HR Strange But True!
September 23, 2005

New research suggests that "functional psychopaths" make the best financial traders.

More specifically, the emotionally impaired seem more willing to gamble for high stakes. And it appears that people with brain damage can still make good financial decisions.

The conclusions appear in the journal Psychological Science, in an article prepared by a team of scientists from Stanford University, Carnegie Mellon University, and the University of Iowa.

In their study, the scientists set up a simple investment game for 41 people. All had normal IQs, but 15 had lesions on the areas of the brain that affect emotions.

The results: Those with brain damage outperformed those without.

The scientists found that emotions led some in the group to avoid taking risks, even when the potential benefits far outweighed the losses. It's a phenomenon known as myopic loss aversion.

One of the researchers, Baba Shiv of Stanford Graduate School of Business, said the trait may be common in many company chiefs and top lawyers.

"Emotions serve an adaptive role in speeding up the decision-making process," Shiv said. "However, there are circumstances in which a naturally occurring emotional response must be inhibited, so that a deliberate and potentially wiser decision can be made."

Source: Reuters news agency, via Excite

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