“Emotional arousal” is not something to avoid, but to master. By Elise Payzan Le Nestour

All this suggests that emotions are key information providers when deciding under uncertainty. They make us tuned to our environment. Actually, in some contexts of fast and intuitive decision-making in the face of unstable (high vol) conditions, one expects that the stronger the emotional uncertainty signals of the day-trader, the higher the performance.

By |October 20th, 2009|Emotions & Decisions, French PhD Chick, Risk Decisions, Worth Reading|2 Comments

Risk Psychology & Neuroeconomics Society 2009

Back and rested from a weekend trip to academia –

The annual Society for Neuroeconomics meeting, held in Evanston this year, reviews a cornucopia of pre-publication research papers centered on the topic of decision making under risk and ambiguity. With everything from electrodes being implanted into patients who were having brain surgery for intractable epilepsy to […]

By |September 28th, 2009|Emotion Analytics, French PhD Chick|0 Comments

Having Forgotten to Doubt, “Modern Finance” drove us Insane

Portfolio selection: Let’s exhume the buried man!

In his milestone paper “Portfolio Selection” published in the Journal of Finance in 1952, Harry Markowitz, the pioneer of “modern finance,” recommends to use the Expected return-Variance (E-V) rule, both as a working hypothesis to explain investment behavior and as a guide to “investment” – as distinguished from speculative […]

By |December 8th, 2008|French PhD Chick, Markets|2 Comments

Elise Payzan Le Nestour on “The Brain on Risk”

On The Ubiquitous Missing Information in Markets: What Neuroeconomics Has to Say
‘Ambiguity’ is the Hallmark of Trading and Investing
The situation of taking a position when the odds are uncertain because of missing information is referred to by economists as “ambiguous”. F Knight in his book Risk, Uncertainty, and Profit was the first to emphasize ambiguity […]

By |November 4th, 2008|Emotions & Decisions, French PhD Chick|4 Comments