by Matti Bergström and Pia Ikonen, 2006
(a chapter to the book ”THE ECONOMIC BRAIN” – all rights reserved)
V. PREDICTION OF MARKET BEHAVIOUR
The observer. As shown above, the Self of a human observer consists of a complex fractal 3-dimensional space in the human mid-brain, with the imaginary number dimension (i) showing the input from the deep brain stem, the Child-brain. The real number dimension (r) shows the input from the Neocortex, the Mans-brain, and the real number dimension (p) shows the input from the Limbic system that can be considered as tightly connected with the Womans-brain.
The (p,i,r)-space is a complex number space where complex dynamics applies, describing the dynamics of thinking. The thinking consequently contains elements of outer physical environment (r, that we ”know”), inner subjective values (i, that we ”believe”) and emotional feelings (p, that we ”sense”). In this, thinking seems to plan for motor behaviour of the individual, as proposed by Cotterill. So our actions take into account the environmental situation, our inner values, and our emotional fantasy of possibilities that combine with the situation we are in.
With this in mind, we can look at a situation of an economic unit, an entrprise, acting in the global market, observing its state in order to expand with success in this new world wide economic field. The old routines, based on national economy, do not, as such, seem to apply anymore. New methods have to be used urgently because of the stagnation of the economic development of the enterprise. For this the leaders of the company have to look at the resources available for a penetration to the global market. Everywhere is going on a new kind of dynamics in this market, with frequent bying and selling of different kinds of firms and production units.
What is needed here, the enterprise being in this situation, is an application of a TRANSITION MANAGEMENT. There are many theories of how such a management should be performed (see e.g. Ulrich Dave: Human Resource Champions", 1996). But one thing is sure: this management needs after all an effective use of the brains of the company! And there is a lack of this kind of brain theories. It is this we will consider in this chapter: what kind of resources are available in our brain, in order to cope with transistions in our situation in the environment?
Resources of the brain. We have earlier (Bergström 1969, 1986, Bergström and Ikonen 2004) presented a system model of brain, with a chaotic core and an ordered outer envelope. The chaotic signal streams from the core brain stem and the ordered signal streams from the outer cortex meet in the limbic mid-brain, the neuro-mental Self, forming the (p,i,r)-space in which the observation and thinking of the individual occures. The basic resources of the brain for actions in the environment in order to fullfil the inner needs, are those appearing in the (p,i,r)-space in form of enthusiasm containing inner values (i-dimension), knowledge of the outer situation (r-dimension) and seeing possibilities in the situation (p-dimension). These resources can be channeld through thinking to individuals behaviour in the environment.
In this manner the behaviour contains creative ideas, born in the chaotic Child-brain, evaluations stemming from the same source, and possibilities that arise from the collision of chaos and order in limbic Self. It also contains intuitive visions that stem from the early embryonal brain, and can be considered as a sign of our third intelligence, the virtual intelligence (VQ), that we have in addision to the logical intelligence (IQ) and the emotional intelligence (EQ). Since the embryon lives in the uterine fluid being relative weightless and having no knowledge or experience of the gravity, its intelligence (VQ) is not based on any material, planetary relations or concepts. The behaviour of the individual also contains sensory information stemming from outer environment, that the thinking treates with the logical intelligence (IQ), and emotional feelings from limbic sources being treated with the emotional intelligence (EQ).
All these resources are available to a thinking individual in his/her Self in the brain´s (p,i,r)-space.
Use of brain´s resources. The (p,i,r)-space of the human brain is a complex number space, by virtue of the imaginary i-dimension. It can be treated as a Mandelbrot type of a fractal space, where the Julia equation applies
(1) Zo^2 + C = N
This equation can be used in its iterative form to describe the dynamics of thinking, letting C be the signal from the environment and Zo the immediate conscious answer of the individual. The iterative steps underlying the conscious answer can be consirered as going on subconsciously since the individual, receiving the outer signal, is not aware of them. For this we have developed a program (Ikonen and Bergström 2005), showing how different types of individuals respond with their thinking to different kind of signals (eg. propositions or other kind of stimuli).
It is now possible to use this program (that we call Julia-program) for situations of enterprises in the market. Hereby we are letting a sudden nonpredictable message from the global market invade the brain´s (p,i,r)-space – let it be the brain of the MD of the company – and register the brain´s conscious answer to this message. Then we can have the coordinates for C (the signal from market) and for Zo (the conscious thought, answer) in the space of the Self of this MD. The coordinates are determined by the amount of information (r-coordinate), amount of values (i-coordinate), and possibilities (p-coordinate) contained in the message and the answer. Whatever the conscious thought (Zo) is, we can read from the underlying subconscious steps of the iteration of the Julia-equation, what kind of subconscious processes it was that were leading to the conscious answer Zo The relation between conscious and subconscious processes in brain is treated by Libet.
The same procedure can be applied to a situation where the manager informs the personel of the company about his opinion of the market signal, the message. It is also possible with the program to detect the hidden subconscious background thinking of a concurrent enterprise, that reacts to a signal from the market officially. The real background of the official reaction can be something quite else than the official reaction.
The result of the use of the Julia-program is easy to understand, in that we have translated the coordinates of the iteration of the equation in a semantic form, using concepts describing the p-, i-, r-dimensions.
Predicting changes in market. Since the subconscious thinking is able to solve problems which we are not able to solve consciously (eg. in dreams or during sleeping), the Julia equation can be used to predict changes in the market better than logical conscious reasoning.
In the following is presented a case where the signal C from the global market is: ”There is coming a war”. The coordinates of C are: r = -O.5, i = 0.5, p = -0.5. For MD ”A” the coordinates of Zo are r = -0.5, i = 0.5 and for MD ”B” the coordinates of Zo are r = -0.5, i = -0.5.
We can read from the semantic result that the MD ”A” thinks consciously: ”I don´t see much possibilities and I don´t know much of it, but I believe. But now I feel confused and blackout”. The subconscious thinking goes on in the same manner and we can see from the complex vector movement that the thinking of this MD ”A” goes on in circles in the (p,i,r)-space in the quadrant (-r,+i), which shows that he is not coming to any clear result how to manage the situation for the best of the company (see picture).
Now, if this MD ”A” goes on and reports to a worker in his firm, what he thougt consciously about the message from market (see above), then the expression ”But now I feel confused and blackout” gives the worker the signal C with the coordinates: r = - 0.5, i = - 0.5. The negative value i = - 0.5 results in the workers brain with a subconscious thinking that leads to confusion and blackout (see picture). This can lead to a chain of signals from brain to brain in the company, with a confusion all over among the personel. Such a company can not defend itself in a critical situation in the market.
From the semantic result for the MD ”B” we can read that he thinks consciously: ”There are tremendeous amounts of possibilities and I know a lot about the thing and I believe”. His subconscious thinking ends with ”I know everything about it and I believe fully”. We can see from the vector movment that the thinking of this MD ”B” ends in the quadrant (+r, +i), that we call the quadrant of Understanding, since it contains all outer information and own values (that here are the values of the company). For a while this MD ”B” hesitates (step Z2) in not being sure about knowing what the signal of war means. The semantic content of this subconscious thought is: ”There are no possibilities and I don´t know anything, but I try to believe – and I begin to understand it”. But then the subconscious thinking continues to the Understanding of the situation.
We can see from these two examples how the MD ”B” is able to predict the message from the market and the MD ”A” is not. Our program can be used for different types of thinking and different kind of signals and messages from the market. It has to be noted that Benoit Mandelbrots formula for the prediction of market changes also is based on fractal complex mathematics. But in our case we can base the results on the use of well known resources of the human brain. To these belong not only the conscious but also the subconscious mental abilities and resources that stem from the Child-brain and the embryonal brain (with its virtual, intuitive intelligence). These resources can also be trained in different kind of companies, so that they are available in critical situations.
Conclusion. We can see that there exist possibilities for a prediction of market dynamics if in addition to a conscious, logical thinking also a subconscious thinking is used. It was developed a program where the subconscious brain processes could be detected if the signal from market as well as the conscious reaction of an individual to this signal were known. The program uses our mathematical model of the neuromental Self of the human brain.
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