Why social status matters for understanding the interrelationships between testosterone, economic risk-taking, and gender (original) (raw)

Low-and high-testosterone individuals exhibit decreased aversion to economic risk

2011

Abstract Testosterone is positively associated with risk-taking behavior in social domains (eg, crime, physical aggression). However, the scant research linking testosterone to economic risk preferences presents inconsistent findings. We examined the relationship between endogenous testosterone and individuals' economic preferences (ie, risk preference, ambiguity preference, and loss aversion) in a large sample (N= 298) of men and women.

Organizing Effects of Testosterone and Economic Behavior: Not Just Risk Taking

PLoS ONE, 2011

Recent literature emphasizes the role that testosterone, as well as markers indicating early exposure to T and its organizing effect on the brain (such as the ratio of second to fourth finger, 2D : 4D), have on performance in financial markets. These results may suggest that the main effect of T, either circulating or in fetal exposure, on economic behavior occurs through the increased willingness to take risks. However, these findings indicate that traders with a low digit ratio are not only more profitable, but more able to survive in the long run, thus the effect might consist of more than just lower risk aversion. In addition, recent literature suggests a positive correlation between abstract reasoning ability and higher willingness to take risks. To test the two hypotheses of testosterone on performance in financial activities (effect on risk attitude versus a complex effect involving risk attitude and reasoning ability), we gather data on the three variables in a sample of 188 ethnically homogeneous college students (Caucasians). We measure a 2D : 4D digit ratio, abstract reasoning ability with the Raven Progressive Matrices task, and risk attitude with choice among lotteries. Low digit ratio in men is associated with higher risk taking and higher scores in abstract reasoning ability when a combined measure of risk aversion over different tasks is used. This explains both the higher performance and higher survival rate observed in traders, as well as the observed correlation between abstract reasoning ability and risk taking. We also analyze how much of the total effect of digit ratio on risk attitude is direct, and how much is mediated. Mediation analysis shows that a substantial part of the effect of T on attitude to risk is mediated by abstract reasoning ability.

Testosterone and financial risk preferences

Evolution and Human …, 2008

Many human behaviors, from mating to food acquisition and aggressiveness, entail some degree of risk. Testosterone, a steroid hormone, has been implicated in a wide range of such behaviors in men. However, little is known about the specific relationship between testosterone and risk preferences. In this article, we explore the relationship between prenatal and pubertal testosterone exposure, current testosterone, and financial risk preferences in men. Using a sample of 98 men, we find that risk-taking in an investment game with potential for real monetary payoffs correlates positively with salivary testosterone levels and facial masculinity, with the latter being a proxy of pubertal hormone exposure. 2D:4D, which has been proposed as a proxy for prenatal hormone exposure, did not correlate significantly with risk preferences. Although this is a study of association, the results may shed light on biological determinants of risk preferences.

Gender differences in financial risk aversion and career choices are affected by testosterone

Proceedings of the National Academy of Sciences, 2009

Women are generally more risk averse than men. We investigated whether between- and within-gender variation in financial risk aversion was accounted for by variation in salivary concentrations of testosterone and in markers of prenatal testosterone exposure in a sample of >500 MBA students. Higher levels of circulating testosterone were associated with lower risk aversion among women, but not among men. At comparably low concentrations of salivary testosterone, however, the gender difference in risk aversion disappeared, suggesting that testosterone has nonlinear effects on risk aversion regardless of gender. A similar relationship between risk aversion and testosterone was also found using markers of prenatal testosterone exposure. Finally, both testosterone levels and risk aversion predicted career choices after graduation: Individuals high in testosterone and low in risk aversion were more likely to choose risky careers in finance. These results suggest that testosterone has b...

Does Testosterone Administration Increase Competitiveness, Confidence and Financial Risk-taking in Men?

2021

The sex steroid hormone testosterone regulates male-typical behaviors such as aggression and displays of dominance in non-human animals. According to the Challenge Hypothesis, these effects arise from context-sensitive testosterone increases that facilitate inter-male competitions over resources, status, and mates. A growing literature documents similar effects of testosterone on economic behaviors related to competition and risk-taking in humans, though findings to date have been mixed. Here, we report two randomized double-blind placebo-controlled testosterone administration experiments, whose combined sample (N = 334) is substantially larger than any previous investigation of the topic (N1 = 91, N2 = 243). The studies were designed independently by research groups in Europe and the US, and both investigated testosterone’s effects on men’s willingness to compete, confidence, and risk-taking—dimensions of economic behavior that are theoretically linked to the Challenge Hypothesis, ...

No Robust Association between Static Markers of Testosterone and Facets of Socio-Economic Decision Making

Frontiers in behavioral neuroscience, 2017

Digit ratio (2D:4D) and facial width-to-height ratio (WHR) are supposedly static indicators of testosterone exposition during prenatal and pubertal lifetime, respectively. Both measures have been linked to aggressive and assertive behavior in laboratory economic games, as well as in real world scenarios. Most of the research-often limited to male subjects-considers the associations between these behaviors, traits, and hormonal markers separately for 2D:4D and WHR. Reported associations are weak and volatile. In the present study we had independent raters assess 2D:4D and WHR in a sample of = 175 participants who played the ultimatum game (UG). Respondent behavior in UG captures the tendency to reject unfair offers (negative reciprocity). If unfair UG offers are seen as provocations, then individuals with stronger testosterone exposition may be more prone to reject such offers. Economists argue that negative reciprocity reflects altruistic punishment, since the rejecting individual i...

Power, testosterone, and risk-taking

Journal of Behavioral Decision Making, 2010

Power has been found to increase risk-taking but this effect appears to be moderated by individual differences in power motivation . Among individuals high in power motivation, the experience of power leads to more conservative decisions. As testosterone is associated with the pursuit of power and status , we reasoned that hightestosterone individuals primed with power might be similarly risk-avoidant. Conversely, we hypothesized that high-testosterone individuals primed with low power, would see risk-taking as a vehicle for pursuing potential gains to their status and resources. We report findings from two experiments that are consistent with these predictions. In Experiment 1, higher testosterone males (as indicated by second-fourth digit ratio) showed greater risk-taking when primed with low power. Experiment 2 replicated this effect and also showed that when primed with high power, higher testosterone males took fewer risks.

Testosterone is positively associated with risk taking in the Iowa Gambling Task

Hormones and Behavior, 2011

The association between testosterone and economic risk is not well-understood and is understudied. The present study aimed to further characterize what if any relationship testosterone has with risky economic decisions. To do so, 154 participants (78 men) completed the Iowa Gambling Task (IGT) and also provided saliva samples, which were assayed for endogenous testosterone levels using radioimmunoassay. High-levels of endogenous testosterone were associated with choosing less frequently from advantageous IGT decks of cards, indicating greater risk taking. The data showed that the effects of testosterone on IGT performance were similar for men and women. High-testosterone women and hightestosterone men made riskier choices than their low-testosterone counterparts of the same sex, and this effect was pronounced in women. Thus, high levels of testosterone are associated with willingness to incur greater risk in both sexes.

Social status strategy in early adolescent girls: Testosterone and value-based decision making

Psychoneuroendocrinology, 2017

There has been strong interest, spanning several disciplines, in understanding adolescence as a developmental period of increased risk-taking behavior. Our goals focus on one line of investigation within this larger developmental risk framework. Specifically, we examined levels of pubertal hormones in girls in relation to their willingness to take greater financial risks to gain social status. To this end, we tested the hypothesis that higher levels of testosterone during the ages of pubertal maturation are associated with a greater willingness to sacrifice money for social admiration. Sixty-three girls ages 10-14 (M age = 12.74) participated in laboratory measures and completed at-home saliva sample collection. The Pubertal Development Scale (PDS) and basal hormone levels (testosterone, estradiol, DHEA) measured pubertal maturation. We made use of a developmentally appropriate version of an Auction Task in which adolescents could take financial risks in order to gain socially motivated outcomes (social status). PDS and testosterone were each associated with overall levels of financial risk taking over the course of the Auction Task. In hierarchical models, PDS and testosterone were predictors of the slope of overbidding over the course of the task. Results provide evidence for the role of testosterone and pubertal maturation in girls' motivations to engage in costly decision making in order to gain social status. Findings contribute to our understanding of the developmental underpinnings of some interesting aspects of adolescent risk behavior.

Social comparison and gender differences in risk taking

2015

The present paper contributes to the controversy regarding gender differences in risk taking by investigating the impact of social comparison. Social comparison is formalized by integrating a social reference point into the model of Koszegi and Rabin. Drawing on previous results from evolutionary biology, we hypothesize that men (women) focus more on relative (absolute) income, i.e., the relative weight of social gain-loss utility is higher for men than for women. Our model predicts that risk taking is higher for correlated than for uncorrelated risks and that this effect is stronger for men than for women. These predictions are confirmed by a simple classroom experiment. We conclude that social comparison and the correlation of risks play an important role in the discussion of gender differences in risk taking.