So what does it take to be a good trader?

A new study from Switzerland has taken a look at the behavior of 28 financial traders in a decision-making game and concluded that, as a group, they exhibited strong psychopathic behavior. They were prone to lying and cheating and were even more uncooperative, egocentric and stubborn than psychopaths.

The medium here was the classic Prisoners' Dilemma game, which you know all about.

"The outcome seems to indicate that bank traders are even more prone than psychopathic individuals to rely on strategies that do not optimize their own total profit but considerably harm the profit of their gaming partner. Healthy controls achieved the same profit on their own part as traders and psychopaths but used a strategy that led to an equal profit of their partner and hence led to the highest overall profit, whereas the lowest overall profit was achieved by the traders."

So this would suggest that classic psychopathic behavior may not be profit-maximizing behavior, but this is all a bit subtle--most likely for people making the hiring decisions. The study makes clear that traders are not "card-carrying" psychopaths and it certainly does not advocate locking them up. We'll pick up on this theme in another post soon.  

For more:
- here's an article from MSNBC.com

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