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ALL THE ECONOMY THAT IS INSIDE A NEURON



A “neuron” is a specialized cell of the nervous system responsible for transmitting and processing information through electrical and chemical signals. It is the fundamental component of the brain, spinal cord and nerves, allowing communication between different parts of the body.

Main parts of a neuron:

1. “Soma or cell body”: Contains the nucleus and other organelles that maintain the basic functions of the cell.

2. “Dendrites”: Branches that receive signals from other neurons.

3. “Axon”: Extension that transmits electrical signals to other neurons, muscles or glands.

4. “Synaptic buttons”: Ends of the axon that release neurotransmitters to communicate with other cells through the synapse.

5. “Myelin”: Insulating layer that covers some axons, facilitating the speed of signal transmission.

Neurons communicate with each other through a synapse, a microscopic space between neurons where neurotransmitters transmit the chemical signal from one cell to another.

THE ECONOMIC NEURON

Neurons influence economic decision making through their involvement in information processing and option evaluation within the brain. In the field of “Neuroeconomics”, we study how neural circuits intervene in economic choices, showing how different brain areas and types of neurons affect our decisions under various circumstances, including uncertainty, risk and rewards.

Neural processes in economic decision making:

1. “Prefrontal cortex”:

   - This region is involved in long-term planning, risk assessment and decision making. Neurons in the prefrontal cortex play a key role in calculating the costs and benefits of a decision.

   - Helps process the “subjective evaluation” of different alternatives, such as how much a person values ​​a certain economic option.

2. “Nucleus accumbens”:

   - Part of the “reward system” in the brain, it regulates motivation and the desire to obtain financial rewards. Neurons here respond to the expectation of gain and the pleasure associated with a reward.

   - They influence impulsive or short-term decisions when immediate rewards are attractive.

3. “Amygdala”:

   - Involved in the processing of emotions, neurons in the amygdala affect how fear, anxiety or stress influence decision making, especially under conditions of risk or economic uncertainty.

4. “Anterior cingulate cortex”:

   - Evaluates the conflict between options and is involved in decision making when there is uncertainty or when economic dilemmas arise. Neurons here help monitor errors and adjust strategies when results are not as expected.

5. “Dopamine and neurotransmitters”:

   - Dopamine, a neurotransmitter produced in various parts of the brain, is crucial in signaling reward and punishment. Dopaminergic neurons influence how the brain predicts the future value of financial rewards.

   - Other substances such as serotonin and norepinephrine also affect economic behavior by modulating emotions such as optimism or aggressiveness.

Example in financial decision making:

When a person decides whether to invest in bonds or stocks, their brain performs a series of calculations to evaluate the risks (potential losses) and rewards (possible gains). Neurons in the prefrontal cortex weigh long-term risk, while neurons in the nucleus accumbens can nudge toward a quick decision if short-term gains seem attractive. The interaction between these areas determines whether the individual makes a more rational or emotional decision.

This type of study is also related to your interest in cognitive dissonance and investor sentiment, since emotions and risk perception affect how neurons process information and economic decisions.

THE ACTION POTENTIAL

The “action potential” is a rapid and temporary change in voltage across the membrane of a neuron, which allows the transmission of an electrical signal along the axon. It is the fundamental process by which neurons communicate and transmit information.

Action potential process:

1. “Standby state”:

   - The neuron has a negative electrical charge inside with respect to the outside, generally around -70 mV. This is due to the distribution of ions, mainly sodium (Na⁺) and potassium (K⁺), across the membrane.

   - In this state, sodium channels are closed, while some potassium channels are open, allowing balance to be maintained.

2. “Depolarization”:

   - When the neuron receives a strong enough stimulus, sodium (Na⁺) channels in the membrane open, allowing sodium ions to quickly enter the cell.

   - This causes the inside of the cell to momentarily become positive, resulting in a change in voltage (from -70 mV to more positive values, such as +30 mV).

3. “Peak action potential”:

   - As more sodium channels open and more sodium ions enter, the peak of the action potential is reached. This is the point where the voltage inside the neuron is most positive.

4. “Repolarization”:

   - After the peak of the action potential, sodium channels close and potassium (K⁺) channels open, allowing potassium ions to leave the cell.

   - This causes the cell to return to a more negative state, restoring the internal voltage of the neuron.

5. “Hyperpolarization”:

   - Sometimes potassium efflux is so abundant that the membrane voltage becomes more negative than the initial resting state (less than -70 mV). This is called hyperpolarization.

   - During this period, the neuron is less likely to fire another action potential.

6. “Restoring the rest state”:

   - Finally, the sodium-potassium pump, a protein in the cell membrane, restores the original balance of ions, pumping sodium out of the cell and potassium back in.

   - This returns the neuron to its “resting state” and prepares it for a new action potential if another stimulus is presented.

The action potential is essential for neural communication and allows electrical signals to travel long distances within the nervous system, facilitating functions such as movement, thinking, perception and decision making.

TO SUM UP

The relationship between neurons and the economy, studied through “Neuroeconomics”, demonstrates that economic decisions are not purely rational, but are deeply influenced by neural processes that involve emotions, rewards, risks and previous experiences. Various brain areas, such as the prefrontal cortex, nucleus accumbens and amygdala, act together to evaluate options, manage uncertainty and determine our actions in the face of economic incentives. Thus, neural activity underlies how people weigh options, take risks, react to financial success or failure, and adjust their decisions in complex markets. Neuroeconomics, by integrating economic behavior with the biology of the brain, allows us to better understand how emotional and cognitive factors impact the decision-making process in real economic scenarios.

BIBLIOGRAFY

1. “"Neuroeconomics: Decision Making and the Brain"“ - Paul W. Glimcher, Colin Camerer, Ernst Fehr, y Russell A. Poldrack

2. “"The Mind Within the Brain: How We Make Decisions and How Those Decisions Go Wrong"“ - A. David Redish

3. “"The Neural Basis of Decision Making"“ - Oshin Vartanian y David R. Mandel

4. “"The Winner's Curse: Paradoxes and Anomalies of Economic Life"“ - Richard H. Thaler

5. “Neuropsychonomica“ - Jyotirmaya Satpathy, Sebastián Laza

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