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Novelty, Stress, and Biological Roots in Human Market Behavior

Institute of Immunology and Physiology (IIP) of the Ural Division of Russian Academy of Sciences, 106 Pervomaiskaya str, Ekaterinburg 620219, Russia
Author to whom correspondence should be addressed.
These authors contributed equally to this work.
Behav. Sci. 2014, 4(1), 53-69;
Received: 19 December 2013 / Revised: 23 January 2014 / Accepted: 27 January 2014 / Published: 14 February 2014
PDF [244 KB, uploaded 14 February 2014]


Although studies examining the biological roots of human behavior have been conducted since the seminal work Kahneman and Tversky, crises and panics have not disappeared. The frequent occurrence of various types of crises has led some economists to the conviction that financial markets occasionally praise irrational judgments and that market crashes cannot be avoided a priori (Sornette 2009; Smith 2004). From a biological point of view, human behaviors are essentially the same during crises accompanied by stock market crashes and during bubble growth when share prices exceed historic highs. During those periods, most market participants see something new for themselves, and this inevitably induces a stress response in them with accompanying changes in their endocrine profiles and motivations. The result is quantitative and qualitative changes in behavior (Zhukov 2007). An underestimation of the role of novelty as a stressor is the primary shortcoming of current approaches for market research. When developing a mathematical market model, it is necessary to account for the biologically determined diphasisms of human behavior in everyday low-stress conditions and in response to stressors. This is the only type of approach that will enable forecasts of market dynamics and investor behaviors under normal conditions as well as during bubbles and panics. View Full-Text
Keywords: stress; novelty; behavior; crises; markets stress; novelty; behavior; crises; markets
This is an open access article distributed under the Creative Commons Attribution License (CC BY 3.0).

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Sarapultsev, A.; Sarapultsev, P. Novelty, Stress, and Biological Roots in Human Market Behavior. Behav. Sci. 2014, 4, 53-69.

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