The Tweet: “According to one study, the behavior of a stockbroker is more reckless and manipulative than that of a psychopath.”
The news that stockbrokers and psychopaths share manipulative character traits is probably no surprise to anyone. It’s easy to see the source of the inspiration behind Patrick Bateman, the investment banker and serial killer in American Psycho, in how we portray these financially driven people in our media. So when two researchers from the University of St. Gallen, Switzerland, tested 28 professional stock traders they expected to see similarities in how they approach risk and reward, but were surprised to find the traders outperformed the psychopaths.
For this study, Pascal Sherrer, a forensics expert, and Thomas Noll used data collected previously on clinically diagnosed psychopaths and used this to compare with the results from the professional traders. The traders were asked to compete against a computer simulation and complete an intelligence test. They found that the traders were more fixated on winning than the psychopaths, concluding; “it was most important to the traders to get more than their opponents,” and they; “spent a lot of energy trying to damage their opponents.” The authors were surprised by the lengths that the stock brokers would go to in order to prevent their opponents from succeeding, likening their behaviour to someone smashing their neighbour’s car with a baseball bat to make their own car look better.
However, this doesn’t make stock traders psychopaths; “Naturally one can’t characterise the traders as deranged,” co-author Noll told SPIEGEL, in 2011. “But for example, they behaved more egotistically and were more willing to take risks than a group of psychopaths who took the same test.”
Previous studies have found that this risk-taking behaviour is essential to life on the trading floor. A 2005 study found that traders who were unable to feel some emotions due to brain damage performed better than traders without brain damage. This is because they experience less anxiety about taking risks. The author of that paper, Antoine Bechara, said; “It’s possible that people who are high-risk takers or good investors may have what you call a functional psychopathy.”
In an interview with the BBC, Alessio Rastani, a Forex trader, highlights just how psychopathic trader’s attitudes towards risk sound; “I’m a trader. I don’t care about [investors’ happiness and confidence]. If I see an opportunity to make money, I go with that. For most traders, we don’t really care how they’re going to fix the economy. Our job is to make money from it. Personally, I’ve been dreaming of this moment for three years. I have a confession, which is I go to bed every night and I dream of another recession. I dream of another moment like this.”
So while this research may come as no surprise, perhaps it is concerning how far this risk taking behaviour pushes individuals.
Image: Tax Credits/ FlickrThis post was first published on The Untweetable Truth (06/01/2014)