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Performance feedback about whether responses are correct or incorrect provides valuable information to help guide learning. Although feedback itself has no extrinsic value, it can produce subjective feelings similar to “rewards” and “punishments.” Therefore, feedback can play both an informative and a motivational role. Over the past decade, researchers have identified a neural circuit that processes reward value and promotes reinforcement learning, involving target regions of dopaminergic input (e.g., striatum and ventromedial prefrontal cortex). Importantly, this circuit is engaged by performance feedback even in the absence of reward. Recent research suggests that feedback-related brain activity can be modulated by motivational context, such as whether feedback reflects goal achievement, whether learners are oriented toward the informative versus evaluative aspect of feedback, and whether individual learners are motivated to perform well relative to their peers. This body of research suggests that the brain responds flexibly to feedback, based on the learner’s goals.

Many psychologists posit that intrinsic motivation generated by personal interest and spontaneous satisfactions is qualitatively different from extrinsic motivation generated by external rewards. However, the contemporary neural understanding of human motivation has been developed almost exclusively based on the neural mechanisms of extrinsic motivation. In neuroscience studies on extrinsic motivation, striatum activity has been consistently observed as the core neural system related to human motivation. Recently, a few studies have started examining the neural system behind intrinsic motivation. Though these studies have found that striatum activity is crucial for the generation of intrinsic motivation, the unique neural basis of intrinsic motivation has not yet been fully identified. I suggest that insular cortex activity, known to be related to intrinsic enjoyment and satisfaction, is a unique neural component of intrinsic motivation. In this chapter, I addressed the theoretical background to and empirical evidence for this postulation.

Decision-making rationality is said to be bounded by managers’ cognitive capabilities. Recent studies indicate that accounting functions evolved to augment the cognitively bounded human brain in handling complex economic exchanges. The neuroscience discipline suggests that human brains have the ability to implement “automatic” processes of positive versus negative emotional stimuli to make rational decisions. Neuroscientific evidence shows that the activations in the ventral striatum decrease with negative emotional information/motives and increase with positive emotional information/motives. The authors, hence, argue that our understanding of the decision-making rationality in financial and managerial decisions could be enhanced by using a functional neuroimaging approach.

Decision-making rationality has been focal in debt covenant violation and earnings management research. The contracting theory predicts a relationship between managers’ decisions and the proximity of violating debt covenants. However, no prior research has investigated brain activities associated with the evaluation of debt covenant violation and earnings management. Meanwhile, in another strand of research, there is an extensive prior literature concerning the consequences of managers’ decisions and the use of accounting information in relation to their evaluative style, i.e., supervisory style. The authors argue that the relationship between the proximity to debt covenants violation and earnings management incentives is contingent upon managers’ supervisory style. However, no previous research has examined the impact of the supervisory style on earnings management in the context of the proximity to debt covenants violation and other earnings management incentives.

In this research note, we argue that neuroaccounting could be relied on to examine the relationship between the proximity to debt covenants and earnings management, contingent upon managers’ supervisory style, by capturing brain activities. The adoption of the neuroscience functional neuroimaging approach in this field should contribute to the understanding of managers’ behaviors and provide implications for research and practitioners. The goal of this research note is to provide a new avenue for future research in this field.

Studies in psychology have long revealed that making personal choice involves multiple motivational consequences. It has only been recent, however, that the literature on neuroscience started to examine the neural underpinnings of personal choice and motivation. This chapter reviews this sparse, but emergent, body of neuroscientific literature to address possible neural correlates underlying personal choice. By conducting the review, we encourage future systematic research programs that address this topic under the new realm of “autonomy neuroscience.” The chapter especially focused on the following motivational aspects: (i) personal choice is rewarding, (ii) personal choice shapes preference, (iii) personal choice changes the perception of outcomes, and (iv) personal choice facilitates motivation and performance. The reviewed work highlighted different aspects of personal choice, but indicated some overlapping brain areas – the striatum and the ventromedial prefrontal cortex (vmPFC) – which may play a critical role in motivational processes elicited by personal choice.

Purpose – This chapter addresses the nature, formalization, and neural bases of (affective) social ties and discusses the relevance of ties for health economics. A social tie is defined as an affective weight attached by an individual to the well-being of another individual (‘utility interdependence’). Ties can be positive or negative, and symmetric or asymmetric between individuals. Characteristic of a social tie, as conceived of here, is that it develops over time under the influence of interaction, in contrast with a trait like altruism. Moreover, a tie is not related to strategic behavior such as reputation formation but seen as generated by affective responses.

Methodology/approach – A formalization is presented together with some supportive evidence from behavioral experiments. This is followed by a discussion of related psychological constructs and the presentation of suggestive existing neural findings. To help prepare the grounds for a model-based neural analysis some speculations on the neural networks involved are provided, together with suggestions for future research.

Findings – Social ties are not only found to be important from an economic viewpoint, it is also shown that they can be modeled and related to neural substrates.

Originality/value of the chapter – By providing an overview of the economic research on social ties and connecting it with the broader behavioral and neuroeconomics literature, the chapter may contribute to the development of a neuroeconomics of social ties.

Chinese herbal medicine is effective in treating some addictions using, for example, aural acupuncture. Its application outside of China is limited due to a lack of clinical trials and ‘scientific’ evidence. U'finer™ is one of the first herbal remedies to undergo clinical trials, and is so far demonstrating a remarkable ability to improve brain function, restore physical health and enhance recovery from opiate addiction. The drug's pioneer Dr Wei Wang explains his methods and the drug's unique ability to treat the body and mind.

The purpose of this study is to examine how consumer personality trait impulsiveness influences trustworthiness evaluations of online-offers with different trust-assuring and trust-reducing elements by measuring the brain activity of consumers. Shoppers with high degrees of impulsiveness are referred to as hedonic shoppers, and those with low degrees are referred to as prudent consumers.

To investigate the differences between neural processes in the brains of hedonic and prudent shoppers during the trustworthiness evaluation of online-offers, the present study used functional magnetic resonance imaging (fMRI) and region-of-interest analysis to correlate neural activity patterns with behavioral measures of the study participants.

Drawing upon literature reviews on the neural correlates of both trust in online settings and consumer impulsiveness and using an experimental design that links behavioral and fMRI data, the study shows that consumer impulsiveness can exert a significant influence on the evaluation of online-offers. With regard to brain activation, both groups (hedonic and prudent shoppers) exhibit similar neural activation tendencies, but differences exist in the magnitude of activation patterns in brain regions that are closely related to trust and impulsiveness such as the dorsal striatum, anterior cingulate, the dorsolateral prefrontal cortex and the insula cortex.

The data provide evidence that consumers within the hedonic group evaluate online-offers differently with regard to their trustworthiness compared to the prudent group, and that these differences in evaluation are rooted in neural activation differences in the shoppers’ brains.

Marketers need to be made aware of the fact that neurological insights can be used for market segmentation, because consumers’ decision-making processes help explain behavioral outcomes (here, trustworthiness evaluations of online-offers). In addition, consumers can learn from an advanced understanding of their brain functions during decision-making and their relation to personal traits such as impulsiveness.

Considering the importance of trust in online shopping, as well as the fact that personality traits such as impulsiveness influence the purchase process to a high degree, this study is the first to systematically investigate the interplay of online trustworthiness perceptions and differences in consumer impulsiveness with neuroscientific methods.

The rapid progress of neuroscience and the interdisciplinary collaboration between neuroscience and psychology have begun to provide valuable insights for understanding the dynamic and implicit nature of human motivation by identifying the in vivo neural mechanism of motivation. One of the fundamental questions in the field of the neuroscience of motivation is what neural mechanisms underlie the direction, intensity, and guidance of our motivation and subsequent actions. This prologue explains how neuroscience can contribute to the understanding of human motivation. To accomplish this purpose, we present what neuroscientific data look like, identify 13 key motivation-relevant brain structures, and introduce 3 key motivation-centric brain circuits – namely, the reward circuit, the value-based decision-making pathway, and the self-regulation/self-control network.

Purpose – Long-term care (LTC) services assist people with limitations in the ability to perform activities of daily living (ADLs) as a result of chronic illness or disabilities. We discuss possible behavioral explanations for the under-purchasing of LTC insurance, as well as the current state of knowledge on the neural mechanisms behind these behavioral factors.

Findings/approach – Ideas from behavioral economics are discussed, including risk-seeking over losses, ambiguity-preferring over losses, hyperbolic discounting, and the effect of the aging process on the underlying neural mechanisms supporting these decisions. We further emphasize the role of age, as aging is a highly heterogeneous process. It is associated with changes in both brain tissue as well as cognitive abilities, and both are characterized by large individual differences. Therefore, understanding the neural mechanisms is vital to understanding this heterogeneity and identifying possible methods of interventions.

Research implications – LTC financing and insurance is a looming issue in the next 10–20 years. It is important to understand the process by which people make decisions about LTC insurance, heterogeneity in decision processes across individuals, and how these decisions interact with changes in policy and private LTC insurance markets.

Originality/value of the chapter – By providing an overview of the current state of knowledge in behavioral economics of LTC insurance and the neuroscience of aging, this chapter provides some new directions in the emerging area of neuroeconomics of aging.

Teenagers are typically described as impulsive and risk taking. Yet recent research shows that this observation does not hold in all contexts. Rather, adolescents show higher impulsivity and risk taking than children or adults in affective contexts. Motivational and affective processes are therefore of particular interest when trying to understand typical adolescent behavior. Additionally, pubertal hormones are hypothesized to play a special role in adolescents’ motivated decision making. However, evidence for the mechanisms underlying this relationship is sparse. In this chapter, we aim to integrate findings from human and animal studies in order to elucidate the specific impact of pubertal hormones on motivational processes in adolescence. Against this background, we critically discuss and reinterpret recent findings in psychology and neuroscience, speculate about underlying mechanisms, and suggest new approaches for future studies of adolescent behavior.