Men With High Testosterone Levels Make Riskier Financial Decisions

By Eliza Strickland | September 30, 2008 5:12 pm

stock market tradersIn a finding that has particular relevance right now, as the American public looks for scapegoats for the current financial crisis, a new study has found that men with higher levels of testosterone are inclined to make riskier financial decisions. Just how much riskier? Those with 33 percent more testosterone than average men invested 10 percent more of their dough. The findings are based on saliva samples from 98 male Harvard students taken before they played an investment game with $250 in real money [Scientific American].

Researchers say they didn’t outright prove that it was Wall Street men’s hormones that got us into this mess, but that the evidence is strongly suggestive. “Although our findings do not address causality, we believe that testosterone may influence how individuals make risky financial decisions,” said researcher Coren Apicella…. A recent study also showed that stock market traders made more money on days when their testosterone levels were highest [LiveScience].

In that previous study, lead researcher John Coates said that day traders were an anxious mix of confidence-boosting testosterone and the stress-related hormone cortisol, and added that extreme market conditions could send traders’ hormone levels off balance. Coats explained that if a trader’s high level of testosterone was consistently re-enforced by winning big on risky bets, “as it might [be] during a market bubble, it can turn risk-taking into a form of addiction, while extreme cortisol during a crash can make traders shun risk altogether” [LiveScience].

In the new study, published in Evolution and Human Behavior [subscription required], researchers say the drive to bet big and the lure of winning big may be akin to the risks males are willing to take in the throes of a mating ritual. “Financial risk might be comparable to other risky male behaviors associated with reproduction,” Apicella said. “Men may be more willing to take financial risks because the payoffs, in terms of attracting mates, could be higher for them” [LiveScience].

Let Robert Sapolsky regale you with more strange tales of what testosterone can do to the human male in the DISCOVER article “Testosterone Rules.”

Image: flickr/Library of Congress


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