Physioeconomics

Physioeconomics is a promising research methodology that belongs to the field of experimental economics. It enhances existing methods by integrating well established physiological measures like galvanic skin response and heart rate into the analysis of behavior in order to gain insights into the emotional processes that guide humans in economic decision making.

Laboratory settings have been used extensively to investigate human decision making in economic situations. Previous research has shown that participants in experiments do not always behave in an economically rational way. This seemingly irrational behavior cannot be fully explained by standard economic theory. These findings underline the assumption that human decision making is a dynamic process which comprises not only rational facets but also emotional facets. To learn more about motives and emotions in economic decision making, questionnaires have often been added to the standard experimental procedure. One problem of questionnaires is that they suffer from the drawback of subjective answers or even manipulation. Physioeconomics extents these existing methods by a more objective measure: autonomic nervous system activity. Using physiological arousal as a proxy for emotions is a well established approach in Psychophysiology. The analysis of physiological measures offers the intriguing opportunity to examine objective parameters that show robust correlations to emotional processes. This new approach can help to better explain and predict behavior in economic situations.