Your Mind During Investing
Neuroeconomics
Keep an emotional journal
Think twice
Avoid the herd
Be patient
Don't get distracted
Stop kicking yourself
Control what is controllable
Don't invest in the heat of the moment
Isolate your "mad money"
Only invest a fixed amount
Make as few decisions as possible to avoid emotional decisions
Set up procedures and rules and follow them
Jason Zwieg, Your Money, Your Mind
http://online.wsj.com/article/SB119194438786053486.html
SCIENCE JOURNAL
By ROBERT LEE HOTZ
Charting the Agony
Of a Brain as It
Struggles to Be Fair
October 12, 2007; Page B1
At the Canaan Children's Home in southern Uganda, the orphans had no idea that a woman inside a brain scanner
9,400 miles away was playing mind games with their food.
The children were the focus of a brain experiment under way at the California Institute of Technology to explore the
neural anatomy of indecision. With the push of a button, the woman in the Caltech scanner could distribute meals at the
orphanage more fairly, but only by taking food off the table, not by serving more portions.
While she pondered, the 12-ton fMRI scanner at the university's brain-imaging center traced the synaptic patterns of
equity, remorse and reward in her brain. In these riptides of neural currents, the researchers sought clues to human
variables missing from the mathematics of conventional economics.
NEUROECONOMICS AND DECISIONS
[forum]
Ever wonder why you make such bad investment decisions? What happens in your head when logic and rationality take
a backseat? Share your thoughts with Robert Lee Hotz and other readers on the Science forum.
The quirky experiment exemplifies the new field of neuroeconomics. Behavioral economist Ming Hsu and his Caltech
colleagues combined financial-decision theories and medical brain-imaging tools to analyze the brain as a living engine
of economics, one fine-tuned by evolution through eons of foraging for scarce resources. These scientists studied hard
choices, documenting how competing networks of neurons unconsciously shape the way we buy, sell, risk and trust.
During this test, the scientists wanted to see how synapses valued fairness against the desire to avoid harming others.
The dilemma can arise when a limited resource is distributed unequally, and the only way to help one person comes at
another's expense -- whether in profit sharing, setting affirmative-action policy, or rationing health care.
In the summer of 2006, when they organized the test, Dr. Hsu and his colleagues could imagine no more agonizing
choice, within the constraints of medical ethics, than to ask people to take food away from orphans in a war-torn African
country.
An online search led them to the Web site for the Canaan Children's Home, a one-story green building with a clinic next
door, set amid the trees and chicken coops a half hour's drive from Jinja, Uganda. As of April, 100 children were living
there, many of them orphaned by AIDS, said Frank P. Crane in Richmond, Va., chairman of the Uganda Missions Action
Committee, which monitors the home's finances.
It was the winsome faces of those children -- whose photographs had been posted on the Web site to solicit charitable
donations -- that caught Dr. Hsu's science eye. Here was the perfect experimental device for stirring the turmoil of
indecision, the researchers agreed.
The team next contacted Tom Roberts, an attorney in Richmond, who created the Web site. He gave consent for the
photos to be used. Because there would be no contact with the children and no actual consequences of the experiment
to the orphanage, "I said help yourself," Mr. Roberts recalled.
Dr. Hsu wanted the pictures to heighten the realism of the experiment.
In the scanner, each volunteer could equalize how a fixed amount of donated meals was shared between orphans -- but
only by taking away meals from those who had more than others and thereby reducing the total number of meals given
to the orphanage. The allocation of meals was sometimes fair, sometimes not. "We manipulated the allocations and how
much could be taken away," Dr. Hsu said.
To trigger the brain behavior, the 26 volunteers had to believe their decisions really would affect orphans being denied
their seat at a groaning board of plenty where others feasted. So, the experimenters made them all study a 10-page
brochure with pictures of 60 orphans.
In 36 rounds of testing, each subject had 10 seconds to choose the lesser of two evils: Allow some children to keep
more than their fair share of meals or take away their food to eliminate inequity.
It was a measure of the economics of morality. Dr. Hsu made the inequities more or less severe by changing the
number of meals donated to different groups of children. That provoked patterns of neural activation that revealed the
brain's distaste for injustice and its willingness if the disparity was wide enough -- in one case, one child receiving five
times more than another -- to punish the rich by putting them on short rations. To redress the extremes, people were
willing to confiscate meals even when it hurt the orphanage as a whole, Dr. Hsu, now at the University of Illinois,
reported recently at a meeting of the Society for Neuroeconomics in Nantasket, Mass.
As a test of economic theory against the benchmark of the brain, the Uganda experiment is one subtle brushstroke in
an emerging self-portrait of the mind, generated by floods of new brain data. Indeed, neuroeconomics itself is still so
new that cultural anthropologists from the Massachusetts Institute of Technology and New York University are
documenting the folkways of this nascent network of scholars.
"The payout for this in economics may not come for 20 years," said University of Zurich economist Ernst Fehr.
"Economics is a slow science."
http://www.livescience.com/technology/071002-mindreading-computer.html
Computer to Read Minds
By Lamont Wood, Special to LiveScience
posted: 02 October 2007 08:45 am ET
Share this story
Email They're already predicting, mathematically, what you'll want to watch, what you'll want to wear, and who you'll want
to vote for. Obviously, the next step is for computers to read your mind—and that's just what they're working toward at
Tufts University in Boston.
Your computer won't be picking up details about your plans for the evening anytime soon. But researchers with the
Human Computer Interaction group at Tufts have, thanks to a $450,000 grant from the National Science Foundation,
come up with a straightforward way for your computer to tell if you are overworked, under-worked or not working at all,
according to a paper they will present next week at an Association of Computing Machinery symposium.
That may not sound like penetrating perception, but the researchers hope that capacity will eventually help them gain
real-time insight into the brain's more subtle emotional states and help provide pointers about how we can get work
done more efficiently.
Futuristic headband
The mind reading actually involves measuring the volume and oxygen level of the blood around the subject's brain,
using technology called functional near-infrared spectroscopy (fNIRS).
The user wears a sort of futuristic headband that sends light in that spectrum into the tissues of the head where it is
absorbed by active, blood-filled tissues. The headband then measures how much light was not absorbed, letting the
computer gauge the metabolic demands that the brain is making.
The results are often compared to an MRI, but can be gathered with lightweight, non-invasive equipment.
Detecting overwork
Wearing the fNIRS sensor, experimental subjects were asked to count the number of squares on a rotating onscreen
cube and to perform other tasks. The subjects were then asked to rate the difficulty of the tasks, and their ratings
agreed with the work intensity detected by the fNIRS system up to 83 percent of the time.
"We don't know how specific we can be about identifying users' different emotional states," cautioned Sergio Fantini, a
biomedical engineering professor at Tufts. "However, the particular area of the brain where the blood-flow change
occurs should provide indications of the brain's metabolic changes and by extension workload, which could be a proxy
for emotions like frustration."
New evaluation techniques that monitor user experiences while working with computers are increasingly necessary,
because a user may be bored one moment and overwhelmed the next, said Robert Jacob, a computer science
professor at Tufts who is also involved in the research.
"Measuring mental workload, frustration and distraction is typically limited to qualitatively observing computer users or
to administering surveys after completion of a task, potentially missing valuable insight into the users' changing
experiences," Jacob said.
http://www.livescience.com/health/051222_mental_brain.html
Scientists Predict What You'll Think of Next
By Ker Than, LiveScience Staff Writer
posted: 22 December 2005 02:00 pm ET
Share this story
Email To recall memories, your brain travels back in time via the ultimate Google search, according to a new study in
which scientists found they can monitor the activity and actually predict what you'll think of next.
The work bolsters the validity of a longstanding hypothesis that the human brain takes itself back to the state it was in
when a memory was first formed.
The psychologist Endel Tulving dubbed this process "mental time travel."
How it works
Researchers analyzed brain scans of people as the test subjects watched pictures on a computer screen. The images
were divided into three categories: celebrities like Jack Nicholson and Halle Berry, places like the Taj Mahal and the
Grand Canyon, and everyday objects like tweezers and a pocket mirror.
To make sure the subjects were paying attention, they were asked a question about each image as it came up, like
whether they liked a certain celebrity, how much they wanted to visit a certain place or how often they used a certain
object.
Later, without any images and while their brains were still being scanned, the subjects were asked to recall as many of
the images as they could.
The researchers found that the patterns of brain activity associated with each picture "reinstated" themselves seconds
before the people could verbally recall the memories. On average, the time between beginning brain activity associated
with the memory and the subjects verbally stating the memory was about 5.4 seconds.
"When you have an experience, that experience is represented as a pattern of cortical activity," explained Sean Polyn,
a postdoctoral researcher at the University of Pennsylvania and leader of the study. "The memory system, which we
think lives in the hippocampus, forms a sort of summary representation of everything that's going on in your cortex."
Googling your brain
The process can be compared to the way web crawlers work to browse and catalogue web pages on the Internet. Web
crawlers are automated programs that create copies of all visited pages. Search engines like Google then tag and
index the pages.
In the same way, as we're trying to remember something, our brains dredge up the memory by first recalling a piece of
it, scientists say.
When trying to remember a face you saw recently, for example, you might first think broadly about faces and then
narrow your search from there, enlisting new details as you go, Polyn explained. It's like adding more and more specific
keywords to a Google search, until finally you find what you want.
Scientists call this process "contextual reinstatement."
"The memories that came up would be hits and the ones that most match your queries would be the ones that came up
first," Polyn told LiveScience.
Reading your mind
The researchers were even able to do a little mind-reading by watching the search in progress.
By comparing the brain scans of the subjects while they tried to remember the images they'd seen with those collected
when they first viewed the images, the researchers were able to correctly conclude whether the people were going to
remember a celebrity, place or object.
"We can see some evidence of what category the subject is trying to recall before they even say anything, so we think
we're visualizing the search process itself," Polyn said.
A similar mind-reading effort was announced earlier this year, when researchers found they could predict where a
patient would move his hand based on brain activity the instant prior.
Scientists think that contextual reinstatement is unique to memories that involve personal experiences, so-called
"episodic" memories, but that similar processes might be at work in other forms of memory.
The study was detailed in the Dec. 23 issue of the journal Science.
Next
Neuroeconomics
Keep an emotional journal
Think twice
Avoid the herd
Be patient
Don't get distracted
Stop kicking yourself
Control what is controllable
Don't invest in the heat of the moment
Isolate your "mad money"
Only invest a fixed amount
Make as few decisions as possible to avoid emotional decisions
Set up procedures and rules and follow them
Jason Zwieg, Your Money, Your Mind
http://online.wsj.com/article/SB119194438786053486.html
SCIENCE JOURNAL
By ROBERT LEE HOTZ
Charting the Agony
Of a Brain as It
Struggles to Be Fair
October 12, 2007; Page B1
At the Canaan Children's Home in southern Uganda, the orphans had no idea that a woman inside a brain scanner
9,400 miles away was playing mind games with their food.
The children were the focus of a brain experiment under way at the California Institute of Technology to explore the
neural anatomy of indecision. With the push of a button, the woman in the Caltech scanner could distribute meals at the
orphanage more fairly, but only by taking food off the table, not by serving more portions.
While she pondered, the 12-ton fMRI scanner at the university's brain-imaging center traced the synaptic patterns of
equity, remorse and reward in her brain. In these riptides of neural currents, the researchers sought clues to human
variables missing from the mathematics of conventional economics.
NEUROECONOMICS AND DECISIONS
[forum]
Ever wonder why you make such bad investment decisions? What happens in your head when logic and rationality take
a backseat? Share your thoughts with Robert Lee Hotz and other readers on the Science forum.
The quirky experiment exemplifies the new field of neuroeconomics. Behavioral economist Ming Hsu and his Caltech
colleagues combined financial-decision theories and medical brain-imaging tools to analyze the brain as a living engine
of economics, one fine-tuned by evolution through eons of foraging for scarce resources. These scientists studied hard
choices, documenting how competing networks of neurons unconsciously shape the way we buy, sell, risk and trust.
During this test, the scientists wanted to see how synapses valued fairness against the desire to avoid harming others.
The dilemma can arise when a limited resource is distributed unequally, and the only way to help one person comes at
another's expense -- whether in profit sharing, setting affirmative-action policy, or rationing health care.
In the summer of 2006, when they organized the test, Dr. Hsu and his colleagues could imagine no more agonizing
choice, within the constraints of medical ethics, than to ask people to take food away from orphans in a war-torn African
country.
An online search led them to the Web site for the Canaan Children's Home, a one-story green building with a clinic next
door, set amid the trees and chicken coops a half hour's drive from Jinja, Uganda. As of April, 100 children were living
there, many of them orphaned by AIDS, said Frank P. Crane in Richmond, Va., chairman of the Uganda Missions Action
Committee, which monitors the home's finances.
It was the winsome faces of those children -- whose photographs had been posted on the Web site to solicit charitable
donations -- that caught Dr. Hsu's science eye. Here was the perfect experimental device for stirring the turmoil of
indecision, the researchers agreed.
The team next contacted Tom Roberts, an attorney in Richmond, who created the Web site. He gave consent for the
photos to be used. Because there would be no contact with the children and no actual consequences of the experiment
to the orphanage, "I said help yourself," Mr. Roberts recalled.
Dr. Hsu wanted the pictures to heighten the realism of the experiment.
In the scanner, each volunteer could equalize how a fixed amount of donated meals was shared between orphans -- but
only by taking away meals from those who had more than others and thereby reducing the total number of meals given
to the orphanage. The allocation of meals was sometimes fair, sometimes not. "We manipulated the allocations and how
much could be taken away," Dr. Hsu said.
To trigger the brain behavior, the 26 volunteers had to believe their decisions really would affect orphans being denied
their seat at a groaning board of plenty where others feasted. So, the experimenters made them all study a 10-page
brochure with pictures of 60 orphans.
In 36 rounds of testing, each subject had 10 seconds to choose the lesser of two evils: Allow some children to keep
more than their fair share of meals or take away their food to eliminate inequity.
It was a measure of the economics of morality. Dr. Hsu made the inequities more or less severe by changing the
number of meals donated to different groups of children. That provoked patterns of neural activation that revealed the
brain's distaste for injustice and its willingness if the disparity was wide enough -- in one case, one child receiving five
times more than another -- to punish the rich by putting them on short rations. To redress the extremes, people were
willing to confiscate meals even when it hurt the orphanage as a whole, Dr. Hsu, now at the University of Illinois,
reported recently at a meeting of the Society for Neuroeconomics in Nantasket, Mass.
As a test of economic theory against the benchmark of the brain, the Uganda experiment is one subtle brushstroke in
an emerging self-portrait of the mind, generated by floods of new brain data. Indeed, neuroeconomics itself is still so
new that cultural anthropologists from the Massachusetts Institute of Technology and New York University are
documenting the folkways of this nascent network of scholars.
"The payout for this in economics may not come for 20 years," said University of Zurich economist Ernst Fehr.
"Economics is a slow science."
http://www.livescience.com/technology/071002-mindreading-computer.html
Computer to Read Minds
By Lamont Wood, Special to LiveScience
posted: 02 October 2007 08:45 am ET
Share this story
Email They're already predicting, mathematically, what you'll want to watch, what you'll want to wear, and who you'll want
to vote for. Obviously, the next step is for computers to read your mind—and that's just what they're working toward at
Tufts University in Boston.
Your computer won't be picking up details about your plans for the evening anytime soon. But researchers with the
Human Computer Interaction group at Tufts have, thanks to a $450,000 grant from the National Science Foundation,
come up with a straightforward way for your computer to tell if you are overworked, under-worked or not working at all,
according to a paper they will present next week at an Association of Computing Machinery symposium.
That may not sound like penetrating perception, but the researchers hope that capacity will eventually help them gain
real-time insight into the brain's more subtle emotional states and help provide pointers about how we can get work
done more efficiently.
Futuristic headband
The mind reading actually involves measuring the volume and oxygen level of the blood around the subject's brain,
using technology called functional near-infrared spectroscopy (fNIRS).
The user wears a sort of futuristic headband that sends light in that spectrum into the tissues of the head where it is
absorbed by active, blood-filled tissues. The headband then measures how much light was not absorbed, letting the
computer gauge the metabolic demands that the brain is making.
The results are often compared to an MRI, but can be gathered with lightweight, non-invasive equipment.
Detecting overwork
Wearing the fNIRS sensor, experimental subjects were asked to count the number of squares on a rotating onscreen
cube and to perform other tasks. The subjects were then asked to rate the difficulty of the tasks, and their ratings
agreed with the work intensity detected by the fNIRS system up to 83 percent of the time.
"We don't know how specific we can be about identifying users' different emotional states," cautioned Sergio Fantini, a
biomedical engineering professor at Tufts. "However, the particular area of the brain where the blood-flow change
occurs should provide indications of the brain's metabolic changes and by extension workload, which could be a proxy
for emotions like frustration."
New evaluation techniques that monitor user experiences while working with computers are increasingly necessary,
because a user may be bored one moment and overwhelmed the next, said Robert Jacob, a computer science
professor at Tufts who is also involved in the research.
"Measuring mental workload, frustration and distraction is typically limited to qualitatively observing computer users or
to administering surveys after completion of a task, potentially missing valuable insight into the users' changing
experiences," Jacob said.
http://www.livescience.com/health/051222_mental_brain.html
Scientists Predict What You'll Think of Next
By Ker Than, LiveScience Staff Writer
posted: 22 December 2005 02:00 pm ET
Share this story
Email To recall memories, your brain travels back in time via the ultimate Google search, according to a new study in
which scientists found they can monitor the activity and actually predict what you'll think of next.
The work bolsters the validity of a longstanding hypothesis that the human brain takes itself back to the state it was in
when a memory was first formed.
The psychologist Endel Tulving dubbed this process "mental time travel."
How it works
Researchers analyzed brain scans of people as the test subjects watched pictures on a computer screen. The images
were divided into three categories: celebrities like Jack Nicholson and Halle Berry, places like the Taj Mahal and the
Grand Canyon, and everyday objects like tweezers and a pocket mirror.
To make sure the subjects were paying attention, they were asked a question about each image as it came up, like
whether they liked a certain celebrity, how much they wanted to visit a certain place or how often they used a certain
object.
Later, without any images and while their brains were still being scanned, the subjects were asked to recall as many of
the images as they could.
The researchers found that the patterns of brain activity associated with each picture "reinstated" themselves seconds
before the people could verbally recall the memories. On average, the time between beginning brain activity associated
with the memory and the subjects verbally stating the memory was about 5.4 seconds.
"When you have an experience, that experience is represented as a pattern of cortical activity," explained Sean Polyn,
a postdoctoral researcher at the University of Pennsylvania and leader of the study. "The memory system, which we
think lives in the hippocampus, forms a sort of summary representation of everything that's going on in your cortex."
Googling your brain
The process can be compared to the way web crawlers work to browse and catalogue web pages on the Internet. Web
crawlers are automated programs that create copies of all visited pages. Search engines like Google then tag and
index the pages.
In the same way, as we're trying to remember something, our brains dredge up the memory by first recalling a piece of
it, scientists say.
When trying to remember a face you saw recently, for example, you might first think broadly about faces and then
narrow your search from there, enlisting new details as you go, Polyn explained. It's like adding more and more specific
keywords to a Google search, until finally you find what you want.
Scientists call this process "contextual reinstatement."
"The memories that came up would be hits and the ones that most match your queries would be the ones that came up
first," Polyn told LiveScience.
Reading your mind
The researchers were even able to do a little mind-reading by watching the search in progress.
By comparing the brain scans of the subjects while they tried to remember the images they'd seen with those collected
when they first viewed the images, the researchers were able to correctly conclude whether the people were going to
remember a celebrity, place or object.
"We can see some evidence of what category the subject is trying to recall before they even say anything, so we think
we're visualizing the search process itself," Polyn said.
A similar mind-reading effort was announced earlier this year, when researchers found they could predict where a
patient would move his hand based on brain activity the instant prior.
Scientists think that contextual reinstatement is unique to memories that involve personal experiences, so-called
"episodic" memories, but that similar processes might be at work in other forms of memory.
The study was detailed in the Dec. 23 issue of the journal Science.
Next
 | |  | |  | |  |