Economic bubbles occur when investors trade assets at prices much higher than their actual values. Now Caltech researchers may have uncovered the neurological basis behind such seemingly illogical behavior. In economics, price and fundamental value are supposed to be the only two factors needed for making trading decisions. While behavior should be predictable based on those values, this isn’t true in a bubble market. De Martino and colleagues suspected that there is some other type of information that traders use. Based on research in the past decade, the authors believed that an area of the brain located just between the eyebrows, the ventromedial prefrontal cortex, or vmPFC, might be involved. “This area is known to code for any type of subjective value.” \”So people are not only considering price and fundamental value, they’re also taking social signals into account”. De Martino explained that people have the tendency to see intentional patterns everywhere, even when there is no intention behind the pattern.
Giorgio BertiniResearch on society, culture, art, neuroscience, cognition, critical thinking, intelligence, creativity, autopoiesis, self-organization, rhizomes, complexity, systems, networks, leadership, sustainability, thinkers, futures ++
Academic SupportThe Learning Change Project is a personal not for profit and without sponsors multidisciplinary initiative to support academic activities. Use the files freely for your Courses or Research. To prepare Reading Lists explore the Category List or Search for the topic of your interest. If you need any support, contact me.
470 Posts in this BlogFollow my Networks for recent Posts. For authors, date, publishers +metadata, view the source.
- Follow Learning Sciences of Change on WordPress.com
Recent Posts: Learning Art
Learning Community Change
Learning Cultural Change
Learning Philosophy of Change
Learning Political Economy of Change
Learning Research & Change Methods
Learning Sciences of Change
Learning Sustainability of Change
Learning Technologies of Change
- My Tweets