In the Spring of 2012, a team of researchers at the universities of Cambridge and Sussex in the United Kingdom sought out a rather exceptional cohort of participants for an experiment — hedge fund traders in the City of London, one of the world’s financial capitals. These 18 financiers, all men, practiced a vertigo-inducing form of the craft, making trades in seconds or minutes, or, in more long-term deals, over a period of hours. It’s up to the trader to infer patterns on the fly; make sense of huge amounts of rapidly shifting data; and, as the researchers note, make major decisions in a matter of seconds. What’s more, their compensation was structured so as to maximize individual responsibility — there was no end-of-year, firm-wide bonus; instead, traders were paid in proportion to their trading success. And while a given trader could make a ton of money based on his individual performance — approaching £10 million (approximately $13 million) — in a single year, he could also be bounced out of a job quickly.
Compounding these factors, the researchers came to them at the close of what’s come to be known as the European sovereign debt crisis, where, in combination with the wider global financial crisis, countries on the periphery of the Eurozone economy were tottering toward collapse, with a country like Greece going into extreme national debt. All this is to say that the jobs of these traders were extremely demanding; extremely lucrative; and happened to be, at the time of study, in an extremely volatile state. So the researchers asked them to listen to their hearts.
First, each trader was asked, while sitting silently, without touching his chest or his wrist or anywhere else where the pulse is palpable, to count how many heartbeats he had over short lengths of time — 25, 30, 35, 40, 45, and 50 seconds — done in a random order. All the while, a monitor was record- ing his heart rate, thereby allowing the researchers to compare the trader’s perception of his heart rate to the actual number of beats in a given period. After each of the trials, the trader then rated how confident he felt about his estimates, from their being total guesses to having complete confidence in their accuracy. Following that, the trader then carried out an auditory version of the test, listening to tones that were either synced with his heartbeat or came at a delay. After each round, he was asked if the tones were synchronized or not, repeating the process for a total of 15 rounds. The researchers also gathered the traders’ ages and how long they’d been trading, as well as a standard metric of business success — their individual profit and loss statements, which score how much money they made or lost in a given year. The researchers did the same tests on an age-matched group of nontrader men drawn from the University of Sussex.
The traders, the researchers found, were far better at reading their own heartbeats than the laypeople from the university.* What’s more, among the traders, being more accurate was linked to greater profitability. Accuracy in heartbeat detection was also predictive of how long a trader had survived in the financial markets. Perhaps most intriguingly, as a group the experienced traders were much more accurate at detecting their heartbeats than were the beginners. And while the accuracy of the heartbeat sensing was predictive of performance, a given participant’s confidence about how they did on the accuracy test didn’t matter at all. “Our results suggest that economics and the behavioral assumptions upon which it rests, will benefit from a greater involvement with human biology,” the researchers wrote in the close of the paper. “Today there is a debate between, on the one hand, classical economists who argue that economics has no use for the findings of psychology and neuroscience, and on the other, behavioral economists who do draw lessons from these experimental sciences. What has been missing from this debate is evidence concerning the role of somatic signals, in other words, the body, in guiding our decision-making and behaviour and, crucially, our risk-taking.”
* For each participant, a heartbeat accuracy score (HS) was computed. For each trial: HS= 1–[|nbeatsreal—nbeatsreported|] / [(nbeatsreal—nbeatsreported)/2]. This score was averaged across trials and participants.
The researchers were interested in a perceptual process called interoception, or how people sense their own internal states. It’s an interoceptive signal at work when you realize that your stomach is full and you should stop eating or that your bladder is full and you need to empty it. Interoception tends to operate in the background of your awareness unless something needs to be acted upon — it’s unlikely you’re noticing digestion until indigestion hits. (There are exceptions. As a runner, Drake has, over time, gained a finer-tuned sense of the progress of his digestion, so that meals and runs can be timed for maximum fuel and minimum load, with trotting out for a jog around three hours after eating). More generally, we don’t often notice that our internal body is being continuously sensed unless something is amiss, like becoming nauseous or exhausted. Interoception is sensing turned inward; at all times, receptors from your tissues and organs are sending signals up to the brain, including from the heart.
Not unlike how visual experience isn’t the sole domain of the eye, thinking is not all in your head. To wit, every time the heart beats, it activates pressure-sensitive neural receptors in the heart, which detect and send signals about heart functioning to the brain. At all times, the brain is in dynamic communication with the heart, other organs, and the rest of the body. “Every moment, our brains are representing the activity of different organs,” says study co-author Sarah Garfinkel, a professor of psychiatry at Sussex. “This can serve to influence how we think and feel about the world. For me, this marks a shift in how we approach neuroscience traditionally, to take a more embodied perspective, to see the brain as embedded within the body.”
The traders in Garfinkel’s study are sensing their internal milieu as it shifts in response to the perceived movement of the market. These “gut feelings” are taken as a good/bad evaluations of market trends. In earlier chapters, we saw the same pragmatic principle at work with perceiving the slope of hills: if you’re well resourced, the hill looks easier to ascend. A hill looks inviting or foreboding, and so does a stock purchase. Perception guides action.
Garfinkel has investigated interoception in a range of contexts. She’s found that the bigger the gap between someone’s confidence in reading their heartbeat and their actual performance on heartbeat self-measurement tests, the more anxiety they feel in everyday life. The takeaway: being disconnected from your body can lead not only to worse decisions but also to greater anxiety. That also suggests that interoception may be a possible access point for addressing anxiety and related issues: training people to attend to their body’s internal signals has been shown to increase interoceptive accuracy, including the accuracy of self-assessments of blood-glucose levels in patients with type II diabetes. The implication: the more attuned you are to your bodily states, the better the decisions you’ll make, whether it’s purchasing stocks or taking care of your health.
