Sex Drive and the Stock Market

Makes sense to me:

In the study, conducted by researchers from Harvard University, it was determined that stock market traders saw their profit margins rise on days their testosterone was above its median level and that testosterone could influence how financial wizards often make high risk decisions.
How did the researchers figure this out? They took saliva samples from a group of men ages 18 to 23 and then had the men play a game having to do with investing. Given $250, they had to choose an amount between $0 and $250 to invest. They got to keep the money that they didn’t invest. If the participant lost a coin toss, their money for investing was lost. But, if they won the coin toss they’d get two and a half times the amount of their investment. At the end of the study, one person was selected by lottery to receive cash equal to their investment, so there was some real incentive. To make a long study finding short, the researchers found that the men with higher testosterone levels invested 12 percent more in a risky investment than the more average men did.
So, they determined, there is a biological basis why some men are inclined to more risky behavior than others. While that might not sound terribly revealing, the study represents one of the first times that research has determined that typically male behavior extends to the financial world. Say the researchers: “Men may be more willing to take financial risks because the payoffs, in terms of attracting mates, could be higher for them. This is because women value wealth more than men when choosing for a mate.”

(Via: Carney)

Posted by on August 21st, 2009 at 9:49 pm


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