Quote: â€Å"Whenever Jhingur looked at his cane field a sort of intoxication came over him. He had bighas of land which would earn him an easy 600 rupees. And if God sawto it that therates went up then who could complain? Why should he worry about money? The merchants were already beginning to fawn on him. † From the beginning we seem to focus on the character of Jhingur that seems to value wealth over what may be for himself and his community. Instead of focusing on how his work can positively affect his life, he focuses on the negative. His focus is on his need to make money from his fellow farmers as possible, believing himself to be the better person. Social Issues Explotation Both men are propelled into acts of vengeance that it ultimately destroyed both of their fortunes. This derived from a primitive need for the characters to compete against each other. The material desires at the end have blinded them, and they may never see the true value of life. They brought about their own destruction. The core of this story lies a lesson on how materialism can impair our ability to see what is best for our life. In the period during which India evolved from colonial domination to independence, Tagore and Premchand were pioneers in Modern Indian literature. Their literary works pioneered social issues and the social structure of India that concentrated on the oppressed, human emotions, destruction, oppression of women and life. These authors proved that they can focus on the psychology of the characters instead of social realism. We will explore the context of the stories through the characters journey’s and struggles and unfortunate consequences in the end. â€Å"Punishment† portrayal of the complex relationships among the members of the Rui family and how tragedy can delve into real issues that we have hidden. â€Å"The day on which our story begins was like this†¦.. That day, Dukhiram and Chidam had been working near the zamindar’s office. On a sandbank opposite, paddy had ripened. The paddy needed to be cut before the sanbank was washed away, but the village people were busy either in their own fields or in cutting jute: so a messenger came from the office and forcibly engaged the two brothers. As the office roof was leaking in places, they also had to mend that and make some new wicker wood panels: it had taken them all day. † (p. 893) Two peasant brothers and their wives share a house together. The short-tempered, sloppy wife, Radha, is killed by her husband, Dukhiram, in a fit of anger for failing to prepare the evening meal. The village chief intrudes on the scene immediately following the murder, and the other brother, Chidam, unintentionally identifies the beautiful wife, Chandara, as the killer. Chidam instructs Chandara to lie to protect her brother-in-law. Now, we start to see the divison in the male and female hierarchy. Before this revelation, despite their love for each other, Chandara and Chidam had trouble in the relationship. Chandara suspected her husband of infidelity, and began flirting at the watering hole. Chidam then threatened her stating, â€Å"I’ll break every bone in your body† (p. 896) and locked her in the house. She escaped to a relative’s house, but was persuaded to return only after Chidam â€Å"had to surrender to her. † (p. 896). When we examine this relationship, it great to point out that Tagore states, â€Å"It was as hard to restrain his wife as to hold a handful of mercury. † (p. 896) Chandara has achieved a sort of power by submission; we tend to question where the balance of power lies in this relationship. The chain of events after the murder further explores the complexity in the relationship of Chidam and Chandara. When discussing the murder they agree that Chidam will save Chandara from execution, if she agrees to his lie. Chidam expects Chandara to relate that her sister-in-law attacked her and that Radha was killed in self-defense. After being taken into custody by the police, Chandara defies her husband by telling the police that the attack was unprovoked and puts her own life at risk. She was so angry with him that she refuses to see him before her execution stating, â€Å"To hell with him. †(p. 899). She accepts the punishment for a crime she did not commit in order to punish Chidam. She will not give him the satisfaction of saving her. Chidam gets her to take the blame for the crime but loses in the end by not getting his wife back. The story is unique by telling a story about the complex nature of human behavior and the unjust social set up of how women had no social status and importance in a family. Evidence of how the oppression of women is shown when Chidam states, â€Å"a wife can be replaced but a brother cannot be replaced,† (p. 894) clearly points out women are not valued. Tagore touches on women being oppressed and how social injustice was a common thing issue for women in rural Bangladesh during that time.

Essay Topics for Mba Students

this is an Economics Case Study. Assignment Overview: This assignment is based on an article published in The Scandinavian Journal of Economics called ‘Neuroeconomics: Why Economics Needs Brains’, in 2004, Vol. 106, Issue 3, page 555-79. The article is already attached to this assignment question. Please read the article carefully before attempting this exercise. You will also need to draw on other resources available through the library as well as external resources. Please note that you need to provide clear references for your sources when citing research and data.Learning Objectives: This assignment is designed to encourage you to think about the application of concepts learned in this unit in a real world scenario. This assignment, indeed, is challenging as it raises a question to some of the fundamental assumptions behind the existing economic theories, for example, how rational (from your ? rst lecture) an economic agent is ! Economists are asking this question fo r a while and try to open up the ‘black-box’ by examining the brain mechanism to inform economic theory. 1 As a result the new discipline has emerged called Neuroeconomics.We hope that this assignment will expand the horizon of your thoughts in identifying the limitation of existing economic theories. Assessment: Your score on this assignment contributes towards 30% of your ? nal score for this unit. Although you can work in group, this is not a group assignment and you must submit answers individually. Please check the Academic Honesty and Misconduct section in the Unit Guide. You will be graded on your use of appropriate economic theory and concepts, the clarity of exposition and overall quality of your answers.Questions: Answer all questions. Limit the word count of your assignment to less than 3000. Please use diagrams in your answer when appropriate. 1. What is Neuroeconomics? Provide two examples that standard economics failed to explain but the Neuroeconomics can (examples have to be di? erent from those examples provided in our article). [6 marks] 2. Explain how di? erent lobes of a human brain are interconnected in response to your examples that you suggest for question 1. Which feature(s) of human brain function does work well in these examples? [6 marks] 3.What are the key assumptions of Neuroeconomics? How do they di? er as compared to standard economics? [6 marks] 4. Is it possible to explain Global Financial Crisis (GFC) with the help of Neuroeconomics? Explain. [6 marks] 5. Suppose, you are holding a senior marketing executive position in your company. Is it possible to use the knowledge of Neuroeconomics to promote the sales of your company? Explain. [6 marks] 2 Scand. J. of Economics 106(3), 555–579, 2004 DOI: 10. 1111/j. 1467-9442. 2004. 00378. x Neuroeconomics: Why Economics Needs Brains* Colin F. CamererCalifornia Institute of Technology, Pasadena, CA 91125, USA [email  protected] caltech. edu George Loewenstein Carneg ie-Mellon University, Pittsburgh, PA 15213, USA [email  protected] cmu. edu Drazen Prelec MIT, Cambridge, MA 02139, USA [email  protected] edu Abstract Neuroeconomics uses knowledge about brain mechanisms to inform economic theory. It opens up the ‘‘black box’’ of the brain, much as organizational economics opened up the theory of the firm. Neuroscientists use many tools—including brain imaging, behavior of patients with brain damage, animal behavior and recording single neuron activity.The key insight for economics is that the brain is composed of multiple systems which interact. Controlled systems (‘‘executive function’’) interrupt automatic ones. Brain evidence complicates standard assumptions about basic preference, to include homeostasis and other kinds of state-dependence, and shows emotional activation in ambiguous choice and strategic interaction. Keywords: Behavioral economics; neuroscience; neuroeconomics; brai n imaging JEL classification: C91; D81 I. IntroductionIn a strict sense, all economic activity must involve the human brain. Yet, economics has achieved much success with a program that sidestepped the * We thank participants at the Russell Sage Foundation-sponsored conference on Neurobehavioral Economics (May 1997) at Carnegie-Mellon, the Princeton workshop on Neural Economics (December 2000) and the Arizona conference (March 2001). This research was supported by NSF grant SBR-9601236 and by the Center for Advanced Study in Behavioral Sciences, where the authors visited during 1997–1998.David Laibson’s presentation at the Princeton conference was particularly helpful, as were comments and suggestions from referees, John Dickhaut, Paul Zak, a paper by Jen Shang, and conversations with John Allman, Greg Berns, Jonathan Cohen, Angus Deaton, Dave Grether, Brian Knutson, David Laibson, Danica Mijovic-Prelec, Read Montague, Charlie Plott, Matthew Rabin, Peter Shizgal and St eve Quartz. # The editors of the Scandinavian Journal of Economics 2004. Published by Blackwell Publishing, 9600 Garsington Road, Oxford, OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA. 56 C. F. Camerer, G. Loewenstein and D. Prelec biological and cognitive sciences that focus on the brain, in favor of the maximization style of classical physics, with agents choosing consumption bundles having the highest utility subject to a budget constraint, and allocations determined by equilibrium constraints. Later tools extended the model to include utility tradeoffs with uncertainty and time, Bayesian processing of information, and rationality of expectations about the economy and about the actions of other players in a game.Of course these economic tools have proved useful. But it is important to remember that before the emergence of revealed preference, many economists had doubts about the rationality of choice. In 1925, Viner (pp. 373–374), lamented that ‘‘Human behavior, in general, and presumably, therefore, also in the market place, is not under the constant and detailed guidance of careful and accurate hedonic calculations, but is the product of an unstable and unrational complex of reflex actions, impulses, instincts, habits, customs, fashions and hysteria. ’ At the same time, economists feared that this ‘‘unstable and unrational complex’’ of influences could not be measured directly. Jevons (1871) wrote, ‘‘I hesitate to say that men will ever have the means of measuring directly the feelings of the human heart. It is from the quantitative effects of the feelings that we must estimate their comparative amounts. ’’ The practice of assuming that unobserved utilities are revealed by observed choices— revealed preference—arose as a last resort, from skepticism about the ability to ‘‘measure directly’’ feelings and thoughts. But Jevons was wr ong.Feelings and thoughts can be measured directly now, because of recent breakthroughs in neuroscience. If neural mechanisms do not always produce rational choice and judgment, the brain evidence has the potential to suggest better theory. The theory of the firm provides an optimistic analogy. Traditional models treated the firm as a black box which produces output based on inputs of capital and labor and a production function. This simplification is useful but modern views open the black box and study the contracting practices inside the firm—viz. , how capitalowners hire and control labor.Likewise, neuroeconomics could model the details of what goes on inside the consumer mind just as organizational economics models what goes on inside firms. This paper presents some of the basic ideas and methods in neuroscience, and speculates about areas of economics where brain research is likely to affect predictions; see also Zak (2004), and Camerer, Loewenstein and Prelec (2004) for more details. We postpone most discussion of why economists should care about neuroscience to the conclusion. # The editors of the Scandinavian Journal of Economics 2004. Neuroeconomics: why economics needs brains 557 II.Neuroscience Methods Many different methods are used in neuroscience. Since each method has strengths and weaknesses, research findings are usually embraced only after they are corroborated by more than one method. Like filling in a crossword puzzle, clues from one method help fill in what is learned from other methods. Much neural evidence comes from studies of the brains of non-human animals (typically rats and primates). The ‘‘animal model’’ is useful because the human brain is basically a mammalian brain covered by a folded cortex which is responsible for higher functions like language and long-term planning.Animal brains can also be deliberately damaged and stimulated, and their tissues studied. Many human physiological reactions can be easily measured and used to make inferences about neural functioning. For example, pupil dilation is correlated with mental effort; see Kahneman and Peavler (1969). Blood pressure, skin conductance (sweating) and heart rate are correlated with anxiety, sexual arousal, mental concentration and other motivational states; see Levenson (1988).Emotional states can be reliably measured by coding facial expressions and recording movements of facial muscles (positive emotions flex cheekbones and negative emotions lead to eyebrow furrowing); see Ekman (1992). Brain imaging: Brain imaging is the great leap forward in neuroscientific measurement. Most brain imaging involves a comparison of people performing different tasks—an ‘‘experimental’’ task E and a ‘‘control’’ task C. The difference between images taken during E and C shows what part of the brain is differentially activated by E.The oldest imaging method, electro-encephalogra m (or EEG) measures electrical activity on the outside of the brain using scale electrodes. EEG records timing of activity very precisely ($1 millisecond) but spatial resolution is poor and it does not directly record interior brain activity. Positron emission topography (PET) is a newer technique, which measures blood flow in the brain using positron emissions after a weakly radioactive blood injection. PET gives better spatial resolution than EEG, but poorer temporal resolution and is limited to short tasks (because the radioactivity decays rapidly).However, PET usually requires averaging over fewer trials than fMRI. The newest method is functional magnetic resonance imaging (fMRI). fMRI measures changes in blood oxygenation, which indicates brain activity because the brain effectively ‘‘overshoots’’ in providing oxygenated blood to active parts of the brain. Oxygenated blood has different magnetic properties from deoxygenated blood, which creates the sig nal picked up by fMRI. Unfortunately, the signal is weak, so drawing inferences requires repeated # The editors of the Scandinavian Journal of Economics 2004. 558 C. F. Camerer, G.Loewenstein and D. Prelec sampling and many trials. Spatial resolution in fMRI is better than PET ($3 millimeter3 ‘‘voxels’’). But technology is improving rapidly. Single-neuron measurement: Even fMRI only measures activity of ‘‘circuits’’ consisting of thousands of neurons. In single neuron measurement, tiny electrodes are inserted into the brain, each measuring a single neuron’s firing. Because the electrodes damage neurons, this method is only used on animals and special human populations (when neurosurgeons use implanted electrodes to locate the source of epileptic convulsions).Because of the focus on animals, single neuron measurement has so far shed far more light on basic emotional and motivational processes than on higher-level processes su ch as language and consciousness. Psychopathology: Chronic mental illnesses (e. g. , schizophrenia), developmental disorders (e. g. , autism), and degenerative diseases of the nervous system (e. g. , Parkinson’s Disease (PD)) help us understand how the brain works. Most forms of illness have been associated with specific brain areas. In some cases, the progression of illness has a localized path in the brain.For example, PD initially affects the basal ganglia, spreading only later to the cortex. The early symptoms of PD therefore provide clues about the specific role of basal ganglia in brain functioning; see Lieberman (2000). Brain damage in humans: Localized brain damage, produced by accidents and strokes, and patients who underwent radical neurosurgical procedures, are an especially rich source of insights; see e. g. Damasio (1994). If patients with known damage to area X perform a particular task more poorly than ‘‘normal’’ patients, the differen ce is a clue that area X is necessary to do that task.Often a single patient with a one-of-a-kind lesion changes the entire view in the field (much as a single crash day in the stock markets— October 19, 1987—changed academic views of financial market operations). For example, patient ‘‘S. M. ’’ has bilateral amygdala damage. She can recognize all facial expressions except fear; and she does not perceive faces as untrustworthy the way others do. This is powerful evidence that the human amygdala is crucial for judging who is afraid and who to distrust. ‘‘Virtual lesions’’ can also be created by ‘transcranial magnetic stimulation (TMS)’’, which creates temporary local disruption to brain regions using magnetic fields. III. Stylized Facts about the Brain We now review some basic facts about the brain, emphasizing those of special interest to economists. Figure 1 shows a ‘‘sagittal’à ¢â‚¬â„¢ slice of the human brain, with some areas that are mentioned below indicated. It has four lobes—from front to back (left to right, clockwise in Figure 1), frontal, parietal, occipital and temporal. The frontal lobe is thought to be the locus # The editors of the Scandinavian Journal of Economics 2004.Neuroeconomics: why economics needs brains ANTERIOR CINGULATE 559 PREFRONTAL CORTEX NUCLEUS ACCUMBENS PUTAMEN AMYGDALA HIPPOCAMPUS CAUDATE Fig. 1. Human brain (frontal pole left) regions of potential interest to economists of planning, cognitive control and integration of cross-brain input. Parietal areas govern motor action. The occipital lobe is where visual processing occurs. The temporal lobes are important for memory, recognition and emotion. Neurons from different areas are interconnected, which enables the brain to respond to complex stimuli in an integrated way.When an automated insurance broker calls and says, ‘‘Don’t you want earthquake insura nce? Press 1 for more information’’ the occipital lobe ‘‘pictures’’ your house collapsing; the temporal lobe feels a negative emotion; and the frontal lobe receives the emotional signal and weighs it against the likely cost of insurance. If the frontal lobe ‘‘decides’’ you should find out more, the parietal lobe directs your finger to press 1 on your phone. A crucial fact is that the human brain is basically a mammalian brain with a larger cortex.This means human behavior will generally be a compromise between highly evolved animal emotions and instincts, and more recently evolved human deliberation and foresight; see e. g. Loewenstein (1996). It also means we can learn a lot about humans from studying primates (who share more than 98% of our genes) and other animals. Three features of human brain function are notable: automaticity, modularity and sense-making. According to a prominent neuroscientist, Gazzaniga (1988) wrote: # The editors of the Scandinavian Journal of Economics 2004. 560 C. F. Camerer, G. Loewenstein and D. Prelec ‘Human brain architecture is organized in terms of functional modules capable of working both cooperatively and independently. These modules can carry out their functions in parallel and outside of conscious experience. The modules can effect internal and external behaviors, and do this at regular intervals. Monitoring all this is a left-brain-based system called the interpreter. The interpreter considers all the outputs of the functional modules as soon as they are made and immediately constructs a hypothesis as to why particular actions occurred. In fact the interpreter need not be privy to why a particular module responded.Nonetheless, it will take the behavior at face value and fit the event into the large ongoing mental schema (belief system) that it has already constructed. ’’ Many brain activities are automatic parallel, rapid processes whic h typically occur without awareness. Automaticity implies that ‘‘people’’— i. e. , the deliberative cortex and the language processing which articulates a person’s reasons for their own behavior—may genuinely not know the cause of their own behavior. 1 Automaticity means that overcoming some habits is only possible with cognitive effort, which is scarce.But the power of the brain to automatize also explains why tasks which are so challenging to brain and body resources that they seem impossibly difficult at first—windsurfing, driving a car, paying attention to four screens at once in a trading room—can be done automatically after enough practice. 2 At the same time, when good performance becomes automatic (in the form of ‘‘procedural knowledge’’) it is typically hard to articulate, which means human capital of this sort is difficult to reproduce by teaching others. The different brain modules are often neuroanatomically separated (like organs of the body).Some kinds of modularity are really remarkable: The ‘‘facial fusiform area’’ (FFA) is specialized for facial recognition; ‘‘somatosensory cortex’’ has areas corresponding directly to different parts of the body (body parts with more nerve endings, like the mouth, have more corresponding brain tissue); features of visual images are neurally encoded in different brain areas, reproducing the external visual 1 For example, 40-millisecond flashes of angry or happy faces, followed immediately by a neutral ‘‘mask’’ face, activate the amygdala even though people are completely unaware of whether they saw a happy or angry face; see Whalen, Rauch, Etcoff, McInerney, Lee and Jenike (1998). 2 Lo and Repin (2002) recorded psychophysiological measures (like skin conductance and heart rate) with actual foreign exchange traders during their work. They found that more experienced traders showed lower emotional responses to market events that set the hearts of less experienced traders pounding. Their discovery suggests that responding to market events becomes partially automated, which produces less biological reaction in experienced traders. # The editors of the Scandinavian Journal of Economics 2004. Neuroeconomics: why economics needs brains 561 rganization of the elements internally (‘‘retinotopic mapping’’); and there are separate language areas, Broca’s and Wernicke’s areas,3 for semantics and for comprehension and grammar. Many neuroscientists think there is a specialized ‘‘mentalizing’’ (or ‘‘theory of mind’’) module, which controls a person’s inferences about what other people believe, or feel, or might do; see e. g. Fletcher, Happe, Frith, Baker, Dolan, Frackowiak and Frith (1995). Such a module presumably supports a whole range of cri tical human functions—decoding emotions, understanding of social rules, emotions, language, strategic concepts (bluffing)—and has obvious importance for economic transactions.Modularity is important for neuroeconomics because it invites tests that map theoretical distinctions onto separate brain areas. For example, if people play games against other people differently than they make decisions (a ‘‘game against nature’’), as is presumed in economic theory, those two tasks should activate some different brain areas. However, the modularity hypothesis should not be taken too far. Most complex behaviors of interest to economics require collaboration among more specialized modules and functions. So the brain is like a large company—branch offices specialize in different functions, but also communicate to one another, and communicate more feverishly when an important decision is being made.Attention in neuroeconomics is therefore focused not just on specific regions, but also on finding ‘‘circuits’’ or collaborative systems of specialized regions which create choice and judgment. The brain’s powerful drive toward sense-making leads us to strive to interpret our own behavior. The human brain is like a monkey brain with a cortical ‘‘press secretary’’ who is glib at concocting explanations for behavior, and privileges deliberative explanations over cruder ones; cf. Nisbett and Wilson (1977) and Wegner and Wheatley (1999). An important feature of this sense-making is that it is highly dependent on expectations; in psychological terms, it is ‘‘top down’’ as opposed to ‘‘bottom-up’’.For example, when people are given incomplete pictures, their brains often automatically fill in the missing elements so that there is never any awareness that anything is missing. In other settings, the brain’s imposition of order can make it detect patterns where there are none; see Gilovich (1991). When subjects listen to music and watch flashing Christmas tree lights at the same time, they mistakenly report that the two are synchronized. Mistaken beliefs in sports streaks, as evidenced by Gilovich, Vallone and Tversky (1985), and seeing spurious patterns in time series like stock-price data (‘‘technical analysis’’) may come from ‘‘too much’’ sense-making.Patients with Wernicke damage can babble sentences of words which make no sense strung together. Broca patients’ sentences make sense but they often ‘‘can’t find just the right word’’. # The editors of the Scandinavian Journal of Economics 2004. 3 562 C. F. Camerer, G. Loewenstein and D. Prelec Top-down encoding also implies the brain misses images it does not expect to see. A dramatic example is ‘‘change-blindness’’. In an amusing study t itled ‘‘Gorillas in our Midst’’, subjects watch a video of six people passing a basketball and count the passes made by one ‘‘team’’ (indicated by jersey color). Forty seconds into the film clip, a gorilla walks into the center of the game, turns to the camera, thumps its chest, and then walks off.Although the gorilla cavorts onscreen for a full total of nine seconds, about one-half of the subjects remain oblivious to the intrusion, even when pointedly asked whether they had seen ‘‘the gorilla walking across the screen’’; see Simons and Chabris (1999). When the brain does assimilate information, it does so rapidly and efficiently, ‘‘overwriting’’ what was previously believed. This can create a powerful ‘‘hindsight bias’’ in which events seem, after the fact, to have been predictable even when they were not. Hindsight bias is probably important in agency r elations when an agent takes an informed action and a principal ‘‘second-guesses’’ the agent if the action turns out badly. This adds a special source of risk to the agent’s income and may lead to other behaviors like herding, diffusion of responsibility, inefficiencies from ‘‘covering your ass’’, excessive labor turnover, and so on.We emphasize these properties of the brain, which are rapid and often implicit (subconscious), because they depart the most from conscious deliberation that may take place in complex economic decisions like saving for retirement and computing asset values. Our emphasis does not deny the importance of deliberation. The presence of other mechanisms just means that the right models should include many components and how they interact. IV. Topics in Neuroeconomics Preferences Thinking about the brain suggests several shortcomings with the standard economic concept of preference. 1. Feelings of pleasu re and pain originate in homeostatic mechanisms that detect departures from a ‘‘set-point’’ or ideal level, and attempt to restore equilibrium. In some cases, these attempts do not require additional voluntary actions, e. g. when monitors for body temperature trigger sweating to cool you off and shivering to warm you up. In other cases, the homeostatic processes operate by changing momentary preferences, a process called ‘‘alliesthesia’’; see Cabanac (1979). When the core body temperature falls below the 98. 6F set-point, almost anything that raises body temperature (such as placing one’s hand in warm water) feels good, and the opposite is true when body temperature is too high. Similarly, monitors for blood sugar levels, intestinal distention and many other variables trigger hunger. # The editors of the Scandinavian Journal of Economics 2004. Neuroeconomics: why economics needs brains 563Homeostasis means preferences are â €˜â€˜state-dependent’’ in a special way: the states are internal to the body and both affect preferences and act as information signals which provoke equilibration. Some kinds of homeostatic state-dependence are ‘‘contagious’’ across people—for example, the menstrual cycles of females living together tend to converge over time. Perhaps ‘‘waves’’ of panic and euphoria in markets work in a similar way, correlating responses so that internal states become macroeconomic states (as in the ‘‘animal spirits’’, which, in Keynes’s view, were a cause of business cycles). 2. Inferring preferences from a choice does not tell us everything we need to know. Consider the hypothetical case of two people, Al and Naucia, who both refuse to buy peanuts at a reasonable price; cf. Romer (2000).The refusal to buy reveals a common disutility for peanuts. But Al turned down the peanuts because h e is allergic: consuming peanuts causes a prickly rash, shortens his breath, and could even be fatal. Naucia turned down the peanuts because she ate a huge bag of peanuts at a circus years ago, and subsequently got nauseous from eating too much candy at the same time. Since then, her gustatory system associates peanuts with illness and she refuses them at reasonable prices. While Al and Naucia both revealed an identical disutility, a neurally detailed account tells us more. Al has an inelastic demand for peanuts—you can’t pay him enough to eat them! while Naucia would try a fistful for the right price. Their tastes will also change over time differently: Al’s allergy will not be cured by repeated consumption, while Naucia’s distaste might be easily changed if she tried peanuts once and didn’t get sick. Another example suggests how concepts of preference can be even wider of the mark by neglecting the nature of biological state-dependence: Nobody ch ooses to fall asleep at the wheel while driving. Of course, an imaginative rational-choice economist—or a satirist—could posit a tradeoff between ‘‘sleep utility’’ and ‘‘risk of plowing into a tree utility’’ and infer that a dead sleeper must have had higher u(sleep) than u(plowing into a tree).But this ‘‘explanation’’ is just tautology. It is more useful to think of the ‘‘choice’’ as resulting from the interaction of multiple systems—an automatic biological system which homeostatically shuts down the body when it is tired, and a controlled cognitive system which fights off sleep when closing your eyes can be fatal, and sometimes loses the fight. For economists, it is natural to model these phenomena by assuming that momentary preferences depend on biological states. This raises a deep question of whether the cortex is aware about the nature of the processes a nd allocates cognitive effort (probably cingulate activity) to control them.For example, Loewenstein, O’Donoghue and Rabin (in press) suggest that people neglect mean-reversion in biological states, which explains stylized # The editors of the Scandinavian Journal of Economics 2004. 564 C. F. Camerer, G. Loewenstein and D. Prelec facts like suicide resulting from temporary depression, and shoppers buying more food when they are hungry. 4 3. A third problem with preferences is that there are different types of utilities which do not always coincide. Kahneman (1994) distinguishes four types: remembered utility, anticipated utility, choice utility and experienced utility. Remembered utility is what people recall liking; anticipated utility is what they expect to like; choice utility is what they reveal by choosing (classical revealed preference); and experienced utility is what they actually like when they consume.It is likely that the four types of utility are produced, to some extent, in separate brain regions. For example, Berridge and Robinson (1998) have found distinct brain regions for ‘‘wanting’’ and ‘‘liking’’, which correspond roughly to choice utility and experienced utility. The fact that these areas are dissociated allows a wedge between those two kinds of utility. Similarly, a wedge between remembered and experienced utility can be created by features of human memory which are adaptive for general purposes (but maladaptive for remembering precisely how something felt), such as repression of memories for severe pain in childbirth and other traumatic ordeals (e. g. , outdoor adventures led by author GL).If the different types of utility are produced by different regions, they will not always match up. Examples are easy to find. Infants reveal a choice utility by putting dirt in their mouths, but they don’t rationally anticipate liking it. Addicts often report drug craving (wanting) which leads to consumption (choosing) that they say is not particularly pleasurable (experiencing). Compulsive shoppers buy goods (revealing choice utility) which they never use (no experienced utility). When decisions are rare, like getting pregnant, deciding whether to go to college, signing up for pension contributions, buying a house, or declaring war, there is no reason to think the four types of utility will necessarily match up.This possibility is important because it means that the standard analysis of welfare, which assumes that choices anticipate experiences, is incomplete. In repeated situations with clear feedback, human learning may bring the four types of utilities together gradually. The rational choice model of consistent and coherent preferences can then be characterized as a limiting case of a neural model with multiple utility types, under certain learning conditions. 4. A fourth problem with preference is that people are assumed to value money for what it can purchase —that is, the utility of income is indirect, and Biological state-dependence also affects tipping.Most economic models suggest that the key variable affecting tipping behavior is how often a person returns to a restaurant. While this variable does influence tips slightly, a much stronger variable is how many alcoholic drinks the tipper had; see Conlin, Lynn and O’Donoghue (2003). # The editors of the Scandinavian Journal of Economics 2004. 4 Neuroeconomics: why economics needs brains 565 should be derived from direct utilities for goods that will be purchased with money. But roughly speaking, it appears that similar brain circuitry— dopaminergic neurons in the midbrain—is active for a wide variety of rewarding experiences—drugs, food, attractive faces, humor—and money rewards. This means money may be directly rewarding, and its loss painful.This might explain why workaholics and the very wealthy keep working long hours after they ‘â₠¬Ëœshould be’’ retired or cutting back (i. e. , when the marginal utility of goods purchased with their marginal income is very low). Similarly, the immediate ‘‘pain of paying’’ can make wealthy individuals reluctant to spend when they should, and predicts unconventional effects of pricing—e. g. a preference for fixed payment plans rather than marginal-use pricing; see Prelec and Loewenstein (1998). 5. A common principle in economic modeling is that the utility of income depends only on the value of the goods and services it can buy, and is independent of the source of income.But Loewenstein and Issacharoff (1994) found that selling prices for earned goods were larger when the allocated good was earned than when it was unearned. Zink, Pagnoni, Martin-Skurski, Chappelow and Berns (2004) also found that when subjects earned money (by responding correctly to a stimulus), rather than just receiving equivalent rewards with no effort, there w as greater activity in a midbrain reward region called the striatum. Earned money is literally more rewarding, in the brain, than unearned money. The fact that brain utility depends on the source of income is potentially important for welfare and tax policies. 6. Addiction is an important topic for economics because it seems to resist rational explanation.Becker and Murphy (1988) suggest that addiction and other changes in taste can be modeled by allowing current utility to depend on a stock of previous consumption. They add the assumption that consumers understand the habit formation, which implies that behavior responds to expected future prices. 5 While variants of this model are a useful workhorse, other approaches are possible. It is relevant to rational models of addiction that every substance to which humans may become biologically addicted is also potentially addictive for rats. Addictive substances appear therefore to be ‘‘hijacking’’ primitive rew ard circuitry in the ‘‘old’’ part of the human brain.Although this fact does not disprove the rational model (since 5 Evidence in favor of the rational-addiction view is that measured price elasticities for addictive goods like cigarettes are similar to those of other goods (roughly A0. 5 and A2), and there is some evidence that current consumption does respond to expected future prices; cf. Gruber and Koszegi (2001) and Hung (2001). However, data limitations make it difficult to rule out alternative explanations (e. g. , smokers may be substituting into higher-nicotine cigarettes when prices go up). # The editors of the Scandinavian Journal of Economics 2004. 566 C. F. Camerer, G. Loewenstein and D. Prelec ecently-evolved cortex may override rat-brain circuitry), it does show that rational intertemporal planning is not necessary to create the addictive phenomena of tolerance, craving and withdrawal. It also highlights the need for economic models of the pr imitive reward circuitry, which would apply equally to man and rat. Another awkward fact for rational-addiction models is that most addicts quit and relapse regularly. And while rational addicts should buy drugs in large quantities at discounted prices, and self-ration them out of inventory, addicts usually buy in small packages; cf. Wertenbroch (1998). These facts suggest a struggle between a visceral desire or drugs and cortical awareness that drug use is a losing proposition in the long run; relapse occurs when the visceral desire wins the struggle. It is also remarkable that repeated drug use conditions the user to expect drug administration after certain cues appear (e. g. , shooting up in a certain neighborhood or only smoking in the car). Laibson (2001) created a pioneering formal model of cue-dependent use, showing that there are multiple equilibria in which cues either trigger use or are ignored. The more elaborate model of Bernheim and Rangel (in press), is a paradigmatic example of how economic theory can be deeply rooted in neuroscientific details. They assume that when a person is in a hot state they use drugs; in a cold state, whether they use is a rational choice.A variable S, from 0 to N, summarizes the person’s history of drug use. When he uses, S goes up; when he abstains S goes down. They characterize destructively addictive drugs and prove that the value function is declining in the drug-use history variable S. By assuming the cold state reflects the person’s true welfare, they can also do welfare analysis and compare the efficiency effects of policies like laissezfaire, drug bans, sin taxes and regulated dispensation. Decision-making under Risk and Uncertainty Perhaps the most rapid progress in neuroeconomics will be made in the study of risky decision-making. We focus on three topics: risk judgments, risky choice and probability.Risk and ambiguity: In most economic analyses risk is equated with variation of outcomes. But for most people, risk has more dimensions (particularly emotional ones). Studies have long shown that potential outcomes which are catastrophic and difficult to control are perceived as more risky (controlling for statistical likelihood); see Peters and Slovic (2000). Business executives say risk is the chance of loss, especially a large loss, often approximated by semivariance (the variance of the loss portion of an outcome distribution); see Luce and Weber (1986), MacCrimmon and Wehrung (1986) and recent interest in ‘‘value-at-risk’’ measures in finance. # The editors of the Scandinavian Journal of Economics 2004.Neuroeconomics: why economics needs brains 567 Fig. 2. Opening the brain at the Sylvian fissure (between temporal and frontal lobes) shows the insula cortex (frontal pole is on the right). Illustration courtesy of Ralph Adolphs These properties are exemplified by the fear of flying (which is statistically much safer than driving) phobias and public outcry to dangers which are horrifying, but rare (like kidnappings of children and terrorist bombings). Since economic transactions are inherently interpersonal, emotions which are activated by social risks, like shame and fear of public speaking could also influence economic activity in interesting ways.A lot is known about the neural processes underlying affective responses to risks; see Loewenstein, Hsee, Welch and Weber (2001). Much aversion to risks is driven by immediate fear responses, which are largely traceable to a small area of the brain called the amygdala; cf. LeDoux (1996). The amygdala is an ‘‘internal ‘hypochondriac’ ’’ which provides ‘‘quick and dirty’’ emotional signals in response to potential fears. But the amygdala also receives cortical inputs which can moderate or override its responses. 6 An interesting experiment illustrating cortical override begins with fearconditioning—repeatedly admi nistering a tone cue followed by a painful electric shock.Once the tone becomes associated in the animal’s mind with the shock, the animal shows signs of fear after the tone is played, but before 6 For example, people exhibit fear reactions to films of torture, but are less afraid when they are told the people portrayed are actors and asked to judge some unemotional properties of the films. # The editors of the Scandinavian Journal of Economics 2004. 568 C. F. Camerer, G. Loewenstein and D. Prelec ` the shock arrives (the tone is called a ‘‘conditioned stimulus’’ a la Pavlov’s famous salivating dogs). When the tone is played repeatedly but not followed by a shock, the animal’s fear response is gradually ‘‘extinguished’’. At this point, a Bayesian might conclude that the animal has simply ‘‘unlearned’’ the connection between the tone and the shock (the posterior probability P(shockjtone ) has fallen).But the neural reality is more nuanced than that. If the shock is then readministered following the tone, after a long period of extinction, the animal immediately relearns the tone–shock relation and feels fear very rapidly. 7 Furthermore, if the connections between the cortex and the amygdala are severed, the animal’s original fear response to the tone immediately reappears. This means the fear response to the tone has not disappeared in the amygdala, it is simply being suppressed by the cortex. Another dimension of risky choice is ‘‘ambiguity’’—missing information about probabilities people would like to know but don’t (e. g. , the Ellsberg paradox).Using fMRI, Hsu and Camerer (2004) found that the insula cortex was differentially activated when people chose certain money amounts rather than ambiguous gambles. The insula (shown in Figure 2) is a region that processes information from the nervous system about bodi ly states—such as physical pain, hunger, the pain of social exclusion, disgusting odors and choking. This tentative evidence suggests a neural basis for pessimism or ‘‘fear of the unknown’’ influencing choices. Risky choice: Like risk judgments, choices among risky gambles involve an interplay of cognitive and affective processes. A well-known study reported in Bechara, Damasio, Tranel and Damasio (1997) illustrates such collaboration.Patients suffering prefrontal damage (which, as discussed above, produces a disconnect between cognitive and affective systems) and normal subjects chose cards from one of four decks. Two decks had more cards with extreme wins and losses (and negative expected value); two decks had less extreme outcomes but positive expected value (EV), and subjects had to learn these deck compositions by trial-and-error. They compared behavior of normal subjects with patients who had damage to prefrontal cortex (PFC; which limits the a bility to receive emotional ‘‘somatic markers’’ and creates indecision). Both groups exhibited similar skin conductance reactions (an indication of fear) immediately after large-loss cards were encountered. 7 This is hard to reconcile with a standard Bayesian analysis because the ame ‘‘likelihood evidence’’ (i. e. , frequency of shock following a tone) which takes many trials to condition fear in the first part of the experiment raises the posterior rapidly in just one or two trials in the later part of the experiment. If the animal had a low prior belief that tones might be followed by shocks, this could explain slow updating in the first part. But since the animal’s revealed posterior belief after the extinction is also low, there is no simple way to explain why updating is so rapid after the fear is reinstalled. # The editors of the Scandinavian Journal of Economics 2004. Neuroeconomics: why economics needs brains 569Howe ver, normal subjects learned to avoid those risky ‘‘bad decks’’ but the prefrontal-damage patients rapidly returned to the bad decks shortly after suffering a loss. In fact, even among normal subjects, those who were lowest in emotional reactivity acted more like the prefrontal patients; see Peters and Slovic (2000). Homeostasis in the body implies that people will adapt to changes and, consequently, are more sensitive to changes than to absolute levels. Kahneman and Tversky (1979) suggest the same principle applies to gains and losses of money from a point of reference and, furthermore, that the pain of loss is stronger than the pleasure of equal-sized gains.Imaging studies show that gains and losses are fundamentally different because losses produce more overall activation and slower response times, and there are differences in which areas are active during gain and loss; see Camerer, Johnson, Rymon and Sen (1993) and Smith and Dickhaut (2002). Dickhaut, McCabe, Nagode, Rustichini and Pardo (2003) found more activity in the orbitofrontal cortex when thinking about gains compared to losses, and more activity in inferior parietal and cerebellar areas when thinking about losses. O’Doherty, Kringelbach, Rolls, Jornak and Andrews (2001) found that losses differentially activated lateral OFC and gains activated medial OFC. Knutson, Westdorp, Kaiser and Hommer (2000) found strong activation in mesial PFC on both gain and loss trials, and additional activation in anterior cingulate and thalamus during loss trials.Single-neuron measurement by Schultz and colleagues, as reported in Schultz and Dickinson (2000), and Glimcher (2002) in monkeys has isolated specific neurons which correspond remarkably closely to familiar economic ideas of utility and belief. Schulz isolates dopaminergic neurons in the ventral tegmental ‘‘midbrain’’ and Glimcher studies the lateral inferior parietal (LIP) area. The midbrain neuron s fire at rates which are monotonic in reward amount and probability (i. e. , they ‘‘encode’’ reward and probability). The LIP neurons seem to encode expected value in games with mixed-strategy equilibria that monkeys play against computerized opponents. An interesting fact for neuroeconomics is that all the violations of standard utility theories exhibited in human choice experiments over money have been replicated with animals.For example, in ‘‘Allais paradox’’ choices people appear to overweight low probabilities, give a quantum jump in weight to certain outcomes, and do not distinguish sharply enough between intermediate probabilities; see e. g. Prelec (1998). Rats show this pattern too, and also show other expected utility violations; see e. g. Battalio, Kagel and Green (1995). People also exhibit ‘‘context-dependence’’: whether A is chosen more often than B can depend on the presence of an irrelevant third choice C (which is dominated and never chosen). Context-dependence means people compare choices within a set rather than assigning separate numerical utilities. Honeybees exhibit the same pattern; see Shafir, Waite and Smith (2002). The striking # The editors of the Scandinavian Journal of Economics 2004. 570 C. F. Camerer, G. Loewenstein and D. Prelec arallelism of choices across species suggests that the human neural circuitry for these decisions is ‘‘old’’, and perhaps specially adapted to the challenges all species face—foraging, reproduction and survival—but not necessarily consistent with rationality axioms. Gambling: Economics has never provided a satisfactory theory of why people both insure and gamble. Including emotions and other neuroscientific constructs might help. Like drug addiction, the study of pathological gambling is a useful test case where simple theories of rationality take us only so far. About 1% of the people wh o gamble are ‘‘pathological’’—they report losing control, ‘‘chasing losses’’, and harming their personal and work relationships; cf. National Research Council (1999).Pathological gamblers are overwhelmingly male. They drink, smoke and use drugs much more frequently than average. Many have a favorite game or sport they gamble on. Gambling incidence is correlated among twins, and genetic evidence shows that pathologicals are more likely to have a certain gene allele (D2Al), which means that larger thrills are needed to get modest jolts of pleasure; see Comings (1998). One study shows that treatment with naltrexone, a drug that blocks the operation of opiate receptors in the brain, reduces the urge to gamble; see e. g. Moreyra, Aibanez, Saiz-Ruiz, Nissenson and Blanco (2000). 8 Game Theory and Social PreferencesIn strategic interactions (games), knowing how another person thinks is critical to predicting that person’s be havior. Many neuroscientists believe there is a specialized ‘‘mind-reading’’ (or ‘‘theory of mind’’) area which controls reasoning about what others believe and might do. Social preferences: McCabe, Houser, Ryan, Smith and Trouard (2001) used fMRI to measure brain activity when subjects played games involving trust, cooperation and punishment. They found that players who cooperated more often with others showed increased activation in Broadmann area 10 (thought to be one part of the mind-reading circuitry) and in the thalamus (part of the emotional ‘‘limbic’’ system).Their finding is nicely corroborated by Hill and Sally (2002), who compared normal and autistic subjects playing ultimatum games, in which a proposer offers a take-it-or-leave-it division of a sum of money to a responder. Autists often have trouble figuring out what other people think and believe, and are thought to have deficits in area 10. A bout a quarter of their autistic adults offered nothing in the ultimatum game, which is consistent with an inability to imagine why others would regard an offer of zero as unfair and reject it. The same drug has been used to successfully treat ‘‘compulsive shopping’’; see McElroy, Satlin, Pope, Keck and Hudson (1991). # The editors of theScandinavian Journal of Economics 2004. 8 Neuroeconomics: why economics needs brains 571 One of the most telling neuroscientific findings comes from Sanfey, Rilling, Aaronson, Nystrom, Leigh and Cohen’s (2003) fMRI study of ultimatum bargaining. By imaging the brains of subjects responding to offers, they found that very unfair offers ($1 or $2 out of $10) differentially activated prefrontal cortex (PFC), anterior cingulate (ACC) and insula cortex. The insula cortex is known to be activated during the experience of negative emotions like pain and disgust. ACC is an ‘‘executive function’’ are a which often receives inputs from many areas and resolves conflicts among them. After an unfair offer, the brain (ACC) struggles to resolve the conflict between wanting money (PFC) and disliking the ‘‘disgust’’ of being treated unfairly (insula). Whether players reject unfair offers or not can be predicted rather reliably (a correlation of 0. 45) by the level of their insula activity. It is natural to speculate that the insula is a neural locus of the distaste for inequality or unfair treatment posited by recent models of social utility, which have been successfully used to explain robust ultimatum rejections, public goods contributions, and trust and gift-exchange results in experiments; see Fehr and Gachter (2000) and Camerer (2003, Ch. 2). 10 ?In a similar vein, de Quervain, Fischbacher, Treyer, Schellhammer, Schynyder, Buck and Fehr (2004) used PET imaging to explore the nature of costly third-party punishment by players A, after B played a trust game with player C and C decided how much to repay. When C repaid too little, the players A often punished C at a cost to themselves. They found that when players A inflicted an economic punishment, a reward region in the striatum (the nucleus accumbens) was activated—‘‘revenge tastes sweet’’. When punishment was costly, regions in prefrontal cortex and orbitofrontal cortex were differentially active, which indicates that players are responding to the cost of punishment. Zak, Matzner and Kurzban 2003) explored the role of hormones in trust games. In a canonical trust game, one player can invest up to $10 which is tripled. A second ‘‘trustee’’ player can keep or repay as much of the tripled investment as they want. Zak et al. measured eight hormones at different points in the trust game. They find an increase in oxytocin—a hormone 9 The ACC also contains ‘‘spindle cells’’—large neurons shape d like spindles, which are almost unique to human brains; see Allman, Hakeem, Erwin, Nimchinsky and Hof (2001). These cells are probably important for the activities which distinguish humans from our primate cousins, such as language, cognitive control and complex decision-making. 0 The fact that the insula is activated when unfair/offers are rejected shows how neuroeconomics can deliver fresh predictions: it predicts that low offers are less likely to be rejected by patients with insula damage, and more likely to be rejected if the insula is stimulated indirectly (e. g. , by exposure to disgusting odors). We don’t know if these predictions are true, but no current model would have made them. # The editors of the Scandinavian Journal of Economics 2004. 572 C. F. Camerer, G. Loewenstein and D. Prelec which rises during social bonding (such as breast-feeding)—in the trustee if the first player ‘‘trusts’’ her by investing a lot.Interesting eviden ce of social preferences comes from studies with monkeys. Brosnan and de Waal (2003) find that monkeys will reject small rewards (cucumbers) when they see other animals getting better rewards (grapes, which they like more). Hauser, Chen, Chen and Chuang (2003) also find that tamarins act altruistically toward other tamarins who have benefited them in the past. These studies imply that we may share many properties of social preference with monkey cousins. Iterated thinking: Another area of game theory where neuroscience should prove useful is iterated strategic thinking. A central concept in game theory is that players think about what others will do, and about what thers think they will do, and this reasoning (or some other process, like learning, evolution or imitation) results in a mutually consistent equilibrium in which each player guesses correctly what others will do (and chooses their own best response given those beliefs). From a neural view, iterated thinking consumes scarc e working memory and also requires one player to put herself in another player’s ‘‘mind’’. There may be no generic human capacity to do this beyond a couple of steps. Studies of experimental choices, and payoff information subjects look up on a computer screen, suggest 1–2 steps of reasoning are typical in most populations; cf. e. g.Costa-Gomes, Crawford and Broseta (2001), Johnson, Camerer, Sen and Tymon (2002), and see Camerer, Ho and Chong (2004). 11 Bhatt and Camerer (2004) find differential activation in the insula in players who are poor strategic thinkers, which they interpret as reflecting self-focus that harms strategizing. V. Conclusions Economics parted company from psychology in the early twentieth century after economists became skeptical that basic psychological forces could be measured without inferring them from behavior (and then, circularly, using those inferred forces to predict behavior). Neuroscience makes this measurement possible for the first time. It gives a new way to open the ‘‘black box’’ which is the building block of economic systems—the human mind.More ambitiously, students are often bewildered that the models of human nature offered in different social sciences are so different, and often contradictory. Economists emphasize rationality; psychologists 11 It is important to note, however, that principles like backward induction and computation of equilibrium can be easily taught in these experiments. That means these principles are not computationally difficult, per se, they are simply unnatural. In terms of neural economizing, this means these principles should be treated like efficient tools which the brain is not readilyequipped with, but which have low ‘‘marginal costs’’ once they are acquired. # The editors of the Scandinavian Journal of Economics 2004. Neuroeconomics: why economics needs brains 73 emphasize cognitive limits and sensitivity of choices to contexts; anthropologists emphasize acculturation; and sociologists emphasize norms and social constraint. An identical question on a final exam in each of the fields about trust, for example, would have different ‘‘correct’’ answers in each of the fields. It is possible that a biological basis for behavior in neuroscience, perhaps combined with all-purpose tools like learning models or game theory, could provide some unification across the social sciences; cf. Gintis (2003). Most economists we talk to are curious about neuroscience but skeptical of whether we need it to do economics.The tradition of ignoring the inside of the ‘‘black box’’ is so deeply ingrained that learning about the brain seems like a luxury we can live without. But it is inevitable that neuroscience will have some impact on economics, eventually. If nothing else, brain fMRI imaging will alter what psychologists believe, leading to a ripple effect which will eventually inform economic theories that are increasingly responsive to psychological evidence. Furthermore, since some neuroscientists are already thinking about economics, a field called neuroeconomics will arise whether we like it or not. So it makes sense to initiate a dialogue with the neuroscientists right away. Economics could continue to chug along, paying no attention to cognitive neuroscience.But, to ignore a major new stream of relevant data is always a dangerous strategy scientifically. It is not as if economic theory has given us the final word on, e. g. , advertising effectiveness, dysfunctional consumption (alcoholism, teenage pregnancy, crime), and business cycle and stock market fluctuations. It is hard to believe that a growing familiarity with brain functioning will not lead to better theories for these and other economic domains, perhaps surprisingly soon. In what way might neuroscience contribute to economics? First, in the applied domai n, neuroscience measurements have a comparative advantage when other sources of data are unreliable or biased, as is often the case with surveys and self-reports.Since neuroscientists are ‘‘asking the brain, not the person’’, it is possible that direct measurements will generate more reliable indices of some variables which are important to economics (e. g. , consumer confidence, and perhaps even welfare). Second, basic neuroeconomics research will ideally be able to link hypotheses about specific brain mechanisms (location, and activation) with unobservable intermediate variables (utilities, beliefs, planning ahead), and with observable behavior (such as choices). One class of fruitful tasks is those where some theories assume choice A and choice B are made by a common mechanism, but a closer neural look might suggest otherwise.For example, a standard assumption in utility theory is that marginal rates of substitution exist across very different bundles of goods (and, as a corollary, that all goods can be priced in money terms). But some tradeoffs are simply # The editors of the Scandinavian Journal of Economics 2004. 574 C. F. Camerer, G. Loewenstein and D. Prelec too difficult or morally repulsive (e. g. , selling a body part). Elicited preferences often vary substantially with descriptions and procedures; e. g. Ariely, Loewenstein and Prelec (2003). Neuroscience might tell us precisely what a ‘‘difficult’’ choice or a ‘‘sacred preference’’ is, and why descriptions and procedures matter. 12 A third payoff from neuroscience is to suggest that economic choices which are considered different in theory are using similar brain circuitry.For example, studies cited above found that insula cortex is active when players in ultimatum games receive low offers, when people choose ambiguous gambles or money, when people see faces of others who have cooperated with them, and in players who are poor strategic thinkers. This suggests a possible link between these types of games and choices which would never have been suggested by current theory. A fourth potential payoff from neuroscience is to add precision to functions and parameters in standard economic models. For instance, which substances are cross-addictive is an empirical question which can guide theorizing about dynamic substitution and complementarity. A ‘‘priming dose’’ of cocaine enhances craving for heroin, for example; cf. Gardner and Lowinson (1991).Work on brain structure could add details to theories of human capital and labor market discrimination. 13 The point is that knowing which neural mechanisms are involved tell us something about the nature of the behavior. For example, if the oxytocin hormone is released when you are trusted, and being trusted sparks reciprocation, then raising oxytocin exogeneously could increase trustworthy behavior (if the brain doesn’t adjust fo r the exogeneity and ‘‘undo’’ its effect). In another example, Lerner, Small and Loewenstein (in press) show that changing moods exogeneously changes buying and selling prices for goods. The basic point is that understanding the effects of biological and emotional processes like hormone 2 Grether, Plott, Rowe, Sereno and Allman (2004) study a related problem—what happens in second-price Vickrey auctions when people learn to bid their valuations (a dominant strategy). They find that the anterior cingulate is more active before people learn to bid their values, which is a neural way of saying that bidding valuations is not transparent. 13 It has been known for some time that brains rapidly and unconsciously (‘‘implicitly’’) associate same-race names with good words (‘‘Chip-sunshine’’ for a white person) and opposite-race names with bad words (‘‘Malik-evil’’); see e. g. McConn ell and Leibold (2001). This fact provides a neural source discrimination which is neither a taste nor a judgment of skill based on race (as economic models usually assume).Opposite-race faces also activate the amygdala, an area which processes fear; cf. Phelps, O’Connor, Cunningham, Funayama, Gatenby, Gore and Banaji (2000). Importantly, implicit racial associations can be disabled by first showing people pictures of faces of familiar other-race members (e. g. , showing Caucasians a picture of actor Denzel Washington). This shows that the implicit racial association is not a ‘‘taste’’ in the conventional economic sense (e. g. it may not respond to prices). It is a cognitive impulse which interacts with other aspects of cognition. # The editors of the Scandinavian Journal of Economics 2004. Neuroeconomics: why economics needs brains 575 elease and moods will lead to new types of predictions about how variations in these processes affect economic beha vior. In the empirical contracts literature there is, surprisingly, no adverse selection and moral hazard in the market for automobile insurance; cf. Chiappori, Abbring, Heckman and Pinquet (2001). But there is plenty of moral hazard in healthcare use and worker behavior. A neural explanation is that driving performance is both optimistic (everyone thinks they are an above-average driver, so poor drivers do not purchase fuller coverage) and automatic (and is therefore unaffected by whether drivers are insured) but healthcare purchases and labor effort are deliberative.This suggests that ‘‘degree of automaticity’’ is a variable that can be usefully included in contracting models. Will it ever be possible to create formal models of how these brain features interact? The answer is definitely ‘‘Yes’’, because models already exist; cf. e. g. Benhabib and Bisin (2004), Loewenstein and O’Donoghue (2004) and Bernheim and Rangel (in press). A key step is to think of behavior as resulting from the interaction of a small number of neural systems—such as automatic and controlled processes, or ‘‘hot’’ affect and ‘‘cold’’ cognition, or a module that chooses and a modu

Environmental Proposal and Presentation Essay

For this assignment we chose the Patton-Fuller Community Hospital for our virtual organization. This facility is a non-for-profit social insurance association that has supplied an extremely wide cluster of preferred value aids and offices to the town of Kelsey and the encompassing groups since 1975. The healing center supplies centered utilities for example emergency restorative consideration, surgery, work and committal, private medicine and radiology for developed persons and youthful kids. â€Å"As one of the first facilities in Kelsey, they are besides dedicated to supplying a sort of projects that will underpin the health and welfare of their neighborhood inhabitant numbers† (Apollo Group, 2006). The prime causes for hospital’s actuality from a dissection of the task, dream, and objectives are to be the social insurance affiliation of elective for patients, human services masters and M.D.s. Other nexus explanations are to supply esteem honor scoring social insurance aids to the group by â€Å"viably treating contaminations and damages, supplying early mediation and preventive consideration,† and twofold-checking their workers embraces inventiveness, respectability, esteem, aid, teamwork and freedom (Gwinnett health Center, 2009). In this entry we will infer two strategies to make collusions between the Patton-Fuller Community Hospital and its arranged inner and outside stakeholders. We will likewise clarify how the contrasts between administration and administration influence organizing inside the Patton-Fuller Community Hospital. At long last, we will recommend a nature that is supportive of crew working and studying and that considers maintainable improvement and imaginatively inside the Patton-Fuller Community Hospital. BusinessDictionary.com (2009) describes stakeholders as: Persons, gathering, or cooperation that has immediate or digressive venture in an organization on the grounds that it can influence or be affected by the organization’s exercises, targets, and arrangements. Enter stakeholders in a venture affiliation envelop lenders, clients, heads, laborers, legislature, proprietors, dealers, mergers, and the group from which the venture portrayals its assets. In spite of the fact that stake holding is ordinarily self-legitimizing, not all stakeholders are equivalent and dissimilar stakeholders merit to unique concerns. Core stakeholders of the facility are the laborers, patients, guests, speculators, and the group. Smallwood, N., Sweetman, K. & Ulrich, D. (2007, November 11) state: â€Å"Employees longing to work in an area where they can meet their distinctive yearnings and likes. Pioneers who imagine assignments, work domains, and visions help laborers be both skilled and promised to their work.† Patients need to comprehend that they are getting the greatest consideration reasonable and be skilled to accept the forethought suppliers. Voyagers longing to grasp their friends and family are acquiring the finest forethought and that they can accept guardians. Communities need chiefs to construct affiliations that are collectively mindful, with hoe they treat the indigenous nature and how they help the greater group. Speculators-need supervisors to keep their vows, advance an influencing evolvement technique arrange focus abilities to the plan then afterward to twofold-watch that folks are promised to committing on these manufacturing. At the point that they do, gurus pay the affiliation with abnormal amounts of confidence sometime to come, which changes over into higher business worth. Controllers need chiefs to administer themselves in concurrence with heightened moral standards and in a kind predictable with master and legitimate guidelines. The difference between leadership is when it comes to a company you work for a manage needs to decide what the company can do to become better. The management has to come up with a conclusion to come together with a project that they can do to keep business flowing and customers to keep coming. Leaders can get the job done if the employees are doing their job. Some people do less work then others therefore that can bring a company down depending on what they are doing at the job. If you practice more on a job you can get more things done even if you have to ask a manager to give you more things to do. If you do less then less performance will get done. No practice will show and more improvement will be needed from that person. It is always areas that you will definite need improvement to do good and in areas that you fall short. You also can start off with what is easy to you and come back and do the hardest part later. Some people thrive on getting better while others are there just to get a paycheck. We all have to deal with different task at a job whether it is easy or hard. You can get ahead a lot quick then waiting for someone to do your job for you. People that doing well; it will better them later on down the road. This is the best time to get things done now and it will get you a better future later. Today is the best time to develop and accomplish new ideas in the company. Leaders will guide you and make sure you are getting the job done the right way. They also like to guide you to look at things in a very different way in life. Management means stay on task and gets focus on what your job is. There is room to self-develop in the work place. They would like to get and input on what makes people do the things they do. People are very different in many different ways no two people thinks alike. When good managers see you are doing a good job that really makes them feel good. They will let you know and mention to the boss. When you have a great manager they will make sure that the work they gave you has gotten done and therefore, you can move to the next task. They want employees to keep things done the right way in a straight and narrow. Sometimes it take good strong leadership to get people to pull together to get the work done. If you are motivate you can achieve your goals when you have good leadership it tends to make people wants to succeed motivation can come from growing and wanting to be successful. Managing stress in a workplace can depend on the mental or physical level of what could have happen in that people life. Tell the manager about your stress in the workplace can be very risky or very effective. Stress can affect you mental and physical in our personal lives. Too much stress can affect our jobs and getting things done that we tend to forget about in our daily lives with so much going on as far as school, children, work and other etc. Some signs of stress can include headaches making mistakes and being very forgetfulness. Make sure you are taking a break and eat lunch or talking to someone so you won’t get burnt out about things that are taking our attention. Don’t take alcohol or do drugs while you are stressing it really just adds to the problem. The best thing to do is get counseling or see a doctor to discuss your problems. It can be helpful for others to know how you are doing. Stress can also lead to depression it can get in the way of your daily routines and communication to others. Be aware of the stress you can cause up on yourself and continue to get help. Patton Fuller Community Hospital’s point is to come to be a trusted organization in the company of its clients and scratch stakeholders, by supplying worth client mind and utilities to all its patients and by helping and reckonings of nexus stakeholders. Today with the expansion of wellbeing forethought costs, the necessity for productive consideration administration is on the register of essential concerns. Patton-Fuller comprehends this requirement and accordingly centers on the viewpoints of nexus stakeholders, patients, suppliers and laborers in the team effort technique. In place for the group to relegate on its promise to be the medicinal services cooperation of decision for patients, medicinal services masters and M.D.s, Patton-Fuller comprehends the vitality of useful territory interrelationships in which organize, inspire and summon enter staff in the course of the attainment of lifelong organizational objectives and targets.

Composition titled there is nothing that we as individuals can do to Essay

Composition titled there is nothing that we as individuals can do to prevent climate change - Essay Example They suggest that efforts to reduce  Ã‚  emissions are unnecessary and dangerous to economic growth and development.† (University Corporation for Atmospheric Research) The emission of Carbon Dioxide from burning of Fossil fuels is primarily cited as the cause of greenhouse effect, which has caused climate changes like global warming. Our lives are heavily dependent on energy obtained from burning of fossil fuels to keep our industries, homes and transport systems running; therefore, it is impossible not to use it. Scientists are not sure what impact will minimizing greenhouse gas emissions have on climate change. Therefore, even if we as individuals try to limit the green house gases, it would have no effect on the overall climate change because after all it is a global phenomenon and it has already been triggered. The rate at which the climate is changing is so fast that we as individuals can do nothing to prevent

CLASS ROSTER PROJECT and Summary Grade by Artifact Coursework

CLASS ROSTER PROJECT and Summary Grade by Artifact - Coursework Example Analogous to the hierarchical model only there's no parent/child difference. Any record kind may be linked with any number of dissimilar record types. Data quality and operations on the attributes are summarizing inside objects. Objects can inherit properties, can be widespread to form new objects, and are reusable. The O-O model is a quite original way of looking at things. Just remember that these are universal policy. Common sense will constantly require to be applied to check the excellence of the relationship modeling. Again this step is supposed to be done extremely methodically. A relation in 4NF that does not have a unite dependency. A link dependency occurs when a relation cannot be alienated into two (or more) relations such that the ensuing tables can be recombined to form the unique table. By means of normalization entire we know move on to step 3, where we step back at our normalized relations and see of there's any way we can logical combinations we can make to simplify the set, decrease overlap, and/or increase competence. One of the major complaints concerning relational databases is the intricacy of the relations themselves. That is, how everything's split out into every these tables. This is where we effort to reduce that difficulty.

Women in Law School Research Paper Example | Topics and Well Written Essays - 2000 words

Women in Law School - Research Paper Example Instead, women have to face many challenges in order to find success in an environment which one would consider to be extremely hostile to them. This is the reason why there is need for the continued use of affirmative action to support women who would like to get into this field, to ensure that women are not only successful in getting admitted in law schools, but also that they are treated as partners to their male counterparts rather than as subordinates. While in the United States, affirmative action has largely worked to bring women into the male dominated field of law, more still needs to be done to ensure that even more women are interested in it and that once they get there, they are able to get fair treatment. There has been, in recent years, support for women to get into the field of law, and most of this support has come from other women in the field. It has been suggested that the best way of encouraging more women to get into the field is through giving more women opportu nities to fill up available leadership roles in law schools. Such a move would ensure that the voice of women is heard in the field and further, it will provide them with the opportunity for further advancement. Furthermore, it has been stated that the best way to deal with the problems that women face in law school and after is to build awareness that bias against women in law is still immensely strong and that this matter should be addressed. Literature Review McGinley (99) in her article states that there is still quite a large gap in the gender divide in the faculties of law schools all over the country. Not only do the women who work in law schools have to do jobs which are considered to be feminine by their male counterparts, but they also have to teach courses which many would consider to have been female-identified courses. McGinley argues that the leadership positions in law schools have been unfairly distributed, with women getting the lesser share than men. She states tha t while there are almost no women in any of the available leadership positions in law schools, men dominate nearly all of these positions, with eighty percent of the deans being men. Furthermore, men have been found to teach courses which can be considered to be prestigious as well as male-identified; furthering the rift between the sexes in law schools. She states that women have to go through differential expectations from their colleagues as well as their students and often have to bear the brunt of their male counterparts' intimidating behaviour at work. McGinley, in this article makes use of manhood studies and other research that has been conducted in the social sciences to make an identification of the gendered structures, practices, and traits that have come to bring harm to women professors practising law. She sets out to provide a hypothetical context that attempts to make an explanation of the reasons why women do not enjoy status equality in the legal field do not compar ed to their male counterparts. While many of the practices, which are conducted towards women in law schools, appear to be gender-neutral, they end up accomplishing the very opposite, because it works to propagate stereotypes and isolation which has been found to be harmful to women. The article works to reveal the gendered nature of the structures and practices of law schools, especially in administration, and sets out to challenge the belief of natural difference as a cause for the disproportion between men and women law professors. The conclusion of the study conducted in this article is that it is only through exposing these gender biased practices

Portfolio on my communication adequacy Essay Example | Topics and Well Written Essays - 750 words

Portfolio on my communication adequacy - Essay Example Portfolio on my communication adequacy Towards the beginning of the task, we chose as a gathering that every colleague would be in charge of one piece of the presentation. My part was to incorporate the distinctive parts into one firm presentation. To comprehend why this critical incident happened and how comparable circumstances can perhaps be kept away from later on, I will utilize the media richness hypothesis (taking into account Lengel & Daft (1988). As indicated by this hypothesis, diverse structures or "mediums" of correspondence have distinctive abilities to convey and transmit data. The hypothesis contends that convoluted messages, or messages that convey a great deal of data, ought to be transmitted utilizing rich mediums, for example, video conferencing or face to face, while simpler messages can be viably be conveyed utilizing more straightforward mediums, for example, email and pamphlets. Case in point, a basic message in regards to the area of a meeting can be sufficiently conveyed utilizing an email or pamphlet, while a more unpredictable message, for example, the justification for a departmental rebuild ought to be conveyed up close and personal. The hypothesis additionally contends that none- routine messages o ught to be conveyed utilizing media-rich channels. As depicted in Table 1, my message determined an assignment due date for my fellow team members. Figure 1 demonstrates that my message was not suitably set on the media l richness model, clarifying why my colleagues did not precisely decode it.

Online Personality Tests Essay Example | Topics and Well Written Essays - 500 words

Online Personality Tests - Essay Example I can tell that the test was valid because occasionally, it asked for a response to a question and later again asked for a response to a statement negating the prior question. For example, if a respondent said â€Å"very accurate† in response to the statement â€Å"I easily get upset†, he/she should say â€Å"very inaccurate† to the next statement â€Å"I am not easily frustrated†. After the test, the next screen explained my personality using adjectives constituting one to two words like â€Å"fun-loving and broad-minded† etc. I think the descriptions offered by test results were the true reflection of my personality. Such online tests give a person a clear insight into his/her personality so that he/she can know what can he/she change about his/her behavior to convert into a better person. Such online tests can be occasionally dangerous if an individual starts believing them blindly. It was a long test based on 45 general and about 20 particular questions that pertained to investigating the demographics of an individual. As the name implies, the test was designed to measure five key personality traits namely, â€Å"openness to experience, conscientiousness, extraversion, agreeableness and neuroticism.† I would criticize the test for a number of reasons. First, it was too taxing to answer about 70 questions in order to get a computer assessment of my personality. Often, the statements were too long and cumbersome. Secondly, the test had some unnecessary details about myself. The items constituting the test were fundamentally assessing my behavior. I can tell this from the fact that the five personality traits I have mentioned before are the most underlying components of an individual’s behavior. The screen that popped up once I submitted the completed test showed a grading for my personality on the scale of the five personality traits as named befor e. The grading was

Revelatios Essay Example | Topics and Well Written Essays - 250 words

Revelatios - Essay Example Through this he tells the story of African American faith and persistence from slavery to freedom. Revelations is divided into three parts; each includes several dances representing different experiences in Baptist worship: â€Å"Pilgrim of sorrow†-dancers portray people who hope for salvation in spite of life’s difficulties. Movements suggest reaching toward heaven and being pulled back. â€Å"Take me to the water†, Ailey’s own baptism. Ritual where one becomes a full member of congregation. Takes place in ponds in church.is shown by movements suggesting rippling water. â€Å"Move, members, move† begins as church members gathers to worship.is shown by movements that suggest gossiping conservations, discomfort on a hot day and the hope of salvation. Revelations draws on black vernacular culture (derived from what Ailey called the â€Å"blood memories â€Å"of his childhood in Texas);because they were so strong he felt they were part of him as much as the blood that ran through his

Int'l Quality Management System - TQM Project Research Paper

Int'l Quality Management System - TQM Project - Research Paper Example The head office and factory is situated in Arabian Desert, some kilometers away from Dubai International Airport. Its other branches are found in China, Sudan, Bangladesh, Iran and India. The company offers a complete solution with it diversification into tile adhesives and related products in a joint-venture with Laticrete International, Inc. USA, a joint-venture with German-based Kludi to manufacture a range to taps, faucets and accessories for sanitary ware products. RAK ceramics started its operation in Saudi Arabia because of the area’s largest market due to high living standards and a rising economy with brand-conscious people (Ryan,2000). The major shareholder of this company is its founder, Sheikh Saud Alquasimi, who is also the Ruler of Ras Al Khaimah. i) The company faces tough competition from national and regional players in most of the countries. Some of the competitors are Kajaria Ceramics, H&R Johnson India, Asian Granito India, Nitco Tiles and Somany Ceramics. Total Quality Management (TQM) is a philosophy of an organization in which it focuses on the core activities of the organization and ensures that the customer’s needs are satisfied. The key components of an organization are the quality and the reduction of waste. The organization implements the Total Quality management by starting at the top levels of the organization. This requires that the top management of the organization do not only embrace the concepts of TQM but also ensure satisfaction of the organizations customers (Charantimath,2011). The organization can ensure that the customers receive satisfaction through promoting the customer needs first. It is thus imperative that the organization implement the Total Quality Management for it to achieve its objectives. The implementation of the TQM is very significant in the organization in that after its implementation, the

The Evolution of Communication in the Technology-Focused World Essay

The Evolution of Communication in the Technology-Focused World - Essay Example Current issues are discussed, such as how ‘sexting’ represents a dilemma for public officials, and why it’s important to select complex, hard-to-guess passwords for important online accounts. In all, the paper presents a concise look at a few of the many areas affected by the rapid adoption of technology as a means of communication, and what it will ultimately mean for the duties performed by public officials. Keywords: communication, technology, criminal justice, public sector The Evolution of Communication as the World Becomes More Technology-Focused ‘Communication,’ as defined by the Oxford English Dictionary, is â€Å"the successful conveying or sharing of ideas and feelings.† The methods by which such conveyances are made have been widely divergent through time. Whereas in the distant past, the dominant mode of communication might have entailed making gestures combined with short words or phrases to make one’s intentions known, the advent of the modern technological era has spawned an entirely new set of paradigms. The rapid rise in the speed and breadth of global communications enabled by technology has given rise to a number of descriptive labels. Industry expert Manuel Castells, a professor and Wallis Annenberg Chair in Communication Technology and Society at the University of Southern California, has dubbed the era as, ‘the network society’ (Castells, 2010). He postulates, â€Å"I contend that around the end of the second millennium of the common era a number of major social, technological, economic and cultural came together to give rise to a new form of society† (p. xvii). The referred to paradigm shift in communication is cited by Castells as creating a â€Å"shift from traditional mass media to a system of horizontal communication networks organized around the Internet and wireless communication† (p. xviii). Adopting a cautionary tone, he notes that a fundamental cultural tra nsformation has taken place, based on digital information processing, that has engendered a â€Å"generational divide† between persons born before 1969, which he marks as the ‘Internet Age’ and those thereafter. While wholesale changes to longstanding global societal structures have doubtlessly created a sense of disorientation among some, the ability to instantly communicate has brought about many improvements worldwide. In the critical area of health care, communication technology has enabled unprecedented levels of access to information on diseases and treatments, which are instantly accessible over Internet-based protocols. Innovations such as Web-based medical collaborations, wherein practitioners in different geographical locations can share data from a single clinical record, have become a vital part of the treatment process (Sands, 2008). Advances in communication technology have completely reorganized the traditional business model. Whereas once only the larger corporate structures had the wherewithal to distribute goods and services worldwide, global access is now easily accessible to even small proprietors.

Pride and Prejudice Movie Review Essay Example for Free

Pride and Prejudice Movie Review Essay 1) In 1859, Charles Darwin described a model of how living things change over time. He described this model and the evidence that supported it in a book called On The Origin of Species. Which scientific term is used to describe a testable model that seeks to explain natural phenomena? A) data B) hypothesis C) observation D) theory 2) When an experiment is repeated and the new results are different from the original results, what could you assume to be true? A) The results from both experiments are worthless. B) The first experiments results are worthless and should be discarded. C) The experimental design is flawed and the experiment should be discarded. D) Neither test results are 100% reliable and additional experimentation is needed. 3) All of the following EXCEPT the resistance of _________ demonstrate artificially selected resistance. A) beef cattle, to shipping fever, B) many agricultural wheat varieties, to drought and fungus, C) Anatarctic fish to freezing, due to antifreeze proteins in their blood, D) many common grasshopper species to pesticides, such as diazinon, sevin, and others, 4) Which fact about fossils is MOST important to scientists who study evolution? A) Fossils are often found in sedimentary rock. B) Footprints, body structures, and even animal droppings can become fossilized. C) The age of a fossil can be determined by examining the rock strata in which the fossil is found. D) The formation of a fossil depends on the geologic and chemical conditions present when an organism dies. 5) According to the fossil record, five ________________took place, which lowered the variety of species found on Earth today. A) mass clonings B) microevolutions C) mass extinctions D) mass revolutions 6) When an experiment is repeated and the new results are different from the original results, what could you assume to be true? A) The first set of results MUST be incorrect and thrown out. B) The second set of results MUST be inaccurate and thrown out. C) The experimental design must be flawed and should be scrapped. D) The original experiment MAY be inaccurate and further experimentation is needed. 7) If an experiments results are accurate, when the experiment is repeated by another scientist, the results A) should be similar to those obtained originally. B) will be identical every time the experiment is repeated. C) should be completely different for a different scientist.

Utilitarianism and Business Ethics

Utilitarianism and Business Ethics Deception, greed, and extreme pressure led to the demise of Enron (Beenen and Pinto, 2009). Employees need the ability to disengage ethical issues from these complications of self-interest and provide clear definition; employees need to distinguish between negligible issues typical of work life and critical issues that threaten a companys ethical environment. Ethical issues come with temptations and threats. By understanding threats to personnel interests, alternatives will arise to implement correction. Going along with the crowd can endorse immediate career interests whereas resiting can put status, career and family well-being at risk. By accepting ethical theory, this can act as a guideline for a human resource (HR) manager to identify and handle the issues of self-interest. DeGeorge (2010) defines utilitarianism as an act of moral significance established by its involvement to create the most amount of good for the most number of people. This is based on the ability to foresee the consequences of an action as the choice that succumbs to the greatest benefit, to the majority of people, is the choice that is ethically correct. Beenen and Pinto (2009) identify that corrupt organisations, such as Enron, act unethically by decisions, that are usually, made by a group of senior employees to benefit the organisation. Decisions made by Jeff Skilling (senior manager) to cook the accounting books may have been, in his opinion, as an ethically correct way to benefit the shareholders and stakeholders, by portraying a strong financial image. However, the consequences of this action didnt create the most amount of good for the most amount of people. Instead self-interest influenced unethical behaviour by means of greed and pressure from Wall Street to benefit, not the organisation as a whole but, Jeff Skilling and management, personally, for financial gain. Rational self-interest is good however greed is eventually detrimental (DeGeorge, 2010). While the theory of utilitarianism will always argue to benefit the majority, it can also neglect the minority (DeGeorge, 2010). Sherron Watkins ability to make judgment that Enrons accounting standards were immoral created a rule utilitarianism approach with regards to the law and the concern with fairness; seeking to benefit the majority of people. Therefore, added benefits of rule utilitarianism values justice and includes beneficence at the same time. In the eyes of a HR manager, by taking action the majority of the stakeholders would benefit from a moral organisation adhering to their code of conduct, conducting fairness in all of their business activities. However, an issue with this decision, while sherron was commended for doing the right thing, showed that her actions to neglect the corrupt senior management team (minority) for the stakeholders (majority) for a more ethical workplace started to inflicted damage to the entire business. Cable, News, Network (CNN) (2002) stated that Enron filed for liquidation, people lost their jobs, some committed suicide and many were jobless. Sherron may have been trying to do the right (and difficult) thing but it may not have been the best way to get ahead. Her self-interest was going to become a consequence for the majority and she was unable to predict the future so as to see how her decisions would affect people later on. A HR manager needs to take into consideration that there is no wa y of telling exactly what the costs of our behaviour will be, we just do what we think is right at that specific time (DeGeorge, 2010). After examining DeGeorge (2010) a utilitarian approach to this case study in handling self-interest is too impractical. This is because the practical application of the theory requires the ability to predict the long-term consequences of an action and, to predict those consequences with unfailing accuracy; past experience can, to some extent, guide future experience. However, there is never any guarantee that circumstances will turn out exactly the same (DeGeorge, 2010). This uncertainty can create unexpected results making the utilitarian approach look unethical, as the time the choice was made didnt benefit the majority for the greater good. A HR manager needs to identify that the flaw in utilitarianism theory has no consideration for the minority; however, kantian theory suggests that it doesnt neglect this issue i.e. allowing the minority to suffer for the benefit of the majority. According to DeGeorge (2010) Kants deontology theory is supported by the actions of an individual under consideration. A collective approach to an action suggests it can determine whether an action is moral as it allows one to portray the result of everyone universally contributing to this action. Immanuel Kants theory (DeGeorge, 2010) suggests that an individual must have the freedom to truly act in a moral way. In the case study, some employees understand the company is behaving unethically i.e. dodgy account standards for personal gain. A HR manager could identify that these people have a choice to voice their concern, leave the company or go along with the crowd; however self-interest and the ability to be disciplined may pose a threat to take any action. These people have physiological needs to support family and a moral decision to voice their concerns, in this respect, could pose an issue. By being immoral or turning a blind eye, to the situation, could be the easiest option. Employees do have a choice and the freedom to make a moral decision however self-interest can sometimes turn a moral idea into an immoral decision; without the discipline there is no freedom (Wood, 2008). A deeper analysis of Kants theory suggests that the concept of ethics is not based on desires or circumstances. Moral law is a definite necessity because it has no precursor; there is no but part in the command (DeGeorge, 2010). Sherron Watkins provided an example of how this theory works. Sherron adhered to Enrons ethical code of conduct when analysing the ethical dilemma of accounting irregularities that were present. By identifying this problem to her manager, Ken Lay, she fulfilled her obligations of responsibility. Upholding ones duty is whats considered ethically correct (Wood, 2008). Sherron had found the morality through rationale of her mind as she was not influenced by feelings (preference), but instead she was concerned with fixed statements of duty (I mustà ¢Ã¢â€š ¬Ã‚ ¦). The theory suggests that an individual has no flexibility and no chance to consider ones own position (DeGeorge, 2010). Naturally, people seem to acknowledge that certain rules must have rational exceptions. For instance, with regards to Ken Lay his decision not to fire Sherron Watkins could have jeopardised Andy Fastows position and the companies indicating individuals may need to lie to protect others. So, could a HR manager be reasonable to assume that the same rules can be applied consistently in different circumstances? This makes Kantian ethics rigid because the consequence of an action is not necessarily separated from the action itself (DeGeorge, 2010). Unlike utilitarianism this theory is not based on social utility. It avoids the utilitarian flaw of allowing the minority to suffer for the benefit of the majority, based on free choice and similar to that of John Rawls theory of justice. As described by DeGeorge (2010) the egalitarian, John Rawls, devised a theoretical model that proposed an individual who, covered in a veil of ignorance, would recommend a just society without any understanding of their status in society. The individual would choose a system of justice that sufficiently provided for the lower end of society because the individual could end up being in that lower position so, avoids it by being just and fair. Enron executives paid above market bonuses and salaries, they awarded unethical behaviour and punished good behaviour. In a sense many employees would have tried to do the right thing i.e. perform what was asked of them in their relevant job role. While most of these activities were contributing to the overall unethical behaviour, an employee would reasonably obtain their wage and bonus if they performed in a satisfactory or above expected manner. Self-interest presents an underlying problem here. While the pay system of any organisation should be fair and just, greed and extreme pressure to perform presented self-interest drivers that awarded immoral behaviour. Rawls argued that regimented societies are uncommon due to the fact that what is just and unjust is usually in dispute (Rawls, 2003) Robert Nozicks libertarian theory of ethics is similar to Rawls in that they both believe utilitarianism is a flawed theory due to the importance on the consequences of policies and behaviour (Nozick, 1974 Rawls, 2003). Both indicate that since utilitarianism highlights utility or contentment, within society, it cannot justify an explanation of assertions such as assertions of right which people are free to make upon the actions of others. Consequently, each sets out to develop a political theoretical model which sufficiently suggests what Nozick depicts as, the fundamental Kantian principle that individuals are ends and not merely means (DeGeorge, 2010). Nozicks theory suggests that people have the right to possess entitlements such as remuneration as long as it doesnt worsen the position of anyone else (Nozick, 1974). But if these entitlements were obtained unethically, does this worsen the position of anyone else? In one hand people are morally trying to do the right thing but, in the case of Cassandra, they eventually get punished; she moved to another position being seen as a threat. On the other hand people knew their actions were contributing to immoral behaviour as self-interest (greed and pressure) clouded their decision to do what is right. So what are our rights in situations such as the above? The theory of rights can give a HR manager insight into how individuals are protected in an ethically correct way. According to DeGeorge (2010) rights are proposed by society which is protected and is given the uppermost precedence. Since society endorsees rights they are considered to be ethically correct and suitable. DeGeorge (2010) indicates that an individual must interpret what characteristics of rights are in society, as this can pose implications. The underlying issue in the case study is self-interest. Senior management is responsible to ensure that the integrity of the controls in the environment determines the effectiveness of any control system, including remuneration, leave entitlements and job opportunities. With reference to Enrons code of ethics (2000) dignity and mutual respect, for all employees, is a right that the company has promised to respect and uphold. Clearly, this right was not evident in this organisation. Individuals such as Sherron Watkins, Cassandra and Jeff McMahon were not given the right to be treated in a respectful manner as they were moved into different position disguised as promotions. The relevant rights in a business context to freedom of speech were noted by management, as they gave them a chance to express themselves however, this was quickly extinguished. Control systems (rules) may interfere with ones own self interest to succeed or avoid failure; controls are intended for exactly that purpose. Those who would respond to business pressures by evading controls will devise rationales and tactics to justify such an evasion for tactics of disinformation and deception that they may use (Donnelly, 2003). For rights theory to be practical it must be used in combination with another ethical theory, such as ethical relativism, that will consistently outline the objectives of society. Ethical relativism refers to the principle that there are no commonly valid or required moral standards as any two individuals with differences in culture, who have different ethical views, regarding an action, could simultaneously be correct (DeGeorge, 2010). Beenen and Pinto (2009) indicated that Jeff McMahon knew that Enrons accounting practices were unethical while Andy Fastows belief indicated his way was ethically correct i.e. for the greater good of the company. While both ethical views are different they are also both correct. The underlying similarity here indicates that self-interest for personal gain was the main driver relative to their different ethical opinions. DeGeorge (2010) suggests a clear understanding of this theory must be carefully dissected when compared with cultural relativism; as cultural relativism explains the way people actually behave, and ethical relativism recommends how people ought to behave. A HR manager should acknowledge that differences dont imply that there are no commonly valid moral standards. It teaches us that individuals may not always agree on what the principals are or should be. Relativism is a stronger claim as refutation that there are usually suitable moral standards. It is a theoretical claim about the existence of common moral standards, whether or not people believe in them (DeGeorge, 2010). Therefore, it must be verified or unproven by theoretical influences. In summary, ethical theories need to be examined and measured against one another to tackle the issue of self-interest. No one theory on its own is truly valid, rather a collaboration of all theories should be used in order to give a professional (HR manager) the necessary tools to create strategies and examine the likelihood of unethical behaviour. Enron ignored its ethical code of conduct, self-interest (greed and extreme pressure) influenced management in an unethical manner. For ethics to be adhered to companies need to go beyond the notion of simple legal compliance and adopt values based on organisational culture. Ethical reasoning is not natural its a skill that must be learned and practiced.