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Sep 30, 2008 09:20 AM | 17
If you've been blaming reckless men for the collapse of America's leading investment houses and the plunging markets, you may be on to something. High levels of testosterone are correlated with riskier financial behavior, new research suggests.
Men with more of the sex hormone made riskier investments than guys with lower levels, according to a study published online yesterday in Evolution and Human Behavior. 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. The students with more masculine facial features, such as prominent jaws and cheekbones, also were riskier with their cash, investing 6 percent more of it than their softer-featured peers.
The connection between the findings and the downfall of investment firms, mortgage financers and insurers that began last year and reached a crescendo two weeks ago "is not that obvious," says Anna Dreber, a co-author of the study. But, she tells us, there are reasons to think that testosterone may have played a role.
Traders have been shown to make more money on days when their testosterone levels are higher, scientists reported earlier this year. Levels of the male sex hormone are known to rise when people win a sports competition; a male-dominated workplace such as a financial institution may perpetuate those elevated levels as colleagues strike gold and egg one another on, Dreber says.
Even the presence of women (how 'bout those evenings at Scores?) can ratchet up testosterone, adds Dreber, a doctoral candidate in economics at the Stockholm School of Economics who is a visiting researcher at Harvard.
So were those titans of Wall Street uber-men?
"Long-term, above-average testosterone levels may perhaps eventually lead to irrational risk-taking, and thus lower profits," Drebersays, noting the previous study of traders. "This is maybe what we see today."
The findings could also explain yesterday's 777-point plunge by the Dow. "People have been losing and their testosterone levels may have decreased, and therefore, they are more risk averse," Dreber says.
The scientists didn’t study women, and while the fairer sex makes far less testosterone, those with more of it would likely behave similarly to men, Dreber says. A 2005 study showed that women made riskier bids on experimental auctions when they were menstruating and their levels of the female sex hormones estrogen and progesterone were lowest.
"Women tend to be more risk averse when it comes to financial gambles," Dreber notes. "They tend to trade less and that tends to be a better strategy. With more 'average women' trading, maybe the stock market would look different."
(Image by iStockphoto/Stephanie Horrocks)
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17 Comments
Add CommentWow, seriously? lol. What's the next latest and greatest result that "studies will show?" Oh, I've got it! That rainbows aren't actually the results of pots of gold, but rather, the results of leprechauns farting! Yeah, that's it! Find the end of the rainbow and find a leprechaun taking a ginormous thunder dump!
Reply | Report Abuse | Link to thisGetting back to the topic, boy, that there testosterone sure did take long enough to make this financial crisis happen, huh? I mean, how many years did this testosterone lie dormant? Quite a beast, that testosterone! Allllways coming out to wreak havoc at the worst of times! How convenient to blame this on testosterone. It couldn't have anything to do with the people themselves and their decision-making process, nooooo. It was clearly testosterone! Yep. Always was, too... even when things were going good! lol.
And on that note, there's a rainbow outside my window! I've always wanted to see a leprechaun take a dump...
-Stephen
Well, about all of the bad buisness deals that have fallen through in the last year or two. Too bad it is making life for honest people harder by killing the otherwise decent american economy. look at all the people pointing their fingers at each other..... Oh, don't get me started! And Jodan? please come up with soething better than testosterone to blame. Thanks.
Reply | Report Abuse | Link to thisP.S. Chicke little just called....lmao
Well, about all of the bad buisness deals that have fallen through in the last year or two. Too bad it is making life for honest people harder by killing the otherwise decent american economy. look at all the people pointing their fingers at each other..... Oh, don't get me started! And Jodan? please come up with soething better than testosterone to blame. Thanks.
Reply | Report Abuse | Link to thisP.S. Chicke little just called....lmao
Well, about all of the bad buisness deals that have fallen through in the last year or two. Too bad it is making life for honest people harder by killing the otherwise decent american economy. look at all the people pointing their fingers at each other..... Oh, don't get me started! And Jodan? please come up with soething better than testosterone to blame. Thanks.
Reply | Report Abuse | Link to thisP.S. Chicke little just called....lmao
Very honest! But "Yipes! " Where are the more mello bull elephants when we need them? This sounds like an opportunity for a medical equipment designer. Test the hormone levels when they have the checkbook.
Reply | Report Abuse | Link to thisShe: Did you see the big, new house that Jill & Tim just bought?
Reply | Report Abuse | Link to thisHe: Yes, they paid $900,000 for a cookie-cutter McMansion.
She: I want a house like that!
He: We can't afford it.
She: But Jill & Tim bought it with no money down and only pay interest for the first two years.
He: Sounds like a risky bet to me.
She: If you ever want to have sex with me again, you'll buy me a house like that!
He: Yes, dear...
And thus, that is how testosterone is responsible for the current crisis.
Seems to me it's lask of testoterone that is the problem. JP Morgan and Goldman Sachs, the most testoterone filled organizations seem to be doing just fine. How do you account for this?
Reply | Report Abuse | Link to thisAhahahahaha. This should be in People or Oprah! I'm glad I stopped subcribing to this rag... frees up more time to learn about science.
Reply | Report Abuse | Link to thisIt's the Big Boys Pissing Contest. (so obvious!). As a shareholder in several companies, I haven't voted for an increase in stock options/executive pay for years. It's all guys backslapping each other into higher and higher salaries and risks. Women wouldn't have done this...
Reply | Report Abuse | Link to thisAlso, A GAME involving 98 people? What does that have to do with real life? My god, let's just cut out the middle man and publish what we think is true. I could tell you that when playing cards for a moderate sum of money, my personal opinion is that more manly men will bet more agressively, but that is my OPINION.
Reply | Report Abuse | Link to thisFast food now fast "science". Perhaps Global Warming is also a byproduct of testosterone! I submit that estrogen toxicity causes decisions by consensus (when they can be made at all!); frequent and pointless meetings that chronically begin late, end even later and do not stay on topic (wouldn't want to offend), analysis paralysis and micromanagement of minutia.
Reply | Report Abuse | Link to thisFast food now fast "science". Perhaps Global Warming is also a byproduct of testosterone! I submit that estrogen toxicity causes decisions by consensus (when they can be made at all!); frequent and pointless meetings that chronically begin late, end even later and do not stay on topic (wouldn't want to offend), analysis paralysis and micromanagement of minutia.
Reply | Report Abuse | Link to thisAt the time of financial crises we need to come together united and try to solve the problems which are responsible for such a hazard. We need to overcome it. It is meant to bring calm to the population and markets and display government strength and stability. As a large number of people spend their money in movies, making films, sports, nowadays even many clubs offer <a href=" http://www.bgvegas.com"> backgammon for fun</a> where people lose a large sum of money there in such stuffs which should be minimized as the world is going through a phase where a little wastage of money could be matter of remorse.
Reply | Report Abuse | Link to thisAt the time of financial crises we need to come together united and try to solve the problems which are responsible for such a hazard. We need to overcome it. It is meant to bring calm to the population and markets and display government strength and stability. As a large number of people spend their money in movies, making films, sports, nowadays even many clubs offer <a href=" http://www.bgvegas.com"> backgammon for fun</a> where people lose a large sum of money there in such stuffs which should be minimized as the world is going through a phase where a little wastage of money could be matter of remorse.
Reply | Report Abuse | Link to thisAbsolutely not! Unless testosterone, is not what it used to be. This crisis was caused by the risk-adverse crowd following some bad credit rating signs over a precipice.
Reply | Report Abuse | Link to thishttp://www.dailymotion.com/user/PerKurowski/video/x94usd_they-regulators-authorized-a-levera_news
Am I obsessed? You bet! And you should be too!
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Reply | Report Abuse | Link to thisi never heard about this before. i mean i don't know exactly the relation between testosterone and financial crisis. well, if your want to learn about testosterone and the side effect of androgel just follow this link. [url=http://www.boost-your-low-testosterone.com/androgel-side-effects.html]Androgel Side Effects[/url]
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