The Grim Truth Behind the ‘Winner Effect’

Trading is often about how to take the appropriate risk without exposing yourself to very human flaws.
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Euler
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Why do winners keep on winning? Two recent studies examine the neurobiology of aggression

https://www.wsj.com/articles/the-grim-t ... 0?mod=e2tw

Scientific research often generates obscure little factoids, and two recent papers on an obscure little part of the brain seem to fit that mold. When you look more closely, however, the research reveals something grimly pertinent about the neurobiology of aggression.

The findings concern a phenomenon familiar to anyone who has ever won or lost a contest. Winning, it often seems, increases the odds of subsequent winning, while losing does the opposite. Talent and skill are factors, of course: It makes sense that individuals who frequently win at something probably do so because they’re good at it.

But the “winner effect” is subtler than that. Even in situations that are manipulated to guarantee a winner, the victor’s odds of winning thereafter go up. For example, two male mice, first encountering each other, typically fight. If a male previously won a fixed fight—a confrontation, say, with a smaller, mildly sedated mouse—he’s more likely to win his next fight with another mouse.

Previous research has given insights into how these effects work in males. (Research involving females is thin, unfortunately.) From stockbrokers to fish, winning boosts the secretion of testosterone and suppresses stress hormones like cortisol. This increases confidence and risk-taking, and it changes the biochemical makeup of pheromones, even making the winners smell intimidating. Losing has the opposite endocrine effects. It prompts subordination behavior, risk aversion and the production of fear pheromones—which function as a kind of olfactory “kick me” sign.

The two recent papers explore the neurobiology of winner and loser effects. Writing in the journal Science, Ming-Yi Chou of Japan’s Riken Brain Science Institute and colleagues studied zebrafish, who fight when first paired, circling and biting each other until one fish flees. The authors investigated a brain region called the habenula.

When they used fancy molecular techniques to silence one habenular circuit, fish were more likely to lose an initial fight and less likely to show a winner effect if they did win. Silencing an opposing habenular circuit brought had the opposite result, producing the familiar set of winners’ behaviors.

Then came a paper in the journal Nature from Sam Golden of the Mount Sinai School of Medicine and colleagues, studying aggression in mice. These involved scenarios of two males initially encountering each other, which typically produces fighting.

The scientists showed that the habenula mediates the learning that arises from these interactions. Dominant animals who successfully attack strangers, boosting testosterone and blunting stress-hormone levels, are positively reinforced by the experience—they develop a “conditioned place preference,” choosing to return to the location where the fighting occurred. By contrast, subordinate animals develop conditioned place avoidance. The researchers found that patterns of habenular activity determine whether preference or avoidance emerges.

Crucially, the habenular switch was regulated by inputs from a brain region involved in reward and anticipation. Win a fight, and the reward circuitry prompts the habenula toward positive associations with the experience. Lose a fight, and the opposite occurs. This is the neurobiology of why winning feels so good, producing the motivation to seek out more chances to compete.

And humans? Our brain circuitry probably works the same way, given how ancient the biology appears to be in evolutionary terms.

I enjoy winning as much as the next guy when it comes to, say, a game of Chutes and Ladders. But these studies have a grimmer implication. They help to explain a truth that applies across the animal kingdom: Acts of aggression against someone smaller and weaker can be stress-reducing and deeply pleasurable. And that is not good news for underdogs, whether they are fish, mice or humans.
Jukebox
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Joined: Thu Sep 06, 2012 8:07 pm

Very interesting. One should also though watch out for the feeling of invincibility when when one becomes a persistent winner, feeling invincible still doesn't make you invincible.
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