How Does Financial News Impact Your Brain?

Excerpt (Via Finance Professor.com)

“GLINTON: OK. You’re going to have tell me what neurofinance or neuroeconomics is.

 

KUHNEN: What we’re trying to do in this area is to use knowledge from neuroscience and psychology to understand how people think about financial risk and reward, how they think about forming their portfolios and how they make economic choices in general.

 

GLINTON: Kuhnen says when we hear bad financial news, we become more risk averse. For instance, if the stock market is tanking, we’re more likely to buy bonds than stocks, even if that’s the wrong thing to do. The way we hear the news affects us also.”

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19. August 2011 by Miguel Barbosa
Categories: Behavioral Economics, Curated Readings | Leave a comment

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