Question

economic decision making is ultimately subjective and value driven. what does this means?

Answer 1

Decision-making based on value is of a widespread nature. It occurs whenever an individual selects from several alternatives depending on the subjective value it imposes upon them. Examples include basic animal behaviors like bee foraging, and complicated human decisions such as stock-market trading. Neuroeconomics is a relatively new discipline that explores the brain's equations for making value-based decisions, as well as the neural execution of those computations. This aims to establish a scientifically based theory of how human decision-making can be implemented in both the natural and social sciences.

The subjective significance of the different outcomes is determined by the interpretation of the decision as well as by additional factors unique to the choice, including the temporal interval between the decision and the result and the uncertainty associated with different choices. Greater delay and greater uncertainty contribute to less accurate predictions of the outcome of the decision, and in anxiety, each can influence decision making.

Social psychologists and sociologists have long been interested in core values, motivational constructs which are inherently linked to the self-scheme and are used to guide actions and decisions across different situations and time points. Therefore, core value can be an important determinant of individual differences in the calculation of economic value and in decision making.