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NYT: The Biology of Bubble and Crash.

BEG

Senior Member
Messages
1,032
Location
Southeast US
"Understanding the effects of human biology on the markets should profoundly change how we see them, and their pathologies. At the moment, I fear we have the worst of both worlds — an unstable biology coupled with policies that encourage too much risk-taking during bubbles and too little during crashes, as well as a bonus scheme that penalizes prudent risk-taking. Nature and nurture conspire to create recurrent disasters. Risk management needs to dampen these biological waves, not amplify them."

What an interesting article, Ema. Thanks for posting. My thoughts are what if we extended this behavioral/biological phenomina to other professions? The repercussions could be enormous. I noted that the researcher recommended a mixture of women and older men.