Abstract
Behavioral economics and neuroeconomics are two relatively new disciplines that are dedicated to the study of decision making in humans. Although the two fields share similarities, they have somewhat different goals. This chapter will give a brief history of behavioral economics and neuroeconomics. These fields arose in reaction to the neoclassical economics approach that dominated in the early twentieth century. The focus of behavioral economics, a subfield of economics, is to create realistic, descriptive models of human decision making that incorporate psychological principles. The focus of neuroeconomics, on the other hand, is to use knowledge of the mechanisms underlying choices in order to create more realistic models of choice. This chapter will describe some of the major insights to emerge from these fields so far. It will also discuss how findings from behavioral economics and neuroeconomics have been applied in areas such as public policy and marketing.