I just read an interesting article on http://www.newyorker.com/online/blogs/frontal-cortex/2012/06/brain-experiments-why-we-dont-believe-science.html#ixzz1z5kOiuCU.
Here is an excerpt: “In a 2003 study, Kevin Dunbar, a psychologist at the University of Maryland, showed undergraduates a few short videos of two different-sized balls falling. The first clip showed the two balls falling at the same rate. The second clip showed the larger ball falling at a faster rate. The footage was a reconstruction of the famous (and probably apocryphal) experiment performed by Galileo, in which he dropped cannonballs of different sizes from the Tower of Pisa. Galileo’s metal balls all landed at the exact same time—a refutation of Aristotle, who claimed that heavier objects fell faster.
While the students were watching the footage, Dunbar asked them to select the more accurate representation of gravity. Not surprisingly, undergraduates without a physics background disagreed with Galileo. They found the two balls falling at the same rate to be deeply unrealistic. (Intuitively, we’re all Aristotelians.) Furthermore, when Dunbar monitored the subjects in an fMRI machine, he found that showing non-physics majors the correct video triggered a particular pattern of brain activation: there was a squirt of blood to the anterior cingulate cortex, a collar of tissue located in the center of the brain. The A.C.C. is typically associated with the perception of errors and contradictions—neuroscientists often refer to it as part of the “Oh shit!” circuit—so it makes sense that it would be turned on when we watch a video of something that seems wrong, even if it’s right.
So that I don’t get in trouble please continue reading the article here: http://www.newyorker.com/online/blogs/frontal-cortex/2012/06/brain-experiments-why-we-dont-believe-science.html#ixzz1z5kOiuCU
Now, the question beckons, what does it mean for the quality of your trading analysis and decisions?
