Ironically, even when it comes to deconstructing a decision, the academics who spend all their time attempting to understand exactly how we do it, arent even quite sure. We talk about expected utility and prospect theory, but to date, the world really lacks any broad agreement on how we actually make decisions. Of course, there are scores of books on the subject and, while I respect most of their efforts, just last year, the highly respected brain scientist Joseph LeDoux said we need a whole new theory of the brain when he appeared on the Charlie Rose show. We will discuss this later in the workshop, but recently David Brookss The Social Animal, R. Douglas Fieldss The Other Brain, the edited edition of a book called Mind in Context, and David Eaglemans Incognito have each made significant contributions, and in fact, offered completely new models of the mindjust as LeDoux has called for. Today, at the risk of appearing highly immodest, I would also like to

Simply add back feeling and emotions to their rightful place in the hierarchy of the mind. Doing so, if you dont mind me saying so, explains everything.

As I have already said, everyones been mainly, if not exclusively, focused on only two of the three dimensions of our psyches: thinking and behavior. Even the new field of behavioral finance has mostly gotten caught in this web of an exclusively cognitive-behavioral paradigm. The idea of the triune brain, in which emotions are left over remnants of an early evolutionary stage, is now rejected by the cuttingedge of neuroscience, but many academic behavioral economists appear unaware of this development occurring on the other ends of their campuses. Proponents of this relatively new behavioral view of decision making critique the appearance of mistaken decision shortcuts (heuristics) and phenomena like over-reliance on the recent past. But if we can remodel the experimental models to include the all-important concept of context, particularly emotional context, everything looks different. In fact, all the questions start to be answered, and the right model begins to fall elegantly in pl

Lose the serial computer-based idea of the brain and mind. Instead think more in terms of baking cookies or thunderstorms, both of which have a finite set of ingredients or elements but virtually an infinite number of ways that they can be combined to create an end result. And the outcome always depends on the contextwhat came right before to produce the end result. With cookies, it is the temperature of the oven. With thunderstorms, it is the exact way two air masses collide. Context is key. In terms of your brains development, it begins with a substrate of feeling and emotion. As infants, we know basically two broad categories of information, our mother as an object and how we feel. As children, we know a little bit more, but how we feel shapes how we learn language, math, and our self-concept. The latest in memory research, for example, shows that the more