Communicator (communicator) wrote,
Communicator
communicator

Traders and psychopaths

I said in my last post I am trying not to see the most powerful financial traders as evil, but rather as individuals who have been given too much power, and so are destroying themselves. I like to believe that we need to have all different types of people - you know, angry people and unimaginative people, and whatever - because that makes us collectively more powerful. I'm not sure about psychopaths though. Perhaps they never do any good.

Bit of research here worth looking at. A couple of swiss psychologists compared the psychological profiles of financial traders with psychopaths, and their success in a 'Prisoners' Dilemma' game.
They expected to find that, like the psychopaths, the traders would be uncooperative with others, but that they’d perform better at the game .... traders “are supposed to be good at performing.”

But ... the traders were actually more uncooperative and egocentric than the psychopaths... (and) their performance at the game was about the same as the control group.

So basically, these traders are functionally indistinguishable from psychopaths, and no better than a random group at strategic performance.

I think we do have a question in society about what to do with psychopathic people. In case you think this is a polite way to say 'lock em up and throw away the key' - no, I don't think that. I just think we need to consider what to do about people who take insane risks and hurt other people.

In their master’s thesis, Noll and Scherrer write:
“The outcome seems to indicate that bank traders are even more prone than psychopathic individuals to rely on strategies that do not optimize their own total profit but considerably harm the profit of their gaming partner. Healthy controls achieved the same profit on their own part as traders and psychopaths but used a strategy that led to an equal profit of their partner and hence led to the highest overall profit, whereas the lowest overall profit was achieved by the traders.”
And I think this is a general rule about society. Co-operative strategies which maximise benefits for all, are superior in absolute terms not just relative terms - they generate greater profit. The people with the worst strategies are the ones we employ to do strategy. And that's our fault, not the fault of the psychopaths themselves.
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  • Phew what a scorcher

    I see Gove has backed down on climate change and it's back in the curriculum again.

  • GCSE Computer Science

    My book is now for sale

  • LJ Settings

    At the moment I have set up this journal so that only friends can comment. I hate doing this, but I was just getting too much Russian spam.