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Neuroeconomics and the Firm

Neuroeconomics and the Firm

Edited by Angela A. Stanton, Mellani Day and Isabell M. Welpe

The ideal firm has been studied over several centuries, yet little is known about what makes one successful and another fail. This pioneering book brings together leading researchers investigating the concept of the firm from a neuroscientific perspective.

Chapter 12: Embodied Entrepreneurship: A Sensory Theory of Value

Frédéric Basso, Laurent Guillou and Olivier Oullier

Subjects: business and management, entrepreneurship, strategic management, economics and finance, behavioural and experimental economics, economic psychology


Frédéric Basso, Laurent Guillou and Olivier Oullier INTRODUCTION ‘I am drawing the line between outer and inner environment not at the firm’s boundary but at the skin of the entrepreneur, so that the factory is part of the external technology; the brain, perhaps assisted by computers, is the internal’ (Simon, 1996, p. 25). One could see in Herbert Simon’s words an invitation to consider neuroscientific advances (and the advent of neuroeconomics) in the economy of the firm to better understand the behavior of the entrepreneur. Simply put, neuroeconomics can be defined as the use of cognitive and brain sciences to uncover the dynamics underlying economic decision making (for example, Zak, 2004). Over the past decade cognitive neuroscientists interested in the neural foundations of the states of mind at stake in economic decisions have taken note of and used the strong body of results coming from well-controlled empirical and theoretical paradigms that experimental economics has been offering. Combining the concept and methods of (social) neuroscience and experimental economics has therefore provided original insights that could lead to a better understanding of the processes underlying preferences, investments and economic exchanges between two (or more) individuals. Here we propose to build on Friedrich Hayek’s pioneer book The Sensory Order (Hayek, 1952a), not only to specify Simon’s views but also to expand them in order to design neuroeconomic paradigms that would be useful to understand the economy of the firm. To do so, we consider the connections between the skin and the...

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