ABSTRACT

The model of human cognition described gives a new vision of the role of intuition and analytics. The positive intuition of an experienced trader will reflect a detection of patterns whose characteristics have been cross-referenced with experience, leading his/her brain to recognize more positive than negative opportunities. In the world of finance where agents are in a race to make the best decisions, dismissing these intuitions would be dismissing a lot of potentially valuable input in the decision-making process. In the old dichotomies, mind/body and rationality/passions, a coldly rational decision maker can abstract himself/herself from the influences of emotions and visceral feelings to engineer good decisions. The complexity of financial decisions means that there are clear benefits from analytic tools. The key role of a brain is to make decisions, as only decisions have in the end an impact on the individual's fitness.