Here There and Everywhere

City traders may be seeing patterns that ‘aren’t really there’

The mind naturally creates illusions and superstitions at times of stress – and this could be adding to the global financial crisis, say scientists.

US researchers say feeling “out of control” makes us more likely to misinterpret information as we search for signs of order.

The study in the journal Science found investment decisions of volunteers were adversely affected by these feelings.

Simple psychological techniques might improve their performance, they said.

The researchers, from the University of Texas and Northwestern University in Evanston, Illinois, believe that humans cope with feeling out of control by trying to impose order subconsciously – even in situations where there is none.

At a simple level, they demonstrated the principle by asking volunteers to look for images embedded in “snowy pictures”.

Those whose feelings of control had earlier been undermined were more likely to claim to have seen an image, even where none existed.

However, the researchers believe that other kinds of illusion, from conspiracy theories to superstitions, stem from the same basic subconscious problem, and that it may be contributing to the current havoc on the world’s financial markets.