23. a strong predictor of financial risk-taking: Camelia M. Kuhnen and Joan Y. Chiao, “Genetic Determinants of Financial Risk Taking,” PLoS ONE 4(2): e4362. doi:10.1371/journal.pone.0004362 (2009). See also Anna Dreber et al., “The 7R Polymorphism in the Dopamine Receptor D4 Gene (DRD4) Is Associated with Financial Risk Taking in Men.” Evolution and Human Behavior 30, no. 2 (2009): 85–92.
24. When faced with a low probability of winning: J. P. Roiser et al., “The Effect of Polymorphism at the Serotonin Transporter Gene on Decision-making, Memory and Executive Function in Ecstasy Users and Controls,” Psychopharmacology 188 (2006): 213–27.
25. Another study, of sixty-four traders: Mark Fenton O’Creevy et al., Traders: Risks, Decisions, and Management in Financial Markets (Oxford, UK: Oxford University Press, 2005), 142–43.
26. delaying gratification, a crucial life skill: Jonah Lehrer, “Don’t,” The New Yorker , May 18, 2009. See also Jacob B. Hirsh et al., “Positive Mood Effects on Delay Discounting,” Emotion 10, no. 5 (2010): 717–21. See also David Brooks, The Social Animal (New York: Random House, 2011), 124.
27. scientists gave participants the choice: Samuel McClure et al., “Separate Neural Systems Value Immediate and Delayed Monetary Rewards,” Science 306 (2004): 503–7.
28. A similar study suggests: Hirsch, “Positive Mood Effects on Delay Discounting.”
29. Yet it was just this kind of risk-reward miscalculation: Wall Street’s judgment was clouded by a strange brew of (1) lemming-like behavior, (2) the opportunity to earn large transaction fees, (3) the fear of losing market share to competitors, and (4) the inability to properly balance opportunity against risk.
30. Too much power was concentrated in the hands of aggressive risk-takers: Interview with the author, March 5, 2009.
31. “For twenty years, the DNA”: Fareed Zakaria, “There Is a Silver Lining,” Newsweek , October 11, 2008.
32. Vincent Kaminski: Steven Pearlstein, “The Art of Managing Risk,” The Washington Post , November 8, 2007. See also Alexei Barrionuevo, “Vincent Kaminski: Sounding the Alarm But Unable to Prevail,” in “10 Enron Players: Where They Landed After the Fall,” The New York Times , January 29, 2006. And see Kurt Eichenwald, Conspiracy of Fools: A True Story (New York: Broadway, 2005), 250.
33. Imagine that you’ve been invited to Newman’s lab: C. M. Patterson and Joseph Newman, “Reflectivity and Learning from Aversive Events: Toward a Psychological Mechanism for the Syndromes of Disinhibition,” Psychological Review 100 (1993): 716–36. Carriers of the s-variant of the 5HTTLPR polymorphism (which is associated with introversion and sensitivity) have also been show to be faster to learn to avoid penalizing stimuli in passive avoidance tasks. See E. C. Finger et al., “The Impact of Tryptophan Depletion and 5-HTTLPR Genotype on Passive Avoidance and Response Reversal Instrumental Learning Tasks,” Neuropsychopharmacology 32 (2007): 206–15.
34. introverts are “geared to inspect”: John Brebner and Chris Cooper, “Stimulus or Response-Induced Excitation: A Comparison of the Behavior of Introverts and Extroverts,” Journal of Research in Personality 12, no. 3 (1978): 306–11.
35. more likely you are to learn: Indeed, it’s been shown that one of the crucial ways that we learn is to analyze our mistakes. See Jonah Lehrer, How We Decide (New York: Houghton Mifflin Harcourt, 2009), 51.
36. If you force extroverts to pause … how to behave around warning signals in the future: Interview with the author, November 13, 2008. Another way to understand why some people worry about risks and others ignore them is to go back to the idea of brain networks. In this chapter I focused on the dopamine-driven reward system and its role in delivering life’s goodies. But there’s a mirror-image brain network, often called the loss avoidance system, whose job is to call our attention to risk. If the reward network chases shiny fruit, the loss avoidance system worries about bad apples.
The loss avoidance system, like the reward network, is a double-edged sword. It can make people anxious, unpleasantly anxious, so anxious that they sit out bull markets while everyone else gets rich. But it also causes them to take fewer stupid risks. This system is mediated in part by a neurotransmitter called serotonin—and when people are given drugs like Prozac (known as selective serotonin reuptake inhibitors) that affect the loss avoidance system, they become more blasé about danger. They also become more gregarious. These features coincide uncannily, points out the neurofinance expert Dr. Richard Peterson, with the behavior of irrationally exuberant investors. “The characteristics of decreased threat perception and increased social affiliation [resulting from drugs like Prozac] mirror the decreased risk perception and herding of excessively bullish investors,” he writes. “It is as if bubble investors are experiencing a partial deactivation of their brains’ loss avoidance systems.”
37. relative performance of introverts and extroverts: Dalip Kumar and Asha Kapila, “Problem Solving as a Function of Extraversion and Masculinity,” Personality and Individual Differences 8, no. 1 (1987): 129–32.
38. Extroverts get better grades: Adrian Furnham et al., “Personality, Cognitive Ability, and Beliefs About Intelligence as Predictors of Academic Performance,” Learning and Individual Differences 14 (2003): 49–66. See also Isabel Briggs Myers and Mary H. McCaulley, MBTI Manual: A Guide to the Development and Use of the Myers-Briggs Type Indicator (Palo Alto, CA: Consulting Psychologists Press, 1985), 116; see also the Myers 1980 study referred to in Allan B. Hill, “Developmental Student Achievement: The Personality Factor,” Journal of Psychological Type 9, no. 6 (2006): 79–87.
39. 141 college students’ knowledge: Eric Rolfhus and Philip Ackerman, “Assessing Individual Differences in Knowledge: Knowledge, Intelligence, and Related Traits,” Journal of Educational Psychology 91, no. 3 (1999): 511–26.
40. disproportionate numbers of graduate degrees: G. P. Macdaid, M. H. McCaulley, and R. I. Kainz, Atlas of Type Tables (Gainesville, FL: Center for Applications of Psychological Type, 1986), pp. 483–85. See also Hill, “Developmental Student Achievement.”
41. outperform extroverts on the Watson-Glaser: Joanna Moutafi, Adrian Furnham, and John Crump, “Demographic and Personality Predictors of Intelligence: A Study Using the NEO Personality Inventory and the Myers-Briggs Type Indicator,” European Journal of Personality 17, no. 1 (2003): 79–84.
42. Introverts are not smarter than extroverts: Author interview with Gerald Matthews, November 24, 2008. See also D. H. Saklofske and D. D. Kostura, “Extraversion-Introversion and Intelligence,” Personality and Individual Differences 11, no. 6 (1990): 547–51.
43. those performed under time or social pressure: Gerald Matthews and Lisa Dorn, “Cognitive and Attentional Processes in Personality and Intelligence,” in International Handbook of Personality and Intelligence , edited by Donald H. Saklofske and Moshe Zeidner (New York: Plenum Press, 1995), 367–96. See also Gerald Matthews et al., Personality Traits (Cambridge, UK: Cambridge University Press, 2003), ch. 12.
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