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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. From the viewpoint of economics, the firm's purpose is to maximize shareholders' wealth; resources are commodities, each with its particular supply and demand curve that can be manipulated by the firm to its own benefit. Traditionally, the firm is focused on the strategic, operational and resource management objectives. The editors instead suggest that the objective of the firm is equal to the objectives of its workers. The definition and function of risk in decision-making, ethics, trust and the global financial crisis are all discussed. They are analyzed from the perspective of human bio-physiology, using scanning and hormonal analysis tools, with a focus on the implications for the bottom line of the firm. With experimental as well as theoretical and applied contributions, this book will benefit scholars and students of economics, business management, finance, organizational behavior, entrepreneurship, psychology, neuroscience and law. Practitioners of management, entrepreneurship and law firms will also find this book to be a captivating read.
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Neuroeconomics and the Firm Neuroeconomics and the Firm Edited by Angela A. Stanton Center for Neuroeconomics Studies, Claremont Graduate University, USA Mellani Day Colorado Christian University, USA Isabell M. Welpe Professor of Strategy and Organization, Munich University of Technology, Germany Edward Elgar Cheltenham, UK • Northampton, MA, USA © Angela A. Stanton, Mellani Day and Isabell M. Welpe 2010 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical or photocopying, recording, or otherwise without the prior permission of the publisher. Published by Edward Elgar Publishing Limited The Lypiatts 15 Lansdown Road Cheltenham Glos GL50 2JA UK Edward Elgar Publishing, Inc. William Pratt House 9 Dewey Court Northampton Massachusetts 01060 USA A catalogue record for this book is available from the British Library Library of Congress Control Number: 2009938415 ISBN 978 1 84844 440 9 02 Printed and bound by MPG Books Group, UK Contents List of figures List of tables Contributors Foreword by David B. Audretsch vii ix x xx Introduction Angela A. Stanton, Mellani Day and Isabell M. Welpe PART 1 1 2 3 4 5 THE BLACK BOX Neuroeconomics of environmental uncertainty and the theory of the firm Helen Pushkarskaya, Michael Smithson, Xun Liu and Jane E. Joseph Risk and ambiguity: entrepreneurial research from the perspective of economics Angela A. Stanton and Isabell M. Welpe What you think is not what you think: unconsciousness and entrepreneurial behavior Eden S. Blair PART 2 1 13 29 50 TRUST, GREED AND THE BLACK BOX Using brains to create trust: a manager’s toolbox Paul J. Zak and Amos Nadler The new millennium’s first global financial crisis: the neuroeconomics of greed, self-interest, deception, false trust, overconfidence and risk perception Donald T. Wargo, Norman A. Baglini and Katherine A. Nelson v 69 78 vi Neuroeconomics and the firm PART 3 6 7 8 9 In the words of Larry Summers: gender stereotypes and implicit beliefs in negotiations Laura J. Kray, Connson C. Locke and Michael P. Haselhuhn Ovulatory shifts in women’s social motives and behaviors: implications for corporate organizations Kristina M.