Andrew Lo: Bounded Rationality

Dr. Andrew Lo gave a talk at Saïd Business School. It is one of the most information rich lectures on market behaviour to individual decision making process. If you are interested in Dr. Lo’s work you will like this video. The lecture is 55 minutes long so be prepared.

One part of the lecture talks about the physiological effect of pain. It has important implications for traders. If you are affected by physical illness or traumatized by emotional issues, the lecture tells us that you are physically disabled in the brain where the area for making intelligent decisions is. This confirms what many good traders know – one has to be fit both physically and emotionally to stay in peak performance.

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