SIGNIFICANCE OF NEUROECONOMICS IN MEDIA CORPORATIONS SURVIVAL IN THE AGE OF DIGITALIZATION

Abstract

The three concepts of neuroeconomics, behavioral economics and media economics were briefly examined, as relates to media corporations in the age of digitization and found to be closely related to human behavior mostly at individual level. The three concepts are also theoretically related because they all are concerned with human behavior and choices. There are varieties of theories in studying media economics, a few were examined and found to be relevant to Neuroeconomics, they include Theory of The Firm, The Consumer Theory, Theory of Ruinous Competition and Broadcast Media Concentration. The age of digitization has brought with it proliferation of especially electronic media, especially social media. This implies the traditional understanding of how media corporations operate have changed. It was found that consumption of digital media is rapidly increasing and becoming more personalized to individual behaviors and preferences, therefore neuroeconomics can help explain psychological mechanisms that lead to individual economic decision-making and understanding of media economics. Neuroeconomics , by leveraging on neuroscience, can contribute to understanding consumer habits, social networking and possibly predict choices of media consumers and/or detect consumers or groups that are likely to exhibit problematic behaviors. By using neuroeconomics models, media corporations can understand demand and consumer information, thereby tailoring media products in a way that will increase its value and utility to the consumers and ultimately profitability of the media corporations.