(Reuters) When John Coates was on a winning streak during his days as a trader at Deutsche Bank and Goldman Sachs, the narcotic-like "high" he experienced was so powerful he was determined to find out more. So after 13 years on trading floors on Wall Street he moved to the neuroscience labs of Rockefeller University in New York and of Britain's Cambridge University.
Here, the trader turned neuroscientist has been bent on uncovering the brain biology behind that high, what it did to him, and what it's probably doing to those he left behind. What he's come up with, after several years reading up on animal studies and some interesting experiments with spit, is that risk taking is driven by a "winner effect" - a hormonal mechanism in which each competitive victory leads to more wins. "The narcotic high was as powerful as anything I have ever felt," Coates said in an interview during a medical conference in London, describing the experience of making huge profits and big bonuses at some of the world's largest banks.
And as other experts in psychiatry and neuroscience at the conference agreed, the consequences of a winner effect gone out of control can lead some to become power-corrupted politicians, cruel military dictators and even surgeons who like to play god. "You become euphoric, delusional, you have less need for sleep, you have racing thoughts, an expanded appetite for risk, and less stringent requirements in the risk and reward trade-off," said Coates. "Basically, you become a rogue trader."
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