Friday, February 17, 2006

The Australian: Money drives us crazy: it's official [February 09, 2006]

Gee in a week where we spoke of behavioral finance in almost every class I taught, comes this:

The Australian: Money drives us crazy: it's official [February 09, 2006]: "The pleasure of orgasm, the high from cocaine, the rush of buying Google at $US450 a share - the same neural network governs all three, Knutson, 38, concluded. What's more, our primal pleasure circuits can, and often do, override our seat of reason, the brain's frontal cortex, the professor says. In other words, stocks, like sex, sometimes drive us crazy.

Knutson says he knows how heretical his findings are. Wall Street is dedicated to the principle that when it comes to money, logic prevails,"

and then the wrap up from a Nobel Prize winner:
"This controversial field, called neurofinance, may represent the next great frontier on Wall Street, says Daniel Kahneman, who won the 2002 Nobel Prize in economics for his pioneering work in behavioural finance, which fuses classical economic theory and studies of human psychology. "The brain scientists are the wave of the future in the financial world,""

THANKS TO MONEYSCIENCE for pointing this out!

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