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The behaviour of rats in a laboratory test tells us uncomfortably more about our behaviour as investors than we'd probably like to admit. Human beings are notoriously irrational when it comes to investing. Just how irrational we can be is illustrated by an experiment conducted using rats and then repeated using humans. The irrationality is also at the core of a new approach to investing for retirement.

In the experiment, scientists constructed a set of lights - one red light, one green light - and asked the subjects to predict what colour light they thought would light up next. Unbeknownst to the subjects, the lights were rigged, so the red light would light up 80 per cent of the time and the green light only 20 per cent of the time.

The rats worked this out pretty quickly. They learned that they couldn't predict with any reliability which light would come on next, but noticed that the red light came on more often. So they instinctively came up with a strategy of just picking red. Unsurprisingly, once they'd sorted this out, their success rate was 80 per cent. They were prepared to live with the pain (a mild electric shock if they chose wrongly) for the reward of being right (they received food if they chose correctly) 80 per cent of the time.

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AdvertisementThe human subjects, on the other hand, were too smart by half. They also recognised the red light came on more often, but continued trying to predict when the green light would come on, too. As a result they predicted the next light correctly on only 68 per cent of occasions, and were comprehensively beaten by their rodent counterparts.

This experiment is only one of dozens that serve to illustrate that humans have a propensity to act irrationally and make poor decisions.

Wouldn't it be who is smarter, as opposed to smartest?

...sorry, I couldn't help it

freakyalien wrote:Wouldn't it be who is smarter, as opposed to smartest?

...sorry, I couldn't help it

The ultimate escape by an island-hopping rat
By Richard Macey
October 20, 2005 - 10:19AM


Razza was the Susie Maroney of the rodent world.

A wild rat, captured and then released on a deserted New Zealand island as part of an experiment, he amazed scientists by taking to the sea to escape.

No one knows why, but Razza swam 400 metres through treacherous open water to reach another island.

His feat, loosely billed as a record, has also alarmed the scientists, who say it shows that coastal islands cleared of rats can easily be reoccupied. Mick Clout, Professor of Conservation Ecology at the University of Auckland, said yesterday Razza was taken to Motuhoropapa, a flyspot east of Auckland, for a study on how a rat behaves when alone on an island.

"We assume most rat invasions begin with one or two rats coming ashore, probably from ships," Professor Clout said.

Researchers wanted to know how hard it would be to spot a single invader, and how difficult it would be to capture.

Razza had a small radio transmitter attached and was set free on the island. Scientists intended to recapture him within eight weeks, but Razza gave a new meaning to "rat cunning".

He avoided all the scientists' traps, and after 10 weeks his radio signal failed. "It would be fair to say that at that point we were worried," Professor Clout said. The Conservation Department was also worried, as the island had been cleared of rats.

Two weeks after the transmitter failed a woman reported finding rat droppings on Otata, a rat-free island 400 metres from Motuhoropapa. DNA tests confirmed they were Razza's.

"To our knowledge this is the first record of a rat swimming across open sea, and it's often quite rough water," Professor Clout said. "We assume he did it deliberately, but who knows what was in his mind?"

He speculated that Razza may have wanted female company.

A trap on Otata finally ended Razza's four months of freedom, and his life. His adventures are detailed in today's Nature.

Charred mouse burns house
January 09, 2006

A MOUSE has wreaked revenge against a homeowner who tried to dispose of it in a pile of burning leaves - running ablaze back into the man's house and setting it alight.

Luciano Mares, 81, of New Mexico said he caught the mouse inside his house and wanted to get rid of it, reports AP.
"I had some leaves burning outside, so I threw it in the fire, and the mouse was on fire and ran back at the house," Mr Mares told AP from a motel room.

The burning mouse ran beneath a window of the house and the flames quickly spread throughout the house.

All the home's contents were destroyed.

Unseasonably dry and windy conditions have charred more than 21,000ha and destroyed 10 homes in south-eastern New Mexico in recent weeks.

"I've seen numerous house fires, but nothing as unique as this one," Fire Department Captain Jim Lyssy said.