‘We float through life on a sea of uncertainty where emotion rules the waves; fear and anxiety are rife, and happiness is elusive and ephemeral’ as I write in my book How the Brain Thinks. To remove some if this uncertainty, we are constantly trying to predict the future, from stock markets, to longevity. Historically the tools of probability, particularly conditional probability and its offshoots, have been used, as I discuss in a recent post. Now a new prediction tool has emerged- that of real time fMRI.
Linda Geddes in the Guardian writes. ‘From never trading during the first 30 minutes, to not returning to a stock for a third time, financial investors have a stack of superstitions for predicting stock price changes.
Now neuroscientists may have hit upon a more accurate prediction tool: scans of people’s brain activity just before they make investment choices.
A study in the Journal of Neuroscience suggests brain activity may be a better predictor of stock price changes than prior market trends, or the actual stocks people decide to invest in.
Brian Knutson at Stanford University in California and his colleagues previously used the average brain activity of a group of people to predict which videos would go viral and which crowdfunding campaigns were the most likely to receive funding.
Now, they have applied the same principals to the stock market. They asked a group of volunteers to examine real stock price trends from 2015 as they were updated throughout a simulated trading session, and to bet on whether they would rise or fall.
At the same time, they using functional magnetic resonance imaging (fMRI)to measure activity in two brain areas: the nucleus accumbens, which is activated during rewarding experiences, and the anterior insula, which is associated with anxiety and risk-avoidance. “Past research has suggested that these areas are engaged right before people make a risky choice,” Knutson said.
Based on the group’s average brain activity, Knutson found that activity in the anterior insula could forecast when a stock’s price would flip or change direction, and that these “neuroforecasts” were significantly more accurate than participants’ own predictions about which stocks would do well the next day, or predictions based on prior stock market trends.
“It opens up all these really fascinating questions, like is there information that’s hidden in the brain that we could take advantage of, and do some people have better brain signals than others?” Knutson said. “Another question is whether people can access what’s going on in their brains?”
Just imagine any circumstance in which you would like to know the outcome more accurately. The possibilities are endless.
In the meantime, after five months, I have just returned to blogging after selling my house and am now living on our ‘Savage Coast’, West of Auckland.
Expect to hear more from me in the future, if I can survive the tumult. There is a lot going on in the neuroscience space that needs interpretation and perspective. Hopefully I can provide some of that.
