As I have already said, everyones been mainly, if not exclusively, focused on only two of the three dimensions of our psyches: thinking and behavior. Even the new field of behavioral finance has mostly gotten caught in this web of an exclusively cognitive-behavioral paradigm. The idea of the triune brain, in which emotions are left over remnants of an early evolutionary stage, is now rejected by the cuttingedge of neuroscience, but many academic behavioral economists appear unaware of this development occurring on the other ends of their campuses. Proponents of this relatively new behavioral view of decision making critique the appearance of mistaken decision shortcuts (heuristics) and phenomena like over-reliance on the recent past. But if we can remodel the experimental models to include the all-important concept of context, particularly emotional context, everything looks different. In fact, all the questions start to be answered, and the right model begins to fall elegantly in pl

Lose the serial computer-based idea of the brain and mind. Instead think more in terms of baking cookies or thunderstorms, both of which have a finite set of ingredients or elements but virtually an infinite number of ways that they can be combined to create an end result. And the outcome always depends on the contextwhat came right before to produce the end result. With cookies, it is the temperature of the oven. With thunderstorms, it is the exact way two air masses collide. Context is key. In terms of your brains development, it begins with a substrate of feeling and emotion. As infants, we know basically two broad categories of information, our mother as an object and how we feel. As children, we know a little bit more, but how we feel shapes how we learn language, math, and our self-concept. The latest in memory research, for example, shows that the more

This appears to be one of the mechanisms by which events from early in life impact us later. We may not consciously remember them, but levels in the unconscious appear to act as sorting devices. The emotion of the memory works as a built-in context. When the brain needs to search for a proper context for new experiences, the emotional tags of anything similar in ones experience come into play. In fact, emotional meaning now appears to be crucial to the initial steps operating in our visual cortex or, in other words, in the mechanics of eyesight, one of the most well-understood parts of the brain. So the bottom line is this: The most predictive element of context is