A recent study published in the Journal of Psychological Science and reported in today's Wall Street Journal showed that a group of individuals with brain damage to some of the more sensitive emotional regulatory areas in the brain made more profitable investment decisions than a control group with no known brain damage. Out of the 41 participants, the 15 "brain-damaged" individuals achieved approximately 10% more profitable results than their normal counterparts.

The neuroeconomics study conducted by researchers from Carnegie Mellon University, Stanford Graduate School of Business and the University of Iowa, used neurodiagnostic systems such as brain imaging and genetic analysis to show how risk-aversion can impede "rational investment decisions."

Applied neuroeconomics, or neurofinance, is already taking hold on Wall Street as David Darst, chief investment strategist in the Individual Investor Group at Morgan Stanley pointed out in the article, "this (neuroeconomics) branch of inquiry and economic investigation is really fortifying and buttressing our understanding of investor behavior...and is already informing our tactical decisions."

Most interesting, however, is the buried fact that 3 of the brain damaged investors had experienced personal bankruptcy.

So does this show how debased financial markets are from reality or reveal an inefficiency in how humans have adapted to our evolving social digital ecological? As George Lowenstein, professor of economics at CMU, noted "Human beings are pathologically risk averse...There were no such things as stock in the Pleistocene era."