That in itself is a type of intelligence though. A pattern occurs to the subconscious way before conscious awareness. And pattern recognition has been argued as vital to the mind.
“At some point during the 50 trading periods of each session, a price bubble would invariably form and crash. The scientists had suspected that crowd cognition would result in some bubble formation, though they had not expected it to happen every time.
What surprised the scientists even more were the distinctive brain activity patterns that emerged among the low earners and high earners.
Traders who bought more aggressively based on activity in one brain region, the nucleus accumbens, earned less.
In contrast, the high earners seemed to ignore nucleus accumbens activity in favor of the anterior insular cortex, a brain area active during bodily discomfort and unpleasant emotional states. [I’d bet money they were called pessimists by the idiots]
Just before a bubble peaked – as their brain scans were revealing an increased activity in the anterior insula – the high earners would begin to sell their shares.
The scientists believe the high earners’ brain activity may represent a neural early warning signal of an impending crash.
“It’s notoriously hard to identify stock market bubbles and predict crashes by tracking price fluctuations alone,” said Colin Camerer, a behavioral economist at Caltech and the study’s other senior author. “This experimental method is ideal for understanding the neuropsychology of bubble formation, because we can control the fundamental values and use both prices and brain activity to figure out why bubbles form and crash.”
The model may also shed light on other contexts in which groups – and individuals – overvalue something, Montague said.
“This neurobehavioral metric could be used to help quantify situations in which people place excessive value on poor choices, such as drug addiction, compulsive gambling, or overeating,” he said. [promiscuity, suicidal politics]
Montague, who also directs the Virginia Tech Carilion Research Institute’s Computational Psychiatry Unit, plans to explore the promise of mindfulness training in moderating one’s own brain activity, as well as research into real-world applications, including stock markets.
“The brain can provide us with valuable information about what someone may be perceiving about the market and what they’re likely to do next,” Montague said. “That gut feeling the high earners had? It was all in their heads.””