7: choices Neuroeconomics: Complex Choices and Valuation

This note differentiates between simple choices (binary decisions) and complex choices (multi-attribute, high uncertainty, dynamic settings), posing the question of whether similar neural mechanisms govern both. It introduces neuroforecasting, which uses neuroimaging data to predict aggregate market behavior or individual purchasing patterns.

Simple buy/don't buy decision experiments reveal that the brain's valuation system, specifically the medial prefrontal cortex (MPFC) and ventral striatum, shows increased activity when a product is chosen, reflecting subjective value. This neural activity can predict subsequent purchase decisions.

However, the simple choice model faces challenges in real-world purchasing scenarios due to greater complexity. These scenarios involve multi-attribute comparison and integration (e.g., weighing various attributes of multiple product options) and significant contextual influences (such as store layout, social

presence, temporal constraints, emotional states, and marketing cues) that dynamic preferences.