Market mechanisms protect the vulnerable brain

Kanchna Ramchandran; Dhananjay Nayakankuppam; Joyce Berg; Daniel Tranel; Natalie L Denburg

doi:10.1016/j.neuropsychologia.2011.04.034

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Market mechanisms protect the vulnerable brain

Journal article

Open access

Peer reviewed

Market mechanisms protect the vulnerable brain

Kanchna Ramchandran, Dhananjay Nayakankuppam, Joyce Berg, Daniel Tranel and Natalie L Denburg

Neuropsychologia, Vol.49(9), pp.2533-2540

07/2011

DOI: 10.1016/j.neuropsychologia.2011.04.034

PMCID: PMC3139399

PMID: 21600226

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https://www.ncbi.nlm.nih.gov/pmc/articles/3139399View

Open Access

Abstract

► An aging population predicted the 2008 U.S. Presidential Election Nominees through market trading. ► Higher prediction error was associated with Impaired decision-making and lower caudate volume. ► Market based trading protected aging, Impaired decision-makers from their poor predictions. ► Market mechanisms may socially scaffold aging adults with decision-making vulnerabilities. Markets are mechanisms of social exchange, intended to facilitate trading. However, the question remains as to whether markets would help or hurt individuals with decision-makings deficits, as is frequently encountered in the case of cognitive aging. Essential for predicting future gains and losses in monetary and social domains, the striatal nuclei in the brain undergo structural, neurochemical, and functional decline with age. We correlated the efficacy of market mechanisms with dorsal striatal decline in an aging population, by using market based trading in the context of the 2008 U.S. Presidential Elections (primary cycle). Impaired decision-makers displayed higher prediction error (difference between their prediction and actual outcome). Lower in vivo caudate volume was also associated with higher prediction error. Importantly, market-based trading protected older adults with lower caudate volume to a greater extent from their own poorly calibrated predictions. Counterintuitive to the traditional public perception of the market as a fickle, risky proposition where vulnerable traders are most surely to be burned, we suggest that market-based mechanisms protect individuals with brain-based decision-making vulnerabilities.

Decision-making

Dopaminergic systems

Aging

Markets

Social neuroscience

Details

Title: Subtitle: Market mechanisms protect the vulnerable brain
Creators: Kanchna Ramchandran - 2188 RCP Department of Neurology, UIHC 200 Hawkins Drive, Iowa City, IA 52242, United States
Dhananjay Nayakankuppam - W234, 108 John Pappajohn Business Building, Iowa City, IA 52242, United States
Joyce Berg - S284 PBB108 John Pappajohn Business Building, Iowa City, IA 52242, United States
Daniel Tranel - 2155 RCP Department of Neurology, UIHC 200 Hawkins Drive, Iowa City, IA 52242, United States
Natalie L Denburg - 2007 RCP Department of Neurology, UIHC 200 Hawkins Drive, Iowa City, IA 52242, United States
Resource Type: Journal article
Publication Details: Neuropsychologia, Vol.49(9), pp.2533-2540
DOI: 10.1016/j.neuropsychologia.2011.04.034
PMID: 21600226
PMCID: PMC3139399
NLM abbreviation: Neuropsychologia
ISSN: 0028-3932
eISSN: 1873-3514
Publisher: Elsevier Ltd
Grant note: name: National Institute of Aging Career Development Award, award: K01 AG022033
Language: English
Date published: 07/2011
Academic Unit: Neurology; Marketing; Psychological and Brain Sciences; Iowa Neuroscience Institute; Accounting; Internal Medicine
Record Identifier: 9984001103002771

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