What can we learn from neurofinance ?
Résumé
Neurofinance is a relatively recent field which aims to unveil the neurobiological
mechanisms through which decisions are made in finance. This article investigates
how neurosciences can contribute to the study of finance and the most appropriate
ways for neuroscientific methodologies to be applied to financial situations. In order
to examine these areas, we have produced a literature review around three axes
of the main neuroscientific studies published in finance: financial risk; discounting
and credit risk; information and trading decisions. One of the crucial insights offered
by neurofinance is how to reconcile classic and behavioral finance by showing
that emotions are critical to rational decision-making, in spite of also being part of
the origin of biases. Through its unique set of techniques, neurofinance is able to
pinpoint the biological and neurological explanations behind some of the common
biases highlighted by behavioral finance, as well as tackle some novel questions.
We conclude this review by pointing toward potentially fruitful avenues for future
research and by highlighting which methods appear particularly well adapted for
neurofinancial studies.