Table of Contents

Experimental Studies on Trading Decision

Armando da Rocha, Research on Artificial and Natural Intelligence (RANI)
Fábio Rocha, Research on Artificial and Natural Intelligence (RANI)


NEUROECONOMICS eJOURNAL

"Experimental Studies on Trading Decision" Free Download

ARMANDO DA ROCHA, Research on Artificial and Natural Intelligence (RANI)
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F?BIO ROCHA, Research on Artificial and Natural Intelligence (RANI)
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Technological advances in recording the brain activity in normal during the last two decades of the 20th century, paved the way for the studies about the cerebral dynamics of human cognition and decision making. These investigations are necessarily multidisciplinary in essence, involving both neuroscientists and researchers of all other areas of human knowledge. In particular, the frontiers between Neurosciences, Economy and Finances begun to be explored and many studies begun to appear under the names of Neuroeconomic, Neurofinances, etc. These activities demand a close collaboration between experts in many fields of sciences, therefore require as two way traffic of knowledge and information.

There are two main types of activity in these interdisciplinary studies: theoretical and experimental ones. In the theoretical field, neurosciences knowledge provides the guide lines to build formal models of interest for the other disciplines, or questions about established theories in Economics, Finances, etc. raise interesting points for Neurosciences debates. These theoretical discussions highlight themes for experimental investigation of both the cerebral or market dynamics.

Neurosciences knowledge about the brain organization for financial decision in used to develop to a theoretical model about Financial Decision Making. This model was used both to study price evolution in many distinct Stock Markets and to investigate the cerebral activity associated to a stock market simulating game playing. The results of this experimental study are discussed at extent in chapter 10, and show that the proposed theoretical model provides a nice fit to the experimental data.

The general conclusion from data and discussions provided by the book is that a neuroscientific approach of financial decision is feasible and may contribute for a better understanding the economic and financial human activities.

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About this eJournal

This eJournal distributes working and accepted paper abstracts focused on research where economic outcomes are the product of many individual decisions, constrained by scarcity, and equilibrium forces that simultaneously shape a person's social networks and the institutionally defined rules of the game. Decisions are made by computations in the brain which produce action-choices that directly affect the homeostatic wellbeing of the individual and choices that indirectly change wellbeing by changing an individual's future constraints, the scope of their social networks, and their message sending rights within the institutions they participate. Neuroeconomics broadly speaking is interested in the study of these computations and the resulting choices they produce. This includes experiments that attempt to understand the mechanisms of neuronal computations that produce action-choices, theories which predict how neuronal computations in socio-economic environments produce decisions, outcomes and wellbeing, and policy which use our understanding of neuoroeconomic behavior to either build or defend better solutions to societal problems.

Editors: Michael C. Jensen, Harvard University, and Kevin A. McCabe, George Mason University

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ERN SUBJECT MATTER EJOURNALS

MICHAEL C. JENSEN
Harvard Business School, SSRN, National Bureau of Economic Research (NBER), European Corporate Governance Institute (ECGI), Harvard University - Accounting & Control Unit
Email: mjensen@hbs.edu

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Neuroeconomics eJournal

ANDREW W. LO
Harris & Harris Group Professor, Massachusetts Institute of Technology (MIT) - Sloan School of Management, National Bureau of Economic Research (NBER), Principal Investigator, Massachusetts Institute of Technology (MIT) - Computer Science and Artificial Intelligence Laboratory (CSAIL)

P. READ MONTAGUE
Professor, Baylor University - Department of Neuroscience

VERNON L. SMITH
Professor of Economics and Law, Chapman University - Economic Science Institute, Chapman University School of Law