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Resource Allocation in the Brain

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  • Ricardo Alonso
  • Isabelle Brocas
  • Juan D. Carrillo

Abstract

When an individual performs several tasks simultaneously, processing resources must be allocated to different brain systems to produce energy for neurons to fire. Following the evidence from neuroscience, we model the brain as an organization in which a coordinator allocates limited resources to the brain systems responsible for the different tasks. Systems are privately informed about the amount of resources necessary to perform their task and compete to obtain the resources. The coordinator arbitrates the demands while satisfying the resource constraint. We show that the optimal mechanism is to impose to each system with privately known needs a cap in resources that depends negatively on the amount of resources requested by the other system. This allocation can be implemented using a biologically plausible mechanism. Finally, we provide some implications of our theory: (i) performance can be flawless for sufficiently simple tasks, (ii) the dynamic allocation rule exhibits inertia (current allocations are increasing in past needs), and (iii) different cognitive tasks are performed by different systems only if the tasks are sufficiently important.

Suggested Citation

  • Ricardo Alonso & Isabelle Brocas & Juan D. Carrillo, 2014. "Resource Allocation in the Brain," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(2), pages 501-534.
  • Handle: RePEc:oup:restud:v:81:y:2014:i:2:p:501-534
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    File URL: http://hdl.handle.net/10.1093/restud/rdt043
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    Cited by:

    1. Brocas, Isabelle & Carrillo, Juan D., 2021. "Value computation and modulation: A neuroeconomic theory of self-control as constrained optimization," Journal of Economic Theory, Elsevier, vol. 198(C).
    2. Ryan Webb & Paul W. Glimcher & Kenway Louie, 2021. "The Normalization of Consumer Valuations: Context-Dependent Preferences from Neurobiological Constraints," Management Science, INFORMS, vol. 67(1), pages 93-125, January.
    3. Gerhardt, Holger & Schildberg-Hörisch, Hannah & Willrodt, Jana, 2017. "Does self-control depletion affect risk attitudes?," European Economic Review, Elsevier, vol. 100(C), pages 463-487.
    4. MohammadTaghi Hajiaghayi & Keivan Rezaei & Suho Shin, 2023. "Delegating to Multiple Agents," Papers 2305.03203, arXiv.org, revised May 2023.
    5. Andrew Caplin & Daniel Martin, 2016. "The Dual-Process Drift Diffusion Model: Evidence From Response Times," Economic Inquiry, Western Economic Association International, vol. 54(2), pages 1274-1282, April.
    6. Altmann, Steffen & Grunewald, Andreas & Radbruch, Jonas, 2019. "Passive Choices and Cognitive Spillovers," IZA Discussion Papers 12337, Institute of Labor Economics (IZA).
    7. Siddiqi, Hammad, 2022. "Asset Pricing in the Resource-Constrained Brain," MPRA Paper 120526, University Library of Munich, Germany, revised 05 Feb 2024.
    8. Orlando Gomes, 2014. "Agency relations in the brain: towards an optimal control theory," Economics Bulletin, AccessEcon, vol. 34(4), pages 2179-2189.
    9. Brocas, Isabelle & Carrillo, Juan D., 2020. "Introduction to special issue “Understanding Cognition and Decision Making by Children.” Studying decision-making in children: Challenges and opportunities," Journal of Economic Behavior & Organization, Elsevier, vol. 179(C), pages 777-783.
    10. Siddiqi, Hammad, 2020. "Resource allocation in the brain and the Capital Asset Pricing Model," MPRA Paper 100250, University Library of Munich, Germany.
    11. Hammad, Siddiqi & Austin, Murphy, 2020. "Optimal Resource Allocation in the Brain and the Capital Asset Pricing Model," MPRA Paper 102705, University Library of Munich, Germany.
    12. Siddiqi, Hammad, 2020. "Resource allocation in the brain and the equity premium puzzle," MPRA Paper 100432, University Library of Munich, Germany.
    13. Gan, Tan & Hu, Ju & Weng, Xi, 2023. "Optimal contingent delegation," Journal of Economic Theory, Elsevier, vol. 208(C).
    14. Landry, Peter, 2021. "A behavioral economic theory of cue-induced attention- and task-switching with implications for neurodiversity," Journal of Economic Psychology, Elsevier, vol. 86(C).
    15. Brocas, Isabelle & Carrillo, Juan D., 2014. "Dual-process theories of decision-making: A selective survey," Journal of Economic Psychology, Elsevier, vol. 41(C), pages 45-54.

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    More about this item

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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