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Rationalizer: concept device brings online traders back to Earth

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November 15, 2009

The Rationalizer from Philips/ABN AMRO can detect stress levels and is designed to prevent...

The Rationalizer from Philips/ABN AMRO can detect stress levels and is designed to prevent day-traders making rash decisions

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Worse than fishermen, many home-based investors can tell you about “the one that got away” – a little company that listed on the stock exchange for a few cents a share, only to become the next big thing a few months later. And then there's the reverse - the day-trader who wishes he or she had taken a time-out before committing to a block of worthless shares they bought "on a hunch". Imagine wearing a bracelet that warned you that you were positively or negatively stressed - either scared or greedy - and what you were about to do might not be entirely rational? Philips Electronics and Dutch Bank ABN AMRO have developed a concept device that does just that. The Rationalizer is an emotion sensing system designed to help serious online investors take a step back before plunging into their next transaction.

The companies, together with the VU University in Amsterdam, say their research shows (rather unsurprisingly) that home investors do not always act purely rationally: their behavior is sometimes influenced by emotions, most notablyfear and greed, which can compromise their ability to make an objective decision based on fact.

The Rationalizer alerts online traders when it may be wise to take a time-out, wind down and reconsider their actions.

Comprising two elements - the EmoBracelet and the EmoBowl - the Rationalizer system is based on advanced sensing and signal processing technology from Philips.

The EmoBracelet measures the arousal component of the user's emotions through a galvanic skin response sensor (think electrocardiograph, lie detector). This arousal level manifests as a dynamic light pattern on either the EmoBracelet itself or on the EmoBowl. The higher the arousal level, the more intense the dynamic light pattern becomes: the number of elements increases, the speed increases and the color shifts from a soft yellow through orange to a deep red.

Clive van Heerden, Senior Director at Philips Design, says: "So much of our ability to learn, to love, to feelis based on our emotional responses. But as the world becomes less tangible, we begin to lose some of those experiences."

While the "killer application" in this field may be some way off according to van Heerden, he is convinced that one element is essential. "For me, it's important to use technology in a non-invasive way. I think the more you can sense remotely, the more it will be picked up by people".

In the meantime, Philips says it is continuing to explore emotional sensing. "It's really become part of the innovation language," van Heerden says. As such, he believes that the possibilities in this field are almost endless. Interpreting social situations using intelligent cameras, or finding game controllers for gaming technologies are possibilities. "Or how about dating sites where you can tell someone is attracted to you?" he adds.

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