When the housing market crashed in late 2008, most people were surprised by the sudden collapse. John Coates was not among them. He had spent 12 years trading derivatives for New York’s biggest banks—and had left finance for neuroscience, studying what happens in the brains of traders who put billions of dollars on the line in risky financial decisions. Coates, who now studies neuroscience and behavioral economics at the University of Cambridge, has made the London stock market his laboratory. His experiments seem to show that a trader’s success may be determined not by his wits but by the hormones that course through his brain. Hormone-fueled decision making can have powerful effects, intensifying market booms and busts and destabilizing the economy, Coates suggests. The markets’ operations are determined by legions of young men governed by confidence-boosting testosterone and the stress-related hormone cortisol. When hormones spiral out of control, economic behavior can do so as well.
How did you get inside the heads of the people working in the financial markets?
In our first experiment, we were on a trading floor in London with 250 traders, of which only three were women; the average age was maybe 28. They traded in and out very quickly, which means they would hold positions for minutes or even seconds. They would spot a price anomaly and jump on it, then quickly unwind. And they would make trades of huge value —$1 billion or $2 billion at a crack. We wanted to find out what was going on in the brains and bodies of these men who were taking such huge risks. So we collected saliva samples from the traders to measure their levels of testosterone and cortisol in the morning and the afternoon, bracketing the bulk of the day’s trading. Our hypothesis was that when traders had above-average testosterone their profits would go up, and in fact that’s exactly what we saw. It turned out that their morning testosterone levels were actually predicting their afternoon profits...
The brain is a castle on a hill. Encased in bone and protected by a special layer of cells, it is shielded from infections and injuries—but also from many pharmaceuticals and even from the body’s own immune defenses. As a result, brain problems are tough to diagnose and to treat.
To meet this challenge, researchers are exploring unconventional therapies, from electrodes to laser-light stimulation to mind-bending drugs. Some of these radical experiments may never pan out. But, as frequently happens in medicine, a few of today’s improbable approaches may evolve into tomorrow’s miraculous cures.
1. Man Meets Machine
In a sense, cyborgs already walk among us: Nearly 200,000 deaf or near-deaf people have cochlear implants, electronic sound-processing machines that stimulate the auditory nerve and link into the brain. But even by the fanciful science fiction definition, the age of cyborgs is just around the corner. In the last decade, researchers have become increasingly skilled at detecting and interpreting brain signals. Technologies that allow people to use their thoughts to control machines—computers, speaking devices, or prosthetic limbs—are already being tested and could soon be available for widespread applications...
Image: iStockphoto
This month’s column is a tale of two rats. One rat got lots of attention from its mother when it was young; she licked its fur many times a day. The other rat had a different experience. Its mother hardly licked its fur at all. The two rats grew up and turned out to be very different. The neglected rat was easily startled by noises. It was reluctant to explore new places. When it experienced stress, it churned out lots of hormones. Meanwhile, the rat that had gotten more attention from its mother was not so easily startled, was more curious, and did not suffer surges of stress hormones.
The same basic tale has repeated itself hundreds of times in a number of labs. The experiences rats had when they were young altered their behavior as adults. We all intuit that this holds true for people, too, if you replace fur-licking with school, television, family troubles, and all the other experiences that children have. But there’s a major puzzle lurking underneath this seemingly obvious fact of life. Our brains develop according to a recipe encoded in our genes. Each of our brain cells contains the same set of genes we were born with and uses those genes to build proteins and other molecules throughout its life. The sequence of DNA in those genes is pretty much fixed. For experiences to produce long-term changes in how we behave, they must be somehow able to reach into our brains and alter how those genes work.
Neuroscientists are now mapping that mechanism. Our experiences don’t actually rewrite the genes in our brains, it seems, but they can do something almost as powerful. Glued to our DNA are thousands of molecules that shut some genes off and allow other genes to be active. Our experiences can physically rearrange the pattern of those switches and, in the process, change the way our brain cells work. This research has a truly exciting implication: It may be possible to rearrange that pattern ourselves and thereby relieve people of psychiatric disorders like severe anxiety and depression. In fact, scientists are already easing those symptoms in mice.
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