Comments on: Keynes said it before us http://traderpsyches.com/keynes-said-it-before-us Trading Psychology, the Thinking Man's Market Psychology Thu, 13 Oct 2011 21:28:50 +0000 hourly 1 http://wordpress.org/?v= By: DKS http://traderpsyches.com/keynes-said-it-before-us/comment-page-1#comment-295 DKS Mon, 29 Dec 2008 19:50:09 +0000 http://traderpsyches.com/blog/?p=385#comment-295 What I think is that the information conveyed in Pouget's work is conveyed through a feeling - and therefore, developing consciousness about feelings is the quickest way to make better decisions. I wouldn't necessarily agree with him that all of Kahneman's work told the participants the probabilities but the underlying problem with making the best decisions remains - it is a matter of knowing how to use your feelings as data - not something most Financial Engineers are taught to do. Ming Hsu, now of University of Illinois, has done the seminal work on risk versus ambiguity and our own French PhD check summarizes it very well - in fact Dr. Hsu told me it was the best summary he had seen! What I think is that the information conveyed in Pouget’s work is conveyed through a feeling – and therefore, developing consciousness about feelings is the quickest way to make better decisions.

I wouldn’t necessarily agree with him that all of Kahneman’s work told the participants the probabilities but the underlying problem with making the best decisions remains – it is a matter of knowing how to use your feelings as data – not something most Financial Engineers are taught to do.

Ming Hsu, now of University of Illinois, has done the seminal work on risk versus ambiguity and our own French PhD check summarizes it very well – in fact Dr. Hsu told me it was the best summary he had seen!

]]> By: Mark http://traderpsyches.com/keynes-said-it-before-us/comment-page-1#comment-294 Mark Mon, 29 Dec 2008 19:37:19 +0000 http://traderpsyches.com/blog/?p=385#comment-294 < “not all future events could be reduced to measurable risk. There was a residue of genuine uncertainty and this made disaster an ever-present possibility, not a once-in-a-lifetime ’shock’. Investment was more an act of faith than a scientific calculation of probabilities.” Just so, but then, ironically, Keynes, & kindred madcaps, devote themselves, tirelessly, to invigorating the black swan population.... what do you think of this? "We've been developing and strengthening this hypothesis for years—how the brain represents probability distributions," says Pouget. "We knew the results of this kind of test fit perfectly with our ideas, but we had to devise a way to see the neurons in action. We wanted to see if, in fact, humans are really good decision makers after all, just not quite so good at doing it consciously. Kahneman explicitly told his subjects what the chances were, but we let people's unconscious mind work it out. It's weird, but people rarely make optimal decisions when they are told the percentages up front." http://www.physorg.com/news149345120.html < “not all future events could be reduced to measurable risk. There was a residue of genuine uncertainty and this made disaster an ever-present possibility, not a once-in-a-lifetime ’shock’. Investment was more an act of faith than a scientific calculation of probabilities.”

Just so, but then, ironically, Keynes, & kindred madcaps, devote themselves, tirelessly, to invigorating the black swan population….

what do you think of this? “We’ve been developing and strengthening this hypothesis for years—how the brain represents probability distributions,” says Pouget. “We knew the results of this kind of test fit perfectly with our ideas, but we had to devise a way to see the neurons in action. We wanted to see if, in fact, humans are really good decision makers after all, just not quite so good at doing it consciously. Kahneman explicitly told his subjects what the chances were, but we let people’s unconscious mind work it out. It’s weird, but people rarely make optimal decisions when they are told the percentages up front.”

http://www.physorg.com/news149345120.html

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