Study Links Finger Length To Behavior

Potential investors might wish to examine the fingers of their financial advisor prior to signing over any savings. A new study from Concordia University has found the length between the second and fourth finger is an indicator of high levels of prenatal testosterone, risk-taking and potential financial success in men. The findings, published in the journal of Personality and Individual Differences, suggest that alpha males may take greater risks in relationships, on the squash court and in the financial market.

“Previous studies have linked high testosterone levels with risky behaviour and financial success,” says senior researcher Gad Saad, Concordia University Research Chair in Evolutionary Behavioral Sciences and Darwinian Consumption as well as a marketing professor at the John Molson School of Business. “We investigated the relationship between prenatal testosterone and various risk proclivities. Our findings show an association between high testosterone and risk-taking among males in three domains: recreational, social and financial.”

“Since women tend to be attracted to men who are fit, assertive and rich, men are apt to take risks with sports, people and money to be attractive to potential mates. What’s interesting is that this tendency is influenced by testosterone exposure – more testosterone in the womb can lead to more risks in the rink, the bar and the trading floor in later in life,” says first author and Concordia doctoral student, Eric Stenstrom.

Link only observed in men

Saad and his team analyzed risk-taking among 413 male and female students using a survey. “Prenatal testosterone exposure not only influences fetal brain development,” adds study co-author and graduate student, Zack Mendenhall, “but it also slows the growth of the index finger relative to the sum of the four fingers excluding the thumb.”

The change in finger length produced by testosterone provides a handy measure of prenatal testosterone exposure. The study compared the length of the index finger with all four digits (known as the rel2 ratio) and found that those with lower ratios were more likely to engage in risk-taking. These findings were further confirmed by the additional measurement of the ratio between the index and ring finger. These correlations were only observed in men.

“A possible explanation for the null effects in women is that they do not engage in risky behaviour as a mating signal, whereas men do,” says Professor Saad.

Sylvain-Jacques Desjardins @ Concordia University

Would You Bankroll Such A Game?

In making decisions, people (and economists) often overlook two aspects of a situation. The first is the asymmetry between gains and losses. The second is the non-linear effects of most realistic situations.

I mentioned the psychological difference between gains and losses in an earlier post (more pain than gain). Given the possibility of a gain or loss of X dollars, we are more distressed at the loss than pleased by a gain of the same amount. The literature is full of examples. But this asymmetry is not simply a psychological effect. Consider the case of increasing or decreasing the amount of oxygen in the air. A fifty percent reduction can leave you in serious distress, but a fifty percent increase would probably make you feel slightly stronger and perhaps give you a benign buzz. A gain or a loss of the same amount has different amounts of result, good or bad.

The example of oxygen starvation can also illustrate non-linearity. Small increases or decreases in oxygen level have little or no effect, but you cannot extrapolate that result very far. Larger decreases cause distress. Larger increases can produce euphoria. Even larger increases or decreases produce death (breathing pure oxygen at high pressures is not good).

Linear equations are easier to handle than more realistic non-linear ones, and if the changes are small enough, a linear approximation is often good enough.

Economics when properly done, is an extremely complex endeavor. Often the approximation of symmetrical gain and loss response combined with the assumption of linearity is used to permit solving equations (this involves inverting matrices–and that is best done with these assumptions).

So here is an puzzle. Gambling payoffs are computed assuming losses and gains should be the same. That is, in a fair game if you bet a dollar, the expected return is a dollar (minus whatever profits taxes, etc.) What would a game look like if account were taken of the difference between the pain of loss and the joy of gain? That is, what would a game look like if instead of computing the expected value of monetary return, the payoff was computed based on computing the expected value of satisfaction?

Would you sponsor such a game?

How Do Some People Find A Way To Win – No Matter What?

There should be an image here!Whether it’s sports, poker or the high-stakes world of business, there are those who always find a way to win when there’s money on the table.

Now, for the first time, psychology researchers at Washington University in St. Louis are unraveling the workings of a novel brain network that may explain how these “money players” manage to keep their heads in the game.

Findings suggest that a specific brain area helps people use the prospect of success to better prepare their thoughts and actions, thus increasing odds that a reward will be won.

The study, published Aug. 4 in the Journal of Neuroscience, identified a brain region about two inches above the left eyebrow that sprang into action whenever study participants were shown a dollar sign, a predetermined cue that a correct answer on the task at hand would result in a financial reward.

Using what researchers believe are short bursts of dopamine — the brain’s chemical reward system — the brain region then began coordinating interactions between the brain’s cognitive control and motivation networks, apparently priming the brain for a looming “show me the money” situation.

“The surprising thing we see is that motivation acts in a preparatory manner,” says Adam C. Savine, lead author of the study and a doctoral candidate in psychology at Washington University. “This region gears up when the money cue is on.”

Savine and colleague Todd S. Braver, PhD, professor of psychology in Arts & Sciences, tested 16 subjects in an experiment that required appropriate preparation for one of two possible tasks, based upon advance information provided at the same time as the money cue. Monetary rewards were offered on trials in which the money cue appeared (which happened randomly on half the trials), provided that the subjects answered accurately and within a specified timeframe. Obtaining the reward was most likely when subjects used the advance task information most effectively.

Using functional magnetic resonance imaging (fMRI), the researchers detected a network of eight different brain regions that responded to the multitasking challenge and two that responded to both the challenge and the motivational cue (a dollar sign, the monetary reward cue for a swift, correct answer).

In particular, Savine and Braver found that the left dorsolateral prefrontal cortex (DLPFC), located in the brain approximately two inches above the left eyebrow, is a key area that both predicts a win, or successful outcome, and prepares the motivational cognitive control network to win again.

Simply flashing the dollar-sign cue sparked immediate activation in the DLPFC region and it began interacting with other cognitive control and motivational functions in the brain, effectively putting these areas on alert that there was money to be won in the challenge ahead.

“In this region (left DLPFC), you can actually see the unique neural signature of the brain activity related to the reward outcome,” Savine says. “It predicts a reward outcome and it’s preparatory, in an integrative sort of way. The left DLPFC is the only region we found that seems to be primarily engaged when subjects get the motivational cue beforehand, it’s the region integrates that information with the task information and leads to the best task performance.

The researchers actually observed increased levels of oxygenated hemoglobin in the brain blood flow in these regions.

The finding provides insight into the way people pursue goals and how motivation drives goal-oriented behavior. It also could provide clues to what might be happening with different populations of people with cognitive deficiencies in pursuing goals.

Savine and Braver sought to determine the way that motivation and cognitive control are represented in the brain. They found two brain networks — one involved in reward processing, and one involved in the ability to flexibly shift mental goals (often referred to as “cognitive control”) — that were coactive on monetary reward trials. A key question that still needs to be answered is exactly how these two brain networks interact with each other.

Because the brain reward network appears to center on the brain chemical dopamine, the researchers speculate that the interactions between motivation and cognitive control depend upon “phasic bursts of dopamine.”

They wanted to see how the brain works when motivation impacts task-switching, how it heightens the importance of a one-rewarding goal while inhibiting the importance of non-rewarding goals.

“We wanted to see what motivates us to pursue one goal in the world above all others,” Savine says. “You might think that these mechanisms would have been addressed a long time ago in psychology and neuroscience, but it’s not been until the advent of fMRI about 15-20 years ago that we’ve had the tools to address this question in humans, and any progress in this area has been very, very recent.”

In this kind of test, as in the workplace, many distractions exist. In the midst of a deadline project with an “eye on the prize,” the phone still rings, background noise of printers and copying machines persist, an interesting world outside the window beckons and colleagues drop in to seek advice. A person’s ability to control his or her cognition — all the things a brain takes in — is directly linked to motivation. Time also plays a big factor. A project due in three weeks can be completed with some distraction; a project due tomorrow inhibits a person’s response to interrupting friends and colleagues and allows clearer focus on the goal.

The researchers intend to explore the left DLPFC more as a “uniquely predictive measure of pursuing rewarded outcomes in motivated settings,” Savine says.”Another key research effort will seek to more directly quantify the involvement of dopamine chemical release during these tasks.”

And they may test other motivators besides money, such as social rewards, or hunger or thirst, to see “if different motivators are all part of the same reward currency, engaging the same brain network that we’ve shown to be activated by monetary rewards,” Savine says.

[Photo above by shoobydooby / CC BY-ND 2.0]

Todd Braver @ Washington University in St. Louis

[awsbullet:mensa casino gambling]

Problem Gamblers Provoked By 'Near Misses' To Gamble More

There should be an image here!The brains of problem gamblers react more intensely to “near misses” than casual gamblers, possibly spurring them on to play more, according to new research in The Journal of Neuroscience. The researchers found the brain region that responds to rewards by delivering a dose of the chemical dopamine was especially active in these individuals.

Studies have shown that pathological gambling is an addiction, similar in many ways to drug addiction. Now, U.K. researchers Luke Clark, PhD, of the University of Cambridge, and Henry Chase, PhD, of the University of Nottingham find that the degree to which a person’s brain responds to near misses may indicate the severity of addiction. In a given year, more than two million U.S. adults feel an uncontrollable urge to gamble despite negative consequences.

In this study, the researchers used functional magnetic resonance imaging (fMRI) to scan the brains of 20 gamblers. The participants’ gambling habits ranged from buying the occasional lottery ticket to compulsive sports betting.

During the experiment, volunteers used an onscreen slot machine with two spinning wheels of icons. When the two icons matched, the volunteer won about 75 cents, and the brain’s reward pathways became active. An icon mismatch was a loss. However, when the wheels stopped within one icon of a match, the outcome was considered a near miss. Clark and his team found that near misses activated the same brain pathways that wins did, even though no reward was given.

“These findings are exciting because they suggest that near-miss outcomes may elicit a dopamine response in the more severe gamblers, despite the fact that no actual reward is delivered,” Clark said. “If these bursts of dopamine are driving addictive behavior, this may help to explain why problem gamblers find it so difficult to quit.”

In particular, the authors detected strong responses in the midbrain, an area associated with addiction that is packed with dopamine-releasing brain cells. They also found the near misses were linked with increased activity in brain regions called the ventral striatum and the anterior insula, areas tied with reward and learning.

Studies have shown that people who play games of chance, such as slot machines or the lottery, often mistakenly believe some level of skill is required to win. This illusion of control often pushes players to continue. Matthew Roesch, PhD, an expert in reward and behavior at the University of Maryland College Park who was unaffiliated with the study, said the increased levels of dopamine during near misses may be critical in driving pathological gambling and supporting the misconception that games of chance involve any skill.

“Future work will be necessary to determine if this response is causal or if this abnormality is a preexisting trait of pathological gamblers — and whether or not it is common across addictions,” Roesch said.

Kat Snodgrass @ Society for Neuroscience

[Photo above by Eric Mesa / CC BY-ND 2.0]

[awsbullet:Compulsive Gambler]

"Never Bet More Than You Can Afford To Lose."

A recent exchange of emails with Jeff Partridge about my last couple of columns suggests that I should take time to explore the functions of “bet,” “wager,” or “gamble” as used in examples of decision making as opposed to their use in common langu. In the previous columns I presented a situation where a wager would pay off much better than even odds, but a reasonable person would not take that bet because it required putting on the line a large fraction of the bettor’s net worth.

Jeff quotes the old rule, “Never bet more than you can afford to lose.”

That is a good rule which we could quantify a bit more. Decide how much you are comfortable in losing. Know the probabilities such that you can compute the long-term expected return on your gamble. This can help you estimate how long you can survive. In the example I gave, the probability is that in the long run your profit would be positive. However, the problem is that if you go broke in the short run, you never get to the long run. It does not matter how much the odds favor you if you lose everything on the first event. A similar calculation shows that on the average if equally skilled poker players compete, the one who starts with the most money will win all of it. Of course this assumes each hand depletes only a small part of each player’s holdings otherwise someone could go bust before the long-term effects of probability kick in.

All these considerations contain a hidden assumption that is probably not justified. We have assumed that people place bets to win and increase their wealth. While that might be a motivation of some mathematicians who really know they have an edge, it in not the motivation for most people. Most people seem to gamble at games, love, and business for much the same reason people go to horror shows or bungee jump — they relish the adrenaline rush. That is, the gambling as an activity is an end in itself. Starting a business might make money, but a true entrepreneur gets satisfaction from the effort.

All this is well and good unless the addiction to the rush requires betting enough at a time that losing really hurts.

That fact is that using wagers and bets as examples in discussing rational decision theory, statistics, and probability is convenient, but artificial. Very few people will go to Las Vegas with a book on the theory of probability in their suitcase. That does not mean that the gambling exercises are invalid. The puzzle of the Sultan’s daughter was completely artificial but illustrated an advanced concept in a way that made learning it more fun than wading through several pages of mathematics.

Decision theory is a powerful tool when combined with an understanding of statistics and how probabilities are reliably derived from them, but like any tool, garbage in means garbage out. If you attempt to extend the definition of gambling to include the psychological aspects, then the computations get a whole lot more complex.

In response to the interest my original tutorial generated, I have completely rewritten and expanded it. Check out the tutorial availability through Lockergnome. The new version is over 100 pages long with chapters that alternate between discussion of the theoretical aspects and puzzles just for the fun of it. Puzzle lovers will be glad to know that I included an answers section that includes discussions as to why the answer is correct and how it was obtained. Most of the material has appeared in these columns, but some is new. Most of the discussions are expanded compared to what they were in the original column format.

[tags]wager, bet, gamble, probability, statistics[/tags]

We Make Implicit Bets Every Day

In last week’s column, I explored the possibility that calculating the payoff for making a bet is insufficient to decide whether or not it is in your best interest to take it. Even if the odds are heavily in your favor, other considerations might prohibit you from gambling. A common deterrence to taking a chance is the potential loss compared to your total holdings. This is often more important than your potential winnings. Since the odds of a wager are not dependent on your holdings, then knowledge of the odds is obviously insufficient to decide if the wager is a good one.

The example I used last week involved making a wager with odds favoring you winning when the minimum bet is either $1 or $1 million of your own money. Since most of us cannot afford to lose $1 million, we would not take the bet, but Bill Gates could take either bet without difficulty or second thought.

A similar issue arises when deciding to take chances. Suppose you have reason to believe that a potential sexual partner is unlikely to infect you with an STD, but you are not sure. You really like the person and the time is ripe, but neither of you has protection. What do you do? Assume the same thoughts are going through the potential partner’s mind. What happens? The event could be enjoyable and even meaningful, but it could also lead to a nasty disease and early death. Well, we don’t always behave either logically or in our own best interests. There are even times when we decide to ignore the warning signs. Such is life.

One common way to decide whether to take a bet or not is to go beyond the simple chances on winning or losing and look at the potential rewards and losses. This is normally done without reference to what fraction of your total wealth is represented by this calculation. In the examples above and last week, one probably does not take the bet for $1 million because we all have some net worth, which is a reasonable sum. But the logic of probability favors taking the bet. If you have net worth far greater than $1 million, either bet could simply be a pleasant diversion.

Consider a third scenario. Suppose you have very little cash and are allowed to make the $1 million bet on credit secured by your signature. Given your past earning record, suppose it is unlikely that you will earn enough to pay off the note if you lose. Also assume the lending institution is a legal one that does not contract for kneecaps. Does this situation change your betting strategy?

These artificial situations seem to be just that — artificial, but in fact, we make implicit bets every day. Should you cross the road in the middle of the block? What is the probability of getting hit? What is the probability of getting a jaywalking ticket? What is the cost of either loss and what is the benefit of taking the chance? What should you eat and how much?

In general, we make decisions considering what we have in resources, but often the decision theory problems are presented as though that were not an issue. An arbitrary situation is proposed and the probabilities and payoff matrix presented. Under those circumstances, we might derive a different result than would occur in real life.

In response to the interest my original tutorial generated, I have completely rewritten and expanded it. Check out the tutorial availability through Lockergnome. The new version is over 100 pages long with chapters that alternate between discussion of the theoretical aspects and puzzles just for the fun of it. Puzzle lovers will be glad to know that I included an answers section that includes discussions as to why the answer is correct and how it was obtained. Most of the material has appeared in these columns, but some is new. Most of the discussions are expanded compared to what they were in the original column format.

[tags]bet, gamble, decision theory, statistics[/tags]

Supercomputers Find More and Broader Uses

We’ve heard the name, but what exactly is a supercomputer? A supercomputer basically is a computer that leads the world in terms of processing capacity, particularly speed of calculation, at the time of its introduction. And since computers are always getting faster and faster, the term is applied to those computers that are the fastest today (given that tomorrow’s systems will even be faster).

Therese Poletti of The Mercury News writes:

Believe it or not, the term supercomputer was actually coined back in the 1920s by a New York newspaper to describe a tabulator that IBM had designed for Columbia University. Today’s supercomputers have taken on some new rolls, which I believe shows the diversity of today’s supercomputers. I think you will enjoy reading about how this technology will effect our everyday living.

Supercomputers, the world’s fastest computers, aren’t just for scientists anymore: They have made big inroads into solving problems that touch our everyday lives.

Procter & Gamble uses them to design sturdier plastic laundry soap bottles. The Riverside Casino in Iowa has one to manage thousands of electronic slot machines and keep track of millions of bets. The Italian police use them to analyze clues at murder scenes.

But as these massive systems become more affordable for both companies and researchers, scientists are still seeking new ways to speed them up, so they can better predict hurricanes or design more precise drugs. [Source: The Mercury News]

[tags]supercomputers, broader uses, computing, silicon, italian, police, proctor, gamble[/tags]