About this author
Zack Lynch is author of The Neuro Revolution: How Brain Science Is Changing Our World (St. Martin's Press, July 2009).
He is the founder and executive director of the Neurotechnology Industry Organization (NIO) and co-founder of NeuroInsights. He serves on the advisory boards of the McGovern Institute for Brain Research at MIT, the Center for Neuroeconomic Studies, Science Progress, and SocialText, a social software company. Please send newsworthy items or feedback - to Zack Lynch.
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September 26, 2008

Holy Neurofinancial Meltdown Bernanke

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Posted by Zack Lynch

forbes.pngEmotions are riding very high. Herd behavior is everywhere. And if you listen to Treasury Secretary Paulson and Fed Chief Bernanke the primary reason for such a high bailout amount of $700B is to inspire "confidence" in the market. So are our brains to blame for this market mess? Yes, at least according leading neuroeconomist interviewed by Forbes Matthew Herper in his recent piece, Market Mess, Blame Your Brain.

"Fear plus herding equals panic," says Gregory Berns, a neuroeconomist at Emory University. "You bet it's biologically based."

At the core of the market mess are securities that were backed by extremely risky mortgages. The theory was that slicing and dicing mortgages diluted the risk away.

But the ratings agencies were being compensated by issuers of the mortgage-backed securities, and neuroeconomics says that created big problems. "You don't get mistakes this big based on stupidity alone," says George Loewenstein of Carnegie Mellon University. "It's when you combine stupidity and people's incentives that you get errors of this magnitude."

Consider this forthcoming research by Loewenstein, Roberto Weber and John Hamman, all of Carnegie Mellon. They organized volunteers into partners. One partner is given $10 and told to split it however he sees fit. On average, the deciding partner keeps $8 and gives away $2.

Then researchers repeat the game. This time, the decider pays an "analyst" to decide how to split the money fairly. The game continues for multiple rounds and the decider can fire the analyst. With this change, the decider gets everything. Paying somebody else to ensure assets are divided fairly actually makes things less fair.

So what's a regulator to do? Read about that in Herper's full article here.

Comments (0) + TrackBacks (0) | Category: Neurofinance

September 5, 2008

Interest in Neuropolicy Grows

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Posted by Zack Lynch

pd_brain_070428_mn.jpgA new Center for Neuropolicy at Emory University will focus on how the biology of the brain influences decision-making in politics, policy and business. As a partnership among researchers in the Emory School of Medicine, Emory College and the Goizueta Business School, the center will create an ideal environment to accelerate discovery in this emerging field. The Center is the vision of Gregory S. Berns, MD, PhD, professor in the Department of Psychiatry and Behavioral Sciences at Emory University School of Medicine. Berns specializes in the use of brain imaging technologies to understand human motivation and decision-making, with a special interest in neuroeconomics and social neuroscience. There are a whole host of emerging neuropolicy issues that need analyzing including: neurolaw, neuromarketing and neurowarfare.

Comments (0) + TrackBacks (0) | Category: Neuropolicy

September 2, 2008

Want to Start a Neurotech Venture?

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Posted by Zack Lynch

NeurotechVenturesClass.pngDo you have what it takes to start your own neurotech venture? If you think so, then I'd highly recommend getting over to MIT to enroll in this year's Neurotechnology Ventures seminar put on by Ed Boyden, Joost Paul Bonsen and Rutledge Ellis-Behnke. Each 2-hour class begins with a survey of a broad topic area, and continues with a live-case study of a current, specific, development or commercialization effort in that area. Explorations will cover a broad array of issues ranging from the deeply technical, to the analysis of market realities from across the neurotechology industry. Topics Include: neuroimaging, neurology/psychiatry diagnosis, rehabilitation, neurosurgery, neuropharmacology, brain Stimulation, prosthetics, sensory and motor augmentation, regenerative neuromedicine, and more. I'll be back there next week for the kick off meeting giving an overview of the neurotech industry while following weeks are full of exciting emerging neurotech innovators.

Comments (0) + TrackBacks (0) | Category: Neurotech Industry