Boldly going where no brain has gone: Futures of evolutionary cognitive neuroscience

Evolutionary cognitive neuroscience (ECN) is a new discipline that employs methodology from cognitive neuroscience to study, in vivo, the proximate mechanisms of putative evolved psychological/cognitive adaptations. The formalized discipline is less than five years old, but has already generated a plethora of research as well as extended our understanding of the evolved nature of the mind/brain. Here we briefly recapitulate the antecedents to an evolutionarily informed cognitive neuroscience, attempt to fit ECN into a broader evolutionary psychology framework that seeks to account for evolved adaptations to recurrent problems faced by our ancestors, and discuss the futures of this newly formed discipline by expounding on methodological techniques and theoretical accounts that may pervade our future. We believe, as the Nobel laureate Nikko Tinbergen has suggested, that a complete understanding of the evolved nature of behavior and cognition (i.e., evolved cognitive adaptations) can only come from investigations at both the proximate and ultimate levels and, thus here, we attempt to cast ECN as the proximate sister discipline to evolutionary psychology. When taken together these two disciplines have the potential to uncover how and why the mind works.     

Overconfidence,Investor Sentiment,and Evolution

We examine the survival of nonrational investors in an evolutionary game model with a population dynamic for a large economy. The dynamic indicates that the growth rate of wealth accumulation drives the evolutionary process. We focus our analysis on the survival of overconfidence and investor sentiment. We find that underconfidence or pessimism cannot survive, but moderate overconfidence or optimism can survive and even dominate, particularly when the fundamental risk is large. These findings provide new empirical implications for the survivability of active fund management. Our results lend support to the relevance of the psychology of investors in studying financial markets. Journal of Economic Literature Classification Numbers: G10, G14.     

Models, knowledge creation and their limits

Instead of modelling socio-economic situations as mechanical systems with fixed, predictable behaviour, we now see that socio-economic systems are really complex systems, in which various possible structural changes can occur giving rise to a range of different possible futures. This necessary future uncertainty automatically imposes an uncertainty on the precise pay-off that any particular action or decision that an agent may take. Because of this, the decisions that agents will make are also uncertain and this poses limits to our ability to model socio-economic systems and therefore to the knowledge that we can have at any time about the future. Because of this constant knowledge decay, what matters in real world situations of markets and business is the generation of new, current knowledge. Contrary to traditional science in which the natural laws are independent of who knows them, in social and economic systems, knowledge of system behaviour decays over time, and is in any case used up when it triggers new behaviour in the system. Several examples of evolutionary market systems are presented which demonstrate how knowledge is constantly created and destroyed, and the problem of change, innovation and design are shown to be part of a ‘boundedly rational’ view in which imperfect search gives rise to ‘good enough’ behaviour. All of this is a radical departure from the traditional approach that falsely believe in the optimisation of designs, behaviours and profits. Complexity tells us that we must accept risk and uncertainty and work loosely, keeping our options open as much as possible.     

How hardwired is human behavior?

Time and time again managers have tried to eliminate hierarchies, politics, and interorganizational rivalry--but to no avail. Why? Evolutionary psychologists would say that they are working against nature--emotional and behavioral "hardwiring" that is the legacy of our Stone Age ancestors. In this evolutionary psychology primer for executives, Nigel Nicholson explores many of the Science's central tenets. Of course, evolutionary psychology is still an emerging discipline, and its strong connection with the theory of natural selection has sparked significant controversy. But, as Nicholson suggests, evolutionary psychology is now well established enough that its insights into human instinct will prove illuminating to anyone seeking to understand why people act the way they do in organizational settings. Take gossip. According to evolutionary psychology, our Stone Age ancestors needed this skill to survive the socially unpredictable conditions of the Savannah Plain. Thus, over time, the propensity to gossip became part of our mental programming. Executives trying to eradicate gossip at work might as well try to change their employees' musical tastes. Better to put one's energy into making sure the "rumor mill" avoids dishonesty or unkindness as much as possible. Evolutionary psychology also explores the dynamics of the human group. Clans on the Savannah Plain, for example, appear to have had no more than 150 members. The message for managers? People will likely be most effective in small organizational units. As every executive knows, it pays to be an insightful student of human nature. Evolutionary psychology adds another important chapter to consider.     

'New security' risks and public educating: the significance of recent evolutionary brain science

The response to 'new security' risks requires significant changes in public behaviour, and the legitimization of unpopular government policies. Public Educating (public information/public education) is one means to achieve this. The need is reflected in initiatives such as environmental education, development education, health promotion, and the Public Understanding of Science. Current strategies are often based on commercial advertising, but mass communications theory does not directly encompass influencing perception , which is necessary to create awareness of the new 'invisible' risks. Recent evolutionary brain science is providing fresh and relevant insights into our species perception deficits, which can inform a more effective approach to Public Educating. This paper first places risk within the context of the post-Cold War 'global security' agenda. It proposes a theoretical framework - 'brain lag' - to explain perceptual deficits in relation to this agenda, which draws on theories of information, adaptation and denial, and an understanding of the human senses including time-scale-latency. Fundamental areas of evolutionary perception are proposed which are relevant across the agenda: fear and disgust, number perception, and cheating. This leads to a core concept for Public Educating about new security risks, 'enhanced difference', and a set of hypotheses that can be applied to text or image.     

Processing Fluency and Investors’ Reactions to Disclosure Readability

The SEC's emphasis on the use of plain English is designed to make disclosures more readable and more informative. Using an experiment, I find that more readable disclosures lead to stronger reactions from small investors, so that changes in valuation judgments are more positive when news is good and more negative when news is bad. Drawing on research in psychology to explain this result, I predict and find that processing fluency from a more readable disclosure acts as a subconscious heuristic cue and increases investors’ beliefs that they can rely on the disclosure. Although I do not find that more readable disclosures directly increase perceptions of management credibility, I do find evidence of an indirect effect operating through feelings of processing fluency. In supplemental analyses, I find that investors who receive more readable disclosures revise their valuation judgments to be less extreme when they are explicitly made aware of the potential for variation in readability. I discuss potential explanations for these revised valuation judgments.     

The environment and system-response capability

Just as the economic environment can be viewed as having evolved through three stages (perfect competition, imperfect competition, oligopoly), so the wider sociocultural environment has evolved. And each phase has its appropriate behaviour pattern, for individuals and for organisations. The author argues fthat we are now making the transition to a fourth, turbulent, type of environment. The conventional responses are no longer adequate, and indeed cause dissonances which lead to the loss of the stable state. The new environment requires a new response pattern.     

Tracing the American concept of stewardship to english antecedents

The contemporary American concept of stewardship is currently being criticised regarding its ability to meet the needs of a changing society. Some critics say that Americans have forgotten stewardship and some infer that it is missing or dead. This paper proposes that before we complete our speculation about the future of the concept of stewardship we need to consider its evolutionary history. A crossnational approach is used to locate the concept in its sociohistorical context. To this purpose, the paper traces the concept of stewardship from 13th century England to the modern American corporation. By identifying how it has evolved differently in America than it did in England, the paper concludes that the American concept is alive and viable in its own unique form. Questions regarding whether the American concept can survive in this form or how it might adapt in the future are left to future research. However, since accounting appears to be stewardship driven, researchers looking for a coherent legal/accounting theory of stewardship may find that evolutionary changes in the social and legal concept of stewardship subsequently lead to changes in accounting theory and procedure.     

Market uncertainty,market sentiment,and the post-earnings announcement drift

Post-earnings announcement drift (PEAD) which was first identified over 40 years ago seems to be as much alive today as it ever was. Numerous attempts have been made to explain its continued existence. In this paper we provide evidence to support a new explanation: that the PEAD is a reflection of the level of market uncertainty and sentiment that prevails during the post-announcement period. The overriding conclusion from our analysis is that both uncertainty and sentiment play a central role in determining investor behaviour and it is this behaviour that ultimately determines the pricing that is observed in financial markets.     

The unselfish gene

For generations, we have operated on the assumption that human beings are fundamentally selfish, and so we have built systems and organizations around monetary incentives, rewards, and punishments. That hasn't always worked very well. Now the tide is starting to turn. In fields such as evolutionary biology, psychology, sociology, political science, and experimental economics, researchers are seeing evidence that human beings are more cooperative and behave far less selfishly than we have long assumed. The success achieved by such collaborative offerings as Wikipedia, Craigslist, Facebook, and open source software has, in fact, a scientific basis. Dozens of field studies have identified highly successful cooperative systems, which are often more stable than those based on incentives. Moreover, researchers have found neural and possibly genetic evidence of a human predisposition to cooperate. Evolution may actually favor people who collaborate and societies that include such individuals. Organizations would be better off helping us to engage and embrace our generous sentiments rather than assuming that we are driven purely by self-interest. We can build collaborative systems by encouraging communication, ensuring that claims about community are authentic, fostering a feeling of solidarity, being fair, and appealing to people's intrinsic motivations.     

Dialogue and debate in a post-normal practice of science: a reflexion

Scientific activities are always embedded in the cultural matrix that gives purpose to the enterprise, and so we need to develop a rich and meaningful view of social reality. In doing so we realise that we all live different lives, but each of us can broaden our knowledge of the social world through dialogue with others. If scientific questions, which relate directly to society, were researched in a ‘dialogical' manner, ways would be sought to understand the concerned individuals, populations or stakeholders. While never rejecting concern for internal coherence and rigour, science can cope better with future uncertainties, and better solve the problems of those peoples that make up society, by extensively utilising social dialogue.     

Discussion of “The effect of task complexity and expert system type on the acquisition of procedural knowledge: Some new evidence”

Mascha [Int. J. Account. Inf. Syst. (2001).] hypothesizes that differences in task complexity between studies in accounting and psychology explain differences in their conclusions regarding the benefits of feedback in acquiring procedural knowledge. Overall, the work was done carefully and it contributes to our understanding of learning while using expert systems. I comment specifically in three areas. First, I comment on whether procedural knowledge, which cannot be expressed verbally, or simply knowledge is the construct of interest. Second, I pose some questions regarding how task complexity was operationalized and the implications of that operationalization for the conclusions. Finally, I propose an alternative experimental design that I find more complete, which would eliminate some alternative explanations for the results.     

Balanced wealth creation across cooperative economics

Cooperation is a necessary condition, along with competition, for the creation of wealth, innovation and knowledge. We briefly re-visit and critique certain neo-classical arguments in regards to pure competition and profit maximization that continue to be carried forward by current neo-liberal thought. We also attempt to illustrate the unbalanced and damaging outcomes of neo-liberal logic across the lens of enactment; as well as across our own discernment of holographic analogies to the individualism–collectivism dyad that exist within our complex environments. Within the spirit of evolutionary economics and complexity theory, early and more recent theoretical and empirical underpinnings for cooperation are presented, with the argument that it, combined with competition, leads to more well-balanced wealth creation—be it regional, national or global in character. Finally, we review competitive vs cooperative economic approaches across the lens of emergent complex systems. We then present two possible ‘future’ scenarios: one extreme outcome occurring as a result of truncating or de-balancing the individual vs collective dyad and its holographic analogies; while another outcome attempts to integrate a more inherent balance within these same dyads.     

Knowledge, limits and boundaries

In this paper the underlying concern is the problem of knowledge. How do we understand the world, what is ‘scientific’ knowledge, and to what extent is this knowledge limited by the fact that the world in which we live is complex? The problems associated with the status of our knowledge of the world have been central to philosophy all along. Here I will focus on the way in which the acknowledgement of complexity transforms some of the traditional conceptions of (especially scientific) knowledge. I will also examine the notions of boundaries and limits, arguing that these notions are not problems we have to get out of the way, but that they are inevitable as soon as we start talking of ‘knowledge’.     

The interdisciplinarity of evolutionary approaches to human behavior: A key to survival in the Ivory Archipelago

This paper explores the degree of interdisciplinarity of evolutionary approaches to the study of human behavior, and the implications that any such interdisciplinarity may have for the future of evolutionary psychology (EP) as a field of scholarship. To gauge the extent of interdisciplinarity of EP, the departmental affiliation of first-authors from 1000 journal articles evenly distributed across ten leading peer-reviewed psychology journals was assessed. Findings show that journals that are evolutionary-based have more first-authors from outside of psychology, and also include a wider variety of represented disciplines. These findings are discussed in terms of their influence on the future of EP, as a model for interdisciplinary research. EP's future will be successful if it continues to promote interdisciplinarity as well as recognize the epistemological worth of multiple evolutionary paradigms and frameworks. Evolutionary principles have been successfully applied to a broad range of topics, suggesting there is great utility in evolution serving as a common language for interdisciplinary pursuits within the behavioral and social sciences. As such, academic programs such as Evolutionary Studies (EvoS) programs, whose presence continues to increase across academic institutions worldwide, epitomize the future of successful interdisciplinary scholarly training.     

The science of thinking smarter. Interview by Diane Coutu

Advances in neurobiology have demonstrated that the brain is so sensitive to external experiences that it can be rewired through exposure to cultural influences. Experiments have shown that in some people, parts of the brain light up only when they are presented with an image of Bill Clinton. In others, it's Jennifer Aniston. Or Halle Berry. What other stimuli could rewire the brain? Is there a Boeing brain? A Goldman Sachs brain? No one really knows yet, says Medina, a developmental molecular biologist, who has spent much of his career exploring the mysteries of neuroscience with laypeople. As tempting as it is to try to translate the growing advances to the workplace, he warns, it's just too early to tell how the revolution in neurobiology is going to affect the way executives run their organizations. "If we understood how the brain knew how to pick up a glass of water and drink it, that would represent a major achievement," he says. Still, neuroscientists are learning much that can be put to practical use. For instance, exercise is good for the brain, and long-term stress is harmful, inevitably hurting productivity in the workplace. Stressed people don't do math very well, they don't process language very efficiently, and their ability to remember--in both the short and long terms--declines. In fact, the brain wasn't built to remember with anything like analytic precision and shouldn't be counted on to do so. True memory is a very rare thing on this planet, Medina says. That's because the brain isn't really interested in reality; it's interested in survival. What's more, and contrary to what many twentieth-century educators believed, the brain can keep learning at any age. "We are lifelong learners," Medina says. That's very good news indeed."     

Paradox,accounting values,and intelligible regulation

Expected utility theory, which includes estimating the probabilities of uncertain future outcomes, is the classical model for rational economic decision making, and, by implication, rational valuation and financial reporting regulation. In Wittgensteinian terms it is a ‘hinge’ of the language game in which these practices are embedded. When rendered explicit, however, this ‘hinge’ appears to be formally incoherent. The exploration of this problem has consequences for all of our arguments over the epistemological underpinnings of accounting reports – whether realist, representational, constructivist, or otherwise.Arguably, there are two complementary primitive models that underlie real-world probability estimation. Taken together, they generate a version of Goodman's inductive paradox (other versions of which also arise for non-inductive empirical generalisation). This, in its turn, is related to Kripke's paradox, which arises when we try to give behavioural accounts of rule following, and so of participation in a language game.This paper explicates this type of paradox in the context of commercial decision making, and considers its consequences. The existence of paradoxes should render the system that generates them completely incoherent, but (paradoxically …) they seem to be generated by any attempt to give complete accounts of some of the normative fundamentals which underlie linguistic practice – such as truth-telling, validity and rule-following.Whether or not these paradoxes represent a serious threat to the coherence of the empirical or behavioural sciences, it might be objected that commercial decision making methods and financial regulation rarely aspire to the kind of rigour that these disciplines attempt to achieve. Part of the argument of this paper will be that the intelligibility of commercial language suggests an approach to these paradoxes which is not obvious from more traditional philosophical perspectives.The intentionality of belief renders certain belief claims by participants in a shared language game incorrigible (within the game), in the sense that they can be doubted only by doubting the seriousness or quality of participation. If certain statements about rule following and word meaning have this same quality, then there is a way of avoiding the consequences of Goodman's and Kripke's paradoxes, and of sterilising the probability estimation paradox for any playable commercial language game.     

The hunger for meaning

The global crisis is a crisis of meaning — a search for story as to how we now understand the world. The search for new meaning is explored through the congruence and convergence in the insights of several authors from the secular world; four in particular, two of whom are from the business world. Technology and materialism have made us mercenaries with no commitment and responsibility to the collective future, to morality, and to society. They reflect the false life energies we pursue in our search for meaning. Our innate desire to seek meaningful connection with the living world and a transcendent purpose in the universe is compromised. Yet this purpose is essential for evolutionary survival where we engage with the interior, subjective dimensions of reality, not just in our personal but also in our collective lives. The modern concepts of stewardship and partnership help in that transformation, of ourselves and in our systems of governance, from command and control structures to interdependent structures.     

Moral economics

An adequate normative economics – one that is consistent with recent developments in our discipline (and in philosophy and psychology) and that resonates with widely held moral intuitions – will have to address the following challenges. First, utility cannot be both the basis of our predictions of economic behaviour and the evaluation of the outcomes of this behaviour. Second, we need to conceive of individual well-being and other desiderata in ways that are interpersonally comparable and that go beyond efficiency and fairness. Third, the representation of the economy as a ‘morality-free zone’ (requiring that contracts, including employment contracts, are complete) must give way to a recognition of the unaccountable exercise of power by private actors, even in a perfectly competitive equilibrium, and the way that this may violate democratic principles and limit the freedom and compromise the dignity of other actors. Fourth, the commitment to ‘liberal neutrality’ (thereby sidestepping the evaluation of preferences) and the related assumption of ‘unrestricted preferences’ in mechanism design and public policy must be abandoned, making room for a concern about the nature of our preferences and the ways that institutions shape our values.