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Strategies & Market Trends : Stock Attack II - A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Susan G who wrote (32793)	3/21/2002 9:59:37 PM
From: 1podstock	Respond to of 52237

Susan G...thank you for posting that information. eom

To: Susan G who wrote (32793)	3/22/2002 9:19:36 AM
From: j g cordes	Read Replies (1) \| Respond to of 52237

To All read this.. may explain that urge to double up on a losing position.. " Brain Rushes to Judgement in Gambling, Study Shows Thu Mar 21, 3:18 PM ET By Maggie Fox, Health and Science Correspondent WASHINGTON (Reuters) - Lose five cents, lose 25 cents -- it's all the same to the brain, which decides in just a quarter second whether a gamble has won or lost, researchers said on Thursday. And if the gambler loses, the brain seems hard-wired to make a riskier bet in the next few seconds, the researchers at the University of Michigan found. "The findings suggest that in many situations our brains rush to judgement," psychologist William Gehring, who led the study, said in a statement. "They rapidly evaluate whether events are good or bad, and this judgement influences how we react," he added. "The assumption of economists has long been that people are pretty rational. It's not the case. ... After a loss, the brain thinks it's due for a win." Writing in this week's issue of the journal Science, Gehring and graduate student Adrian Willoughby said they saw a burst of brain cell activity within 265 milliseconds after a volunteer saw the results of a gamble. They wired 12 volunteers, six men and six women, with caps studded with electrodes. Their experiment measured electrical activity known as event-related brain potentials (ERPs). The 12 volunteers were asked to choose one of two numbers, five or 25, and they made a bet of the corresponding amount of money -- five cents or 25 cents. To reinforce the feeling of gambling, the researchers put cash on the table. A second after the volunteers chose a number, the background on a computer screen changed to green for a win and red for a loss. A few seconds later subjects were given another bet to make. BRAIN ACTIVITY PEAKED IN MILLISECONDS Gehring and Willoughby saw a pattern of electrical activity that peaked 265 milliseconds, a quarter of a second, after the screen flashed red or green. The activity originated in the medial frontal cortex, in or near the anterior cingulate cortex, which is deep in the brain behind the upper part of the forehead. "There are a number of theories about what the anterior cingulate cortex (ACC) does and one aim of our paper was to try to test different theories," Gehring said in a phone interview. "One idea is that it is involved in detecting when people make errors. Our paper was to some degree evidence against this theory." This is because the experiment was set up to try and make the volunteers attempt to win as much money as possible. Theoretically, anyway, winning five cents should have been seen as an error when 25 cents could have been bet and won. But the brain did not see it that way, Gehring found. "It's sort of black and white," he said. "In cases where people failed to take the largest of two possible gains, we didn't see any (excess) activity in the ACC. It is always when there is a loss, even when the loss is the best it could have been. The brain didn't care whether it was five or 25. It said 'that's a loss'." It could be the quick reaction in this part of the brain is in fact a trouble-detector, Gehring said. This would make sense -- someone walking along a cliff had better be able to detect quickly that the ground is crumbling underneath. The study has implications for understanding all sorts of decision making, especially in people who have to make quick choices, such as pilots and firefighters. Gehring said a possibly troubling aspect is the tendency to take a bigger gamble after a mistake has been made. "We are interested in what happens in real-life decisions," he said. "One goal is to bring people in who make real-life financial decisions, like people who trade securities." Jim