{"id":32751,"date":"2013-10-20T10:10:59","date_gmt":"2013-10-20T14:10:59","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=32751"},"modified":"2014-01-12T10:14:31","modified_gmt":"2014-01-12T15:14:31","slug":"your-brain-on-neuroeconomics","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/your-brain-on-neuroeconomics","title":{"rendered":"Your Brain on Neuroeconomics"},"content":{"rendered":"

******One blogger\/trader\/educator who does a wonderful job of sharing research on elite performance and how it relates to trading is David Blair, The Crosshairs Trader. Below is his latest Sunday Links post for the SMB Trading Community. We hope you enjoy!****** \u2014 Editor’s note<\/span><\/p>\n

Neuroeconomics<\/a> is the study of human decision-making. Combining several fields of study from behavioral economics to cognitive and social psychology, neuroeconomics seeks to understand why we make the decisions we make and how best to avoid irrational ones. Neuroeconomic discoveries are of particular interest to investors and traders,\u00a0who, under conditions of extreme uncertainty, must make potential money-making\u00a0decisions on a day-to-day basis. Understanding why we do what we do can provide valuable information for important decisions. Neuroeconomics seeks to provide that information.<\/span><\/p>\n

The following is a list of sources to get you started down the road to better decision-making.\u00a0 <\/span><\/p>\n

Neuroeconomics has its origins in two places: in events following the neoclassical economic revolution of the 1930s, and in the birth of cognitive neuroscience during the 1990s. (History of Neuroeconomics<\/a>) <\/span><\/p>\n

\u201cWhereas psychologists tend to view humans as fallible and sometime even self-destructive, economists tend to view people as efficient maximizers of self-interest who make mistakes only when imperfectly informed about the consequences of their actions.\u201d (Neuroscience News<\/a>) <\/span><\/p>\n

\u201cThe founding principles of neuroeconomics are that the behavioral deviations observed when financial decisions are made have a relevant explanation, and that this explanation involves brain mechanisms.\u201d (ParisTech Review<\/a>) <\/span><\/p>\n

\u201cIf financial decisions and capital markets are driven by rational thinking, then why does the manner in which the crisis developed seem so irrational?\u201d (NCBI<\/a>) <\/span><\/p>\n

\u201cThe hypothesis guiding the study was that the higher a trader\u2019s testosterone levels were at the beginning of the day, the more money he would make.\u201d (Brain Facts<\/a>) <\/span><\/p>\n

\u201cWhat does a stock trader have in common with a cocaine addict anticipating a fix?\u201d (Huffington Post<\/a>) <\/span><\/p>\n

\u201cKahneman and Tversky found that people suffer a higher degree of pain from losing money than they feel pleasure from making money. So they tend to hold on to losing stocks rather than sell and lock in a loss.\u201d (Bloomberg<\/a>) <\/span><\/p>\n

\u201cFindings about the role of optimism in risk-taking, the effects of emotion on decision weights, the role of fear in predictions of harm and the role of liking and disliking in factual predictions all indicate that the traditional separation between belief and preference in analyses of decision-making is psychologically unrealistic.\u201d (Stanford Paper<\/a>) <\/span><\/p>\n

Books on neuroeconomics:<\/span><\/p>\n

Neuroeconomics and the Brain<\/a> edited by Paul Glimcher et al.
\nPredictably Irrational<\/a> by Dan Ariely
\nYour Money and Your Brain<\/a> by Jason Zweig
\nYou Are Not So Smart<\/a> by David McRaney
\nInvesting and The Irrational Mind<\/a>\u00a0by Robert Koppel <\/span><\/p>\n

Now, let\u2019s go and make better decisions. <\/span><\/p>\n

David Blair<\/b><\/p>\n

THE CROSSHAIRS TRADER
\n<\/b>www.thecrosshairstrader.com<\/a>
\nhttp:\/\/www.thecrosshairstrader.com\/crosshairs-blog\/<\/a><\/p>\n

Related blog posts:
\nEnhancing Performance With Bias Awareness<\/a>
\nAsk the Trading Doc: How Do I Take on More Risk?<\/a><\/p>\n

No relevant positions<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

******One blogger\/trader\/educator who does a wonderful job of sharing research on elite performance and how it relates to trading is David Blair, The Crosshairs Trader. Below is his latest Sunday Links post for the SMB Trading Community. We hope you enjoy!****** \u2014 Editor’s note Neuroeconomics is the study of human decision-making. Combining several fields of study from behavioral economics to … Read More<\/a><\/p>\n","protected":false},"author":1042,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1935,1,1532,455],"tags":[3442,894,2466,3485,3469,3482,1453,207],"class_list":["post-32751","post","type-post","status-publish","format-standard","hentry","category-david-blair","category-general-comments-2","category-guest-blog","category-trading_psychology","tag-awareness","tag-bias","tag-brain","tag-cognitive-psychology","tag-enhancing-performance","tag-neuroeconomics","tag-psychology","tag-trading-stocks","no-post-thumbnail"],"yoast_head":"\nYour Brain on Neuroeconomics | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/your-brain-on-neuroeconomics\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Your Brain on Neuroeconomics | SMB Training\" \/>\n<meta property=\"og:description\" content=\"******One blogger\/trader\/educator who does a wonderful job of sharing research on elite performance and how it relates to trading is David Blair, The Crosshairs Trader. 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