Mood in foreign exchange trading: Cognitive processes and performance

This paper examines the effects of mood on the behavior of traders or decision makers in financial markets. Based on a review of the psychological theories and empirical findings which relate mood to decision making and information processing, we derive hypotheses with respect to the impact of good, neutral, and bad moods on the behavior of traders. Two experiments (N=66 and 72) were conducted on an Internet platform which simulated foreign exchange trading based on historical market data. The first experiment manipulated mood using feedback and music whereas the second one asked subjects to read mood-laden statements. It was found that traders in a good mood had an inferior trading performance (losing money) compared to those in a neutral or bad mood (making profit). This is because traders in a good mood made less accurate decisions than those in neutral or bad moods. Those in a bad mood were the most accurate in their decisions but behaved conservatively in their trading. Subjects in a good mood tended to make less accurate decisions though they spent on average at least the same time as the other subjects on information processing and decision-making. They also were over-confident taking unwarranted risks. The studies concluded with insights concerning the effects of mood on choice of trading strategies.     

Dynamic processes in music perception

A schema-based theory of music perception that describes the dynamic interaction between the musical event and the listener’s knowledge of the underlying regularities in tonal music is proposed. Three properties of musical schema are evaluated in a recognition memory experiment: (1) The schema engages a subset of the abstract knowledge system that is determined by the predominant key of the musical sequence, (2) the schema evaluates both interval relations and the functions of the sounded elements within the established tonal framework, and (3) the schema interacts continuously with the musical event in time to process pitch information in its temporal context. Listeners are required to identify the serial position of a chord that is changed between two successive chord sequences that are otherwise identical. The experiment measures the magnitude and the temporal extent of the disruptive effect of including in the sequence an element outside the tonal framework. The results show temporally specific effects on memory for pitch relations consistent with the operation of a musical schema. Comparisons are made with schema-based theories applied in other perceptual and cognitive domains.     

Cognitive and somatic anxiety and self-confidence in athletic performance of beach volleyball

This study considered the influence of competitive anxiety and self-confidence state responses upon athletic performance. 66 male beach volleyball players completed the translated and modified Competitive State Anxiety Inventory-2 which included the original intensity scale and a direction scale of Jones and Swain. Players' performance was scored from the video records using a standard rating scales. Correlations indicated scores on Direction subscale of modified Competitive State Anxiety Inventory-2 and Self-confidence were moderately positively (r=.27 to .51) correlated with different skill components and sum of skill components of beach volleyball. Stepwise multiple regressions indicated that, as anticipated, directional perceptions of cognitive and somatic anxiety and self-confidence were significant predictors of beach volleyball performance but accounted for only 42% of variance. Original Intensity subscales of somatic and cognitive anxiety did not predict performance. Findings support the notion that direction of anxiety responses must be taken into consideration when examining anxiety-performance association in sport.     

Cognitive processes in social anxiety: the effects of self-focus, rumination and anticipatory processing

We examined three cognitive processes hypothesized to contribute to biases in judgments about and memory for social events: self-focused attention, post-event rumination, and anticipatory processing. Socially anxious (N = 58) and nonanxious (N = 58) subjects participated in a social interaction and then completed measures of self-focused attention and anxiety-related physiological sensations and behavior. The next day, subjects completed measures that assessed frequency of post-event processing and recall of the interaction. The results indicated that selective attention to negative self-related information led to biases in social judgments and recollections and that post-event processing contributed to the recall of negative self-related information. No evidence was found for selective retrieval of negative self-related information prior to a second social interaction. The results reconcile inconsistent previous findings related to memory bias in social anxiety.     

Cognitive processes in extinction

Human conditioning research shows that learning is closely related to consciously available contingency knowledge, requires attentional resources, and is influenced by language. This research suggests a cognitive model in which extinction consists of changes in contingency beliefs in long-term memory. Laboratory and clinical evidence on extinction is briefly reviewed, and it is concluded that the evidence supports the cognitive position. There is little evidence for a separate, noncognitive conditioning system. The primary implication for neural analysis is that learning and extinction are unlikely to be reducible to direct connections in which one stimulus simply activates or inhibits the memory representation of another. Rather, an adequate neural model will involve the integration of both low-level and high-level systems, including attention, representation of stimulus relations in long-term memory, and a dynamic performance mechanism based on anticipation, not just activation.     

Cognitive functioning and anxiety

Summary Various possible differences in cognitive functioning between those high and low in trait anxiety are considered. Particular emphasis is paid to the hypothesis that individuals high in trait anxiety tend to approach threatening stimuli, whereas those low in trait anxiety tend to avoid such stimuli. The evidence indicates that there are such differences in the processing of threatening stimuli as a function of trait anxiety. However, these differences are found only under certain conditions, for example, when threatening and nonthreatening stimuli are presented concurrently, and when minor rather than major threat is involved.The differences between those high and low in trait anxiety encompass pre-attentive, attentional, and interpretative mechanisms. As a consequence, any adequate theory of trait anxiety must take proper account of cognitive mechanisms and functioning.     

Individual differences in music performance

Music cognition depends on the existence and deployment of processes for detecting, storing and organizing musical materials according to underlying structural features. Common cultural experiences develop these processes to a certain degree, but specifically designed and supported learning environments are required to achieve the levels of expertise required to perform western art music. Certain motivational and social factors are therefore implicated in the maintenance of activities that promote skill-acquisition, such as practice. Expert musical performance is not just a matter of technical motor skill, it also requires the ability to generate expressively different performances of the same piece of music according to the nature of intended structural and emotional communication. This review examines these abilities and describes how some of them have been shown to have lawful relationships to objective musical and extra-musical parameters. Psychological research is thus engaged in a process of demystifying musical expertise, a process that helps to improve upon culturally prevalent, but ultimately non-explanatory, notions of inborn 'talent'.     

Cognitive and somatic anxiety

Three hundred and forty adults (including sports players, recreational exercisers, mediators and sedentary controls) completed three inventories purporting to measure cognitive and somatic aspects of anxiety. These were the Cognitive-Somatic Anxiety Questionnaire (CSAQ) devised by Schwartz, Davidson & Goleman (Psychosomatic Medicine, 40, 321-328, 1978), the Worry-Emotionality Scale (WES, Morris, Davis & Hutchens, Journal of Educational Psychology, 73, 541-555, 1981) and the Lehrer-Woolfolk (1982) Anxiety Symptom Questionnaire (LWASQ). Factor analysis of the CSAQ and WES identified distinct cognitive and somatic anxiety factors in both inventories. Higher somatic than cognitive ratings were recorded on the CSAQ and WES, while the pattern was reversed on the LWASQ. The CSAQ can tentatively be recommended as a useful measure of these two anxiety components. We were unable to confirm an observation made previously in the literature that practice of meditation is associated with reduced cognitive anxiety, or that exercise is linked with lower somatic anxiety.     

Cognitive processes in verbal-number production: inferences from the performance of brain-damaged subjects

This article presents a model of the cognitive processes involved in the spoken production of verbal numbers (e.g., thirteen thousand four hundred two). On the basis of single-case studies of two brain-damaged subjects with number production deficits, we argue that verbal-number production involves the generation of a syntactic frame that constitutes a plan for the production of the appropriate sequence of words. The syntactic frame specifies each to-be-retrieved word in terms of a number-lexical class (i.e., ones, teens, or tens) and a position within that class. These class/position-within-class specifications guide the retrieval of lexical representations from a production lexicon that is partitioned into functionally distinct ones, teens, and tens classes. We conclude with a brief discussion of the rationale for, and advantages of, using patterns of impaired performance as a basis for drawing inferences about normal cognition.     

Individuals and dyads in a multiple-cue judgment task: Cognitive processes and performance

Virtually all studies of multiple-cue judgment focus on the learning by individuals. In a multiple-cue judgment task the authors examined if people acquire rule or exemplar knowledge as a function of learning the task alone or in dyads. Learning in dyads was expected to promote explicit rule-based thinking as a consequence of verbalization (social abstraction effect) and to improve performance due to the larger joint exemplar knowledge base (exemplar pooling effect). In two experiments the results suggest more accurate judgment by dyads, evidence for an exemplar pooling effect, but no evidence for the social abstraction effect. In contrast to most previous research, social interaction proved beneficial and allowed the dyads to surpass their combined individual performance.     

Cognitive processes operating in hindsight

The aim of this investigation was to study the cognitive processes involved in the "knew-it-all-along" effect, especially in regard to use of inferential processes. The results of three experiments showed that the magnitude of the phenomenon did not increase with more use of inferential processes. It is proposed that only under misleading circumstances do inferential processes associated with overconfidence increase the magnitude of the phenomenon. For a majority of the tasks introspectively classified as solved by pure guessing, the hindsight phenomenon entirely disappeared whereas "intuition" tasks lead to the strongest bias. The results are generally consistent with the accuracy-assessment model (A. Winman et al. , 1998).     

Cognitive change processes in psychotherapy

Several types of cognitive-behavioral therapy are now practiced that use different sets of theoretical concepts and propose different kinds of change mechanisms. None, however, is directly grounded in experimental research in cognitive and social psychology, and few address basic issues such as the relevance of conscious versus nonconscious cognitive processes and the validity of the self-report data on which therapy depends. Put forward in this article is a model that describes the conscious and nonconscious processing of emotional stimuli and distinguishes between knowledge that is verbally accessible and knowledge that can only be recovered by exposure to situational cues. Also proposed are three mechanisms of cognitive change that involve altering verbally accessible knowledge, the accessibility of nonconscious situational memories, and self-regulatory strategies. These mechanisms are related to the current practices of behavioral and cognitive-behavioral therapists.     

Cognitive determinants of lactate-induced anxiety

The effects of lactate infusion on subjective mood change were studied in two differently instructed groups, in a double-blind, placebo-controlled, cross-over study. Ss who were told that infusions would produce anxiety reported a significant change in the expected direction after lactate but not after glucose. Ss who were told that infusions would produce a state of pleasant excitement showed no change after either infusion. The possible role of cognitive parameters in experimentally-induced anxiety is discussed.     

Computer graphics in music performance research

Theories of skilled music performance must account for variations on what is written in traditional musical notation. Some variations are intentional and reflect structural features of the music that are chosen for emphasis by the performer. Current music notations are inadequate to reflect these variations. Computer applications are described that allow graphical and statistical examination of performance variations on traditional musical notation. An integrated set of visual and sound tools is provided that allows music to be recorded, edited, analyzed, and played back on electronic and acoustic musical instruments. The graphical format allows flexibility through the use of windows, compression, expansion, and scrolling of multiple sources of information, mapping of acoustic to visual dimensions, and scaling of different performance parameters without normalization. Experimental evidence from piano performances is used to demonstrate how graphical formats can aid research on human performance.     

Cognitive processes in evaluating reference letters

This study simultaneously evaluates confirmatory information search theory and dual‐process theory in a selection process that uses reference letters as the evaluation tool. Confirmatory information search suggests that evaluators give attention to information that is congruent with first impressions. Dual‐processes theory suggests that evaluators give attention to information that is incongruent with first impressions. Using a sample of undergraduate students, in two separate experiments, we found that a poor impression from the résumé led to more positive information and less negative information searching in reference letters than did a good impression. These results of both experiments suggest that reference letter evaluators are likely to use cognitive processes associated with dual‐process theory. Copyright © 2008 John Wiley & Sons, Ltd.     

Cognitive representations and processes in arithmetic: inferences from the performance of brain-damaged subjects.

In this article, we present data from two brain-damaged patients with calculation impairments in support of claims about the cognitive mechanisms underlying simple arithmetic performance. We first present a model of the functional architecture of the cognitive calculation system based on previous research. We then elaborate this architecture through detailed examination of the patterns of spared and impaired performance of the two patients. From the patients' performance we make the following theoretical claims: that some arithmetic facts are stored in the form of individual fact representations (e.g., 9 x 4 = 36), whereas other facts are stored in the form of a general rule (e.g., 0 x N = 0); that arithmetic fact retrieval is mediated by abstract internal representations that are independent of the form in which problems are presented or responses are given; that arithmetic facts and calculation procedures are functionally independent; and that calculation algorithms may include special-case procedures that function to increase the speed or efficiency of problem solving. We conclude with a discussion of several more general issues relevant to the reported research.     

Conceptual and motor learning in music performance

Are the mental plans for action abstract or specified in terms of the movements with which they are produced? We report motor independence for expert music performance but not for novice performance in a transfer-of-learning task. Skilled adult pianists practiced musical pieces and transferred to new pieces with the same or different motor (hand and finger) requirements and conceptual (melodic) relations. Greatest transfer in sequence duration was observed when the same conceptual relations were retained from training to transfer, regardless of motor movements. In a second experiment, novice child pianists performed the same task. More experienced child pianists showed transfer on both the motor and the conceptual dimensions; the least experienced child pianists demonstrated transfer only to sequences with identical motor and conceptual dimensions. These findings suggest that mental plans for action become independent of the required movements only at advanced skill levels.