Could rats succeed as hedge fund traders?

An intriguing book has turned up: Art and Economy, the first volume of a catalogue of projects on the global economy supported by the Landia Foundation and Universität der Künste Berlin.

One project is Michael Marcovici’s Rat Trader.  The book describes the training of laboratory rats to trade in foreign exchange and commodity futures markets.  Marcovici says the rats “outperformed some of the world’s leading human fund managers.”

The rats were trained to press a red or green button to give buy or sell signals, after listening to ticker tape movements represented as sounds.  If they called the market right they were fed, if they called it wrong they got a small electric shock.  Male and female rats performed equally well.

The second generation of rat-traders, cross-bred from the best performers in the first generation, appeared to have even better performance, although this is a preliminary result, according to the text.

Marcovici’s plan, he writes, is to breed enough of them to set up a hedge fund.

via Investment rats | The Enlightened Economist.

Clikc on Business Insider for more details.

Click on rattraders for Marcovici’s web site.

This is, of course, a joke, not to be taken seriously.

But, in the spirit of the joke, let me say that the advantage of rat traders is that if they failed to perform, they wouldn’t ask for a government bailout.   And there’s something to be said for traders who take bonuses in the form of cheese.

And it would be interesting to see if the rats outperform the computer algorithm that a venture capital firm supposedly appointed to its board of directors.

Tags: Landia Foundation, Marcovici, Michael Marcovici, Rat traders, Universität der Künste Berlin