The business brain
Research in the relatively new field of neurofinance by Dr Elise Payzan-LeNestour is showing that the brains of some people may be hard wired for success in finance.
Published on the 02 Oct 2013
The key to survival is the ability to adapt and nowhere is this more critical than in the world of finance. But why do some people cope better than others?
Dr Elise Payzan-LeNestour, a researcher and senior lecturer in finance at the Australian School of Business, has shown that people are actually much better at learning from change than previously thought.
Payzan-LeNestour devised a simple board game in which her subjects – all university students – were asked to allocate money to assets at six locations. Each of the assets produced a different return: a profit, a loss or nothing at all. Importantly, the returns were subject to rapid change.
“The players were pretty sophisticated in their learning abilities, which is at odds with the common belief in behavioural finance,” she says.
Through brain imaging, the researchers also found that a major neurotransmitter called norepinephrine signals to the brain that the world has changed and that relearning and adjustment is required.
“For survival, it’s very important that the brain signals this to you,” Payzan- LeNestour says. “This is the first real piece of evidence for this particular mechanism.”
Read the full story in the latest issue of Uniken.