The sky is gray, but you're not sure if the clouds will clear or rain will pour. Do you grab an umbrella when you go outside? Such decisions are filled with ambiguity, and we're faced with them daily. "Almost every decision has some ambiguity," says Kota Saito, an economist who develops empirical and mathematical models on how people make decisions—insight that can inform socioeconomic policy. This fall, he joins Caltech as an assistant professor and the newest faculty member of the Division of the Humanities and Social Sciences.
Caltech has announced the creation of the Ronald and Maxine Linde Institute of Economic and Management Sciences. The initiative will bring together the best scientific minds and the best quantitative business practices, permitting a distinctive and targeted educational opportunity for Caltech's students and providing cutting-edge research opportunities for Caltech's faculty.
We've all heard the predictions: e-commerce is going to be the death of traditional commerce; online shopping spells the end of the neighborhood brick-and-mortar store. While it's true that online commerce has had an impact on all types of retail stores, it's not time to bring out the wrecking ball quite yet, says a team of researchers from Caltech.
Parents pursuing adoption within the United States have strong preferences regarding the types of babies they will apply for, tending to choose non-African-American girls, and favoring babies who are close to being born as opposed to those who have already been born or who are early in gestation. These preferences are significant and can be quantified in terms of the amount of money the potential adoptive parents are willing to pay in finalizing their adoption.
The human brain is a big believer in equality—and a team of scientists from the California Institute of Technology (Caltech) and Trinity College in Dublin, Ireland, has become the first to gather the images to prove it. Specifically, the team found that the reward centers in the human brain respond more strongly when a poor person receives a financial reward than when a rich person does.
Caltech neuroscientists and their colleagues have tied the human aversion to losing money to a specific structure in the brain—the amygdala. The finding, described in the latest online issue of the Proceedings of the National Academy of Sciences, offers insight into economic behavior, and also into the role of the amygdala, which registers rapid emotional reactions and is implicated in depression, anxiety, and autism.
Economists and neuroscientists from Caltech have shown that they can use information obtained through fMRI measurements of whole-brain activity to create feasible, efficient, and fair solutions to one of the stickiest dilemmas in economics, the public goods free-rider problem—long thought to be unsolvable. This is one of the first-ever applications of neurotechnology to real-life economic problems, the researchers note.
When it comes to intellectual curiosity and creativity, a market economy in which inventors can buy and sell shares of the key components of their discoveries actually beats out the winner-takes-all world of patent rights as a motivating force, according to a California Institute of Technology (Caltech)-led team of researchers.
In a strategic game, the success of any player depends not just on his or her own actions, but on the behavior of every other player in the game. To be successful, players must not only pay attention to what other players do, but also how they are thinking.