As the Economist reports, behavioral economics in on the rise.  After almost a century of mathematical obsession, economists have finally started to accept their emotional roots.  Last year, Daniel Kahneman and Vernon Smith received the Nobel Prize in economics for revealing that emotions drive most decisions made under conditions of risk or uncertainty.

So, what decisions are made with total certainty?  None, really.  Clearly emotions influence economic decisions, a fact we've known for hundreds of years, but seem to have forgotten for a while.

The Philosopher Thomas Hobbes (1588-1679) was one of the first to describe how pain and pleasure were primary drivers of economic life back in the mid-1600s.  Throughout his writings Hobbes tended to stress the role of pleasure as the prime mover in human action, describing the “future hunger” for pleasure as the primary determinant in human behavior.

Taking the view that pain, not pleasure, is the prime motivator of human action, the influential political economist John Locke (1632-1704) spent many years detailing how pain drove individuals and states to action.  Starting with his second edition of the Essay on Human Understanding (1694), Locke described an “uneasiness” that spurs humans and governments to action.

But, thanks to Kahneman's and Smith's work the field of behavioral economics was re-born. 

Looking forward, the next set of interesting questions will focus around how the use of emoticeuticals, which enable people to influence/control their emotional state, will impact individual and collective decisions? How different will our decisions be when 5-10% of humanity intentionally chooses to increase their ability to love?  How could increasing our capacity to laugh influence decisions?  How will these tools change the way we look and feel?

Clearly, behavioral economics and its newest child, neuroeconomics, have very bright futures.