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Brain quirk could help explain financial crisis - life - 24 March 2009 - New ScientistWith hindsight, the causes of the current global financial meltdown seem obvious, even predictable. Now, brain imaging offers one explanation for why so few investors challenged foolhardy fiscal advice.
Our brains raise few objections when presented with seemingly expert guidance, new research suggests.
"Most average people have this tendency to turn off their own capacity for making judgments when an expert comes into the picture," says Gregory Berns, a neuroeconomist at Emory University in Atlanta.
Risk circuits
Berns' team presented 24 young volunteers with a simple choice: accept a sure payment or bet on a riskier, yet higher-paying lottery.
When weighing this decision, volunteers activated brain circuits known to calculate risk and reward. In line with previous research, the team noticed more brain activation in these dopamine-delivering areas when the expected reward was higher.
"When advice is not there, when people are making these judgments on their own, you can make clear correlations with expected value in the lottery and areas associated with the dopamine system," he says.
To see how subjects respond to financial advice, the team told volunteers that Charles Noussair, an economics professor at Emory who advises the US Federal Reserve, would offer his opinion on whether they should accept the easy money or take a chance.
Acting blindly
In reality, a computer program told volunteers to accept the sure thing if it added up to about 20% or more of the lottery sweepstake.
Volunteers usually took this advice blindly, brain scans suggest. Correlations between increased potential reward and brain activity disappeared when volunteers received the advice.
"That suggests that the normal mechanisms people use to evaluate risk and reward are not being used when you have an expert telling you what to do," Berns says.
"I think this explains a lot, if not everything, about the current market situation," he adds, urging people to take expert advice – fiscal, medical or otherwise – more shrewdly. "In my opinion, decision-making shouldn't be handed over to anyone, expert or otherwise."
Stimulus Psych 101: Economics vs. PoliticsPolitically Right and Economically Wrong: A Numbers Game Reveals the Psychology Behind the Stimulus
Commentary
By JOHN ALLEN PAULOS
March. 1, 2009 —
An intriguing mathematical-psychological game sheds a little light on the size of the stimulus package recently passed by Congress. In particular it illustrates the truism that passing legislation calls for an understanding of the interplay between politics and economics.
First, note that most economists believe that the $800 billion ($0.8 trillion) stimulus is too small to do the job. They say the package needs to be much greater to close the $2.9 trillion gap between what the Congressional Budget Office forecasts the economy is capable of producing over the next three years and what it's likely to produce without the stimulus.
Further argument and arm-twisting might reduce the gap further, but several iterations probably would be required to get something sufficiently effective. Recognizing political realities is essential, however. If the stimulus package presented had been significantly bigger, it likely would have failed.
The 80 Percent Game
Now for the game which I sometimes present to my classes.
Consider a situation in which people in a large group are each asked to independently choose a number (not necessarily a whole number) between 0 and 100. They are further directed to pick the number that they think will be closest to 80 percent of the average number chosen by the group.
The one who comes closest will receive $10,000 for his efforts. (This latter offer I don't make to my students.) Stop for a bit and think what number you would pick.
Some in the group might reason that if people choose numbers at random, the average number chosen is likely to be 50 and so these people would guess 40, which is 80 percent of 50. Others, looking around at the thoughtful looks on people's faces, might anticipate that many of them will reason in the same way and guess 40 too, and so they would guess 32 (or perhaps a bit higher), which is 80 percent of 40.
Still others, seeing the intense concentration of other smart people in the group, might anticipate that they will guess 32 (or so) for the same reason and so they would guess 25.6 (or a bit higher), which is 80 percent of 32.
If the group continues to play this game, they will gradually learn to engage in ever more iterations of this meta-reasoning about others' reasoning until eventually they all reach the optimal response, which is 0. Since they all want to choose a number equal to 80 percent of the average, the only way they can all do this is by choosing 0, the only number equal to 80 percent of itself.
Choosing 0 leads to the so-called Nash equilibrium of this game. It results when individuals modify their actions until they can no longer benefit from changing them given what the others' actions are.
Being Right Mathematically vs. Being Right Politically
What makes this problem interesting is that anyone bright enough to cut to the heart of the problem and guess 0 right away is almost certain to be wrong (that is, almost certain not to win the $10,000 prize), since different individuals will engage in different degrees of meta-reasoning about others' reasoning.
Some, to increase their chances, will choose numbers a little above or a little below the natural guesses of 40 or 32 or 25.6 or 20.48. There will be some random guesses as well and some guesses of 50 or more. Unless the group is very unusual, few will guess 0 initially. Not everyone reasons so trenchantly.
If someone plays this game only once or twice, guessing the average of all the guesses is as much a matter of reading the others' intelligence and psychology as it is of following an idea to its logical conclusion.
By the same token and to return to the stimulus, understanding the constraints on legislators is often as important as assessing the legislation under consideration. And it's likely to be more difficult as well.
Economics is nowhere near as clear-cut as mathematics and the above analogy is no doubt a bit strained, but it is nevertheless suggestive. Insisting on being right mathematically (that is, choosing 0 as your number) or right economically (enacting a much larger stimulus bill) is not always a smart thing to do.
It's certainly not the same thing as being right psychologically (gauging others' number choices) or being right politically (assessing others' partisan commitments).
Some variant of this idea also helps answer the question perennially asked of academics and others: If you're so smart, why aren't you rich? The inverse question posed to financiers and Wall Street types remains unanswered: If you're so dumb, why are you rich?
The Day The Sun Brought DarknessTwenty years later, the March 1989 'Quebec Blackout' has reached legendary stature, at least among electrical engineers and space scientists. It is a dramatic example of how solar storms can affect us even here on the ground. Fortunately, storms as powerful as this are rather rare. It takes quite a solar wallop to cause anything like the conditions leading up to a Quebec-style blackout. Typical solar activity 'sunspot' cycles can produce least two or three large storms, so it really is just a matter of chance whether one will cause a blackout or not. As it is for hurricanes and tornadoes, the more we can learn about the sun's 'space weather,' the better we can prepare for the next storm when it arrives.
Space storm alert: 90 seconds from catastrophe - space - 23 March 2009 - New ScientistIt is hard to conceive of the sun wiping out a large amount of our hard-earned progress. Nevertheless, it is possible. The surface of the sun is a roiling mass of plasma - charged high-energy particles - some of which escape the surface and travel through space as the solar wind. From time to time, that wind carries a billion-tonne glob of plasma, a fireball known as a coronal mass ejection (see "When hell comes to Earth"). If one should hit the Earth's magnetic shield, the result could be truly devastating.
The incursion of the plasma into our atmosphere causes rapid changes in the configuration of Earth's magnetic field which, in turn, induce currents in the long wires of the power grids. The grids were not built to handle this sort of direct current electricity. The greatest danger is at the step-up and step-down transformers used to convert power from its transport voltage to domestically useful voltage. The increased DC current creates strong magnetic fields that saturate a transformer's magnetic core. The result is runaway current in the transformer's copper wiring, which rapidly heats up and melts. This is exactly what happened in the Canadian province of Quebec in March 1989, and six million people spent 9 hours without electricity. But things could get much, much worse than that.
Bowel gene linked to a type of autism - health - 11 March 2009 - New ScientistON TOP of dealing with social and learning difficulties, people with autism also run an unusually high risk of bowel disorders. Now a gene variant has been found that may explain this link.
A large proportion of people with autism also have problems such as chronic diarrhoea, constipation or food intolerance. The MET gene, which has been linked to autism, is known to play a role in the repair of damaged gut tissue, so Daniel Campbell of Vanderbilt University in Nashville, Tennessee, thought this gene might be involved.
Sure enough, in 118 families in which at least one child had both autism and gut disorders, his team found that a particular variant of the MET gene was more common in the child with autism than in its parents, suggesting the gene played a role in their autism. By contrast this was not the case in 96 families where the children with autism did not have gut problems, suggesting their autism had a different cause (Pediatrics, DOI: 10.1542/peds.2008-0819).
Knowing the underlying genetic cause of an individual's autism could eventually lead to better ways of treating the condition.
Record-breaking algorithm really packs them in - tech - 06 March 2009 - New ScientistGeeky holidaymakers wanting to take more on a trip, as well as delivery firms trying to maximise loads and storage, could benefit from a new algorithm that packs collections of differently sized 2D shapes into the smallest available space with unprecedented efficiency.
This may seem like a more academic version of the video game Tetris, but the techniques developed can be applied to 3D problems in the real world. Increasing packing efficiency this way would lower the cost and also the environmental impact of shipping.
Fitting a set of objects into the smallest amount of space is such a complex scientific problem that researchers have yet to calculate the single best solution if more than around 20 objects are involved.
To get closer to that optimum fit, researchers pit their algorithms against each other in competitions to solve particular packing problems, such as fitting a collection of differently sized discs inside the smallest circle possible without overlaps. Johannes Schneider's team at the University of Mainz has just smashed all previous records in that disc-packing problem.
New direction
Their new algorithm matched all the records for packing up to 23 different sized discs in the smallest possible circle and broke all those for packing between 26 and 50 discs - challenges set in a previous competition contested by 155 groups from 32 countries.
The secret to the team's success is their algorithm's ability to take backward, as well as forward steps. Packing algorithms usually shuffle the discs again and again, aiming to reduce the space they occupy each time.
But that's rather like asking a mountaineer to find the highest point on Earth by always walking uphill, says Schneider. "Using this approach the mountaineer would climb to the top of a nearby hill, but there he would be stuck."
So Schneider and colleagues' algorithm allows for occasional reverse steps that can unlock better solutions - disc arrangements that take up more space than the previous one, but lead to even more compact packs. The algorithm uses backward moves often at the start of a packing process but they become less frequent as it closes in on the final solution, he says.
Although the new algorithm hasn't solved the packing problem for good, it provides the best solutions to date.
Three dimensions
"Making the use of backtracking moves more explicit is certainly a merit, and one of the main reasons for the successful approach," says Marco Locatelli at the University of Turin, a member of the team that previously held most of those records. However, he points out that packing algorithms improve fast and records rarely stand for long.
Locatelli would like to see how the new algorithm performs in other packing problem scenarios, including in three dimensions, something that Schneider's team plans to explore.
"We now have an algorithm which is able to solve packing problems with [3D] goods of different sizes in general," he says, making it applicable to real-world problems. "Shipping companies face the problem of packing trucks or ships in a way that as many goods as possible can be placed inside."
Schneider also plans to take the order in which objects are packed into account. "For example, the driver of a parcel delivery service must not unload half of his truck in order to get to the parcel which he should deliver to the next customer," he says.
Musicians are fine-tuned to others' emotions - life - 05 March 2009 - New ScientistMusical training might help autistic children to interpret other people's emotions. A study has revealed brain changes involved in playing a musical instrument that seem to enhance your ability to pick up subtle emotional cues in conversation.
"It seems that playing music can help you do all kinds of things better," says Nina Kraus from Northwestern University in Evanston, Illinois. "Musical experience sharpens your hearing not just for music, but for other sounds too."
Earlier studies suggested that musicians are especially good at identifying emotions expressed in speech, such as anger or sadness. But it wasn't clear what kind of brain activity makes the difference.
Trained brain
To find out, Kraus and her colleagues recruited 30 musicians and non-musicians, aged 19 to 35. Entertained by watching a subtitled nature film, they repeatedly heard a baby crying through earphones (hear an example). Using scalp electrodes, the team measured the electrical response to the sounds in each volunteer's brainstem, which links the auditory nerve to the cerebral cortex.
In the musicians, the response to complex parts of the sound, in which the frequency rapidly changes, was especially high. But the musicians had lower responses than non-musicians to simpler sections of the baby's sound.
"It's as though the musicians are saving their neural resources for the complex portions, which the non-musicians didn't respond to particularly well," Kraus told New Scientist.
Both more years of musical experience and learning to play an instrument at a young age increased a musician's response to the complex sounds. That suggests music practice makes the difference, rather than simply having a natural talent for music in the first place.
Therapeutic tool?
"It used to be we thought sensory systems were pretty passive – they took the sound and just passed the information to the cerebral cortex where all the hard work and thinking was done," says Kraus. "But now we're understanding that as we use our sensory systems in an active way, this feeds back and shapes the sensory system all the way down through the brainstem to the ear."
The results suggest musical training might be useful for kids with dyslexia, some of whom have trouble processing sounds.
Often, these children have trouble processing the complex sounds for which musicians develop an especially good ear. Autistic children might also benefit, if improving their responses to complex sounds helps them interpret emotional speech.
It may also be possible that measurements of brainstem responses to sound could help diagnose autism and language disorders in an objective and reliable way.
Bad Marriages Strain Women's Hearts, But Not Men's | LiveScienceAn unhappy marriage can weigh heavily on anyone's heart, but apparently women may suffer the most ill health effects related to heart disease, stroke and diabetes.
Women who felt depressed in strained marriages faced a boosted risk of hypertension, waistline obesity, high blood sugar, high triglycerides and low levels of "good cholesterol" HDL – five factors of metabolic syndrome. Male spouses who felt similarly down in the dumps did not see similar risks.
"The gender difference is important because heart disease is the number-one killer of women as well as men, and we are still learning a lot about how relationship factors and emotional distress are related to heart disease," said Nancy Henry, a psychologist at the University of Utah. She conducted her research as part of a broader university study.
The larger study's data suggests that a history of divorce is linked to heart disease. Psychologists recruited 276 couples who had been married for an average of 20 years and did not already have some cardiovascular disease. The husbands and wives filled out several questionnaires and visited a university clinic to get their health checked.
"The immediate implication is that if you are interested in your cardiovascular risk – and we all should be because it is the leading killer for both genders – we should be concerned about not just traditional risk factors [such as blood pressure and cholesterol] but the quality of our emotional and family lives," said Tim Smith, another University of Utah psychologist heading the larger study.
Smith hypothesized that the hormonal effects of stress could lead to married women's growing waistlines, rising insulin resistance, and unhealthy blood pressure levels.
Medical researchers still debate both the concept and clinical usefulness of lumping such factors together as metabolic syndrome – also known as syndrome X or insulin resistance syndrome.
"It is defined as a syndrome, but there still is controversy in the medical community – what should be included, how the different factors should be measured, whether all the factors hang together as a distinct syndrome or are they just separate things," Henry said.
But she still chose to study metabolic syndrome because there is no question its components are risk factors for cardiovascular disease, and because the syndrome was a possible explanation for how "psychosocial risk factors" in marriage are related to cardiovascular disease.
The study findings are scheduled for presentation at the American Psychosomatic Society's annual meeting on Thursday.
"There is good evidence they [women] should modify some of the things that affect metabolic syndrome – like diet and exercise – but it's a little premature to say they would lower their risk of heart disease if they improved the tone and quality of their marriages – or dumped their husbands," Smith said.
After all, stable marriages have possible health benefits as well – especially if spouses watch out for each other.
Power And The Illusion Of ControlPower And The Illusion Of Control
ScienceDaily (Mar. 4, 2009) — Power holders often seem misguided in their actions. Leaders and commanders of warring nations regularly underestimate the costs in time, money, and human lives required for bringing home a victory.
CEOs of Fortune 500 companies routinely overestimate their capacity to turn mergers and acquisitions into huge profits, leading to financial losses for themselves, their companies, and their stockholders. Even ordinary people seem to take on an air of invincibility after being promoted to a more powerful position. The consequences of these tendencies, especially when present in the world's most powerful leaders, can be devastating.
In a new study, Nathanael Fast and Deborah Gruenfeld at Stanford Graduate School of Business, Niro Sivanathan at the London Business School and Adam Galinsky at the Kellogg School of Management at Northwestern University, show that power can literally "go to one's head," causing individuals to think they have more personal control over outcomes than they, in fact, do.
"We conducted four experiments exploring the relationship between power and illusory control - the belief that one has the ability to influence outcomes that are largely determined by chance," said Galinksy, "In each experiment, whether the participant recalled power by an experience of holding power or it was manipulated by randomly assigning participants to Manager-Subordinate roles, it led to perceived control over outcomes that were beyond the reach of the individual. Furthermore, the notion of being able to control a 'chance' result led to unrealistic optimism and inflated self-esteem."
For example, in one experiment, power holders were presented with a pair of dice, offered a reward for predicting the outcome of a roll, and then asked if they would like to roll the dice or have someone else do it for them. Each and every participant in the high power group chose to roll the dice themselves compared to less than 70% of low power and neutral participants, supporting the notion that simply experiencing power can lead an individual to grossly overestimate their abilities, in this case, influencing the outcome of the roll by personally rolling the dice.
These results, reported in Psychological Science, a journal of the Association for Psychological Science, have implications for how power, once attained, is maintained or lost. The authors note that positive illusions can be adaptive, helping power holders make the seemingly impossible possible. But the relationship between power and illusory control might also contribute directly to losses in power, by causing leaders to make poor choices. They conclude that "the illusion of personal control might be one of the ways in which power often leads to its own demise."
Youthful infertility balanced by late-blooming ovaries - health - 04 March 2009 - New ScientistYOUNG women with fertility problems caused by polycystic ovary syndrome may have reason to take heart. Over a lifetime their chances of having children appear just as good as other women's, perhaps because egg production increases as they grow older.
About 7 per cent of reproductive-age women have PCOS, which features irregular periods, high levels of male hormones and greater numbers of developing follicles, or cysts, on the surface of their ovaries. In a normal ovary, a few follicles appear each month, one or two of which mature and release an egg; the rest die off. Women with PCOS ovulate less often because their extra follicles interfere with normal hormonal activity and stop follicles maturing past a certain stage. This is how PCOS lowers fertility.
Now it looks like that is not the end of the story. Miriam Hudecova and colleagues at Uppsala University in Sweden interviewed 91 women who were 35 or older and had been diagnosed with PCOS when younger. They found the women had undergone just as many pregnancies and borne as many babies, on average, as PCOS-free women of the same age. Some of the women with PCOS had been treated for infertility, but more than two-thirds had become pregnant without such help.
Hudecova also examined most of the women and found that the ovaries of the older women with PCOS showed signs of being more active, with better hormone levels and more eggs available, than those of control women of the same age (Human Reproduction, DOI: 10.1093/humrep/den482). "As they get older, the chance of getting pregnant may actually be higher," says Hudecova.
As women with polycystic ovarian syndrome get older the chance of getting pregnant may be higher
There may be an explanation for this. As women age, fewer follicles are produced each month, and in most this reduces fertility. With PCOS, however, fewer follicles may have the opposite effect: it may stop the hormonal interference and cause follicles to release eggs normally.
The hypothesis is backed up by other studies that have shown that the menstrual cycles of women with PCOS tend to become more regular as they age (Human Reproduction, vol 15, p 24). Marcelle Cedars, a reproductive endocrinologist at the University of California, San Francisco, points out that it also chimes with a recent finding that hormone treatments can coax immature follicles to produce eggs.
"They might hit their reproductive peak a little bit later than other women," says Richard Legro, a gynaecologist at Penn State Milton S. Hershey Medical Center in Hershey, Pennsylvania. "When we see more data to that effect we'll revise what we tell them."
