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To: RealMuLan who wrote (5410)	9/5/2005 12:23:03 PM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

Thinking of investments sets your mind in motion Unique experiment shows how brain reacts to decisions that could make or lose money MARY MOSZYNSKI TIMES & TRANSCRIPT STAFF Emotions play a key part in people’s everyday decisions on things such as family and marriage but now two researchers have discovered emotions also play a role in how people make investment choices. While the sight of numbers and stock choices can often make a person’s eyes glaze over, the thought of making money and investing for the future means people have to make important decisions regarding investments. And as Camelia Kuhnen, a professor at the Stanford Graduate School of Business, discovered, a person’s subconscious often stops people from making the rational decision. “The big picture question was whether or not emotions play a role in how individuals make financial choices,” she said. In order to determine if emotions can dictate a person’s financial choice Kuhnen, and the paper’s co-author Brian Knutson, had 19 volunteers play a game. During the game each volunteer was given three possible investments: two stocks and a bond. Each volunteer was told they could keep a portion of their profits if they invested well. But if they lost, the money would be taken from their participation fee. During the game each volunteer was hooked up to a MRI (magnetic resonance imaging). Each volunteer was given a good stock with a small chance of loss, a bad stock with a larger chance of loss and a bond that automatically offered a tiny gain. While she expected participants to always choose the good stock, many didn’t, instead choosing to take a large risk or an ultra-conservative decision, said Kuhnen. Because of the MRIs, Kuhnen was able to track the participants’ brain activity while they made their investing decisions. When people chose the riskier stock option their nucleus accumbens were more active, she said. Nucleus accumbens are the part of the brain that encourage people’s desire for rewards. Meanwhile, those who chose the bond had increased activity in the anterior insula, the part of the brain that warns people to stay clear of danger, said Kuhnen. “The question was if you have too much activation in one of these two areas of interest, will it push (you) towards making mistakes?”she said. canadaeast.com