Finally, an explanation for The Donald
Category: Science, Nature & Medicine...
Posted Thursday, July 21, 2005 at 04:37 PM [GMT-6]

A study conducted conducted by a team of researchers from Carnegie Mellon University, the Stanford Graduate School of Business and the University of Iowa suggests that people who have an impaired ability to experience emotions due to brain damage often make better financial decisions...and more money.

According to a report in today's Wall Street Journal, good investors may actually possess what's known as a "functional psychopathy."

Some neuroscientists believe good investors may be exceptionally skilled at suppressing emotional reactions. "It's possible that people who are high-risk takers or good investors may have what you call a functional psychopathy," says Antoine Bechara, an associate professor of neurology at the University of Iowa, and a co-author of the study. "They don't react emotionally to things. Good investors can learn to control their emotions in certain ways to become like those people."

But, before you rush out to get a lobotomy so you can start earning the big bucks in the stock market or at the WSOP, you might want to consider this:

Yet emotions may play a useful role in financial decision making. While the brain-damaged players did well in the specific game in the study, they didn't generally perform well when it came to making financial decisions in the real world. Three of four of the brain-damaged players had experienced personal bankruptcy. Their inability to experience fear led to risk-seeking behavior, and their lack of emotional judgment sometimes led them to get tangled up with people who took advantage of them. Their life experience suggests emotions can play an important role in protecting our interests, even if they sometimes interfere with rational decision making.

There's always a catch, isn't there?

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Comments

Brain damage eh?

By anyone's measurements then, I should be a wealthy man.

Posted by: Wallace-Midland, Texas at July 21, 2005 09:45 PM

Ah, but you are! (Wealthy, not brain damaged.)

At least, in the things that count.

Posted by: Eric at July 21, 2005 10:35 PM
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