Developments in our understanding of human decision making have important implications for agricultural economics and teaching in general. Psychology, neuroeconomics, and economics deal with decision making in different ways, with economics assuming rational behavior while making decisions, and psychology and neuroeconomics studying how decision making occurs in various situations and in different parts of the brain. Results from a great deal of research suggest there are two competing processes for making decisions. Neuroeconomics makes a crucial distinction between automatic (“hot”) and controlled (“cold”) decision-making processes. Automatic processes are quick, efficient, reactive, and can often be carried out in parallel. These processes frequently originate from emotions and are often based on instant reactions to stimuli. In direct contrast, controlled processes are deliberate, sequential, voluntary, and analytical. Economists base their theoretical models of human decisionmaking on controlled processes which represent the rational side of human decision-making. Agricultural economists can be more relevant and more realistic in their teaching programs if they accurately reflect how decisions are made. In particular, teaching how both processes work, offers the opportunity to help students better understand economics and help them become more effective decision-makers in all aspects of their lives.
neuroscience, agricultural economics, agribusines, brain-based learning, decision making