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II Dopamine and Economic Decision Making 1

The neurotransmitter dopamine has been found to play a crucial role in choice, learning and belief formation. The best developed current theory of dopaminergic function is the “reward prediction error” hypothesis that dopamine encodes the difference between the experienced and predicted “reward” of an event. We provide axiomatic foundations for this hypothesis to help bridge the current conceptual gap between neuroscience and economics. Continued research in this area of overlap between social and natural science promises to overhaul our understanding of how beliefs and preferences are formed, how they evolve, and how they play out in the act of choice.