CONJURE up an image of a financial risk-taker, and you’ll probably picture an aggressive Wall Street trader, testosterone surging as he closes the deal. But new research suggests that people with low levels of the male sex hormone are also likely to take financial risks.
Previous studies have linked high levels of testosterone to certain risk-seeking behaviours. To investigate whether financial risk-taking follows a similar pattern, Scott Huettel at Duke University in Durham, North Carolina, measured the testosterone levels of 298 people, who then took part in trials in which they chose between a fixed known reward or a gamble between getting a payout – mostly larger than the fixed reward – or nothing.
Overall, the volunteers generally preferred the known return than the gamble, even if they would have been better off, on average, by taking a chance. Surprisingly, the biggest risks were taken by people with very high or very low testosterone, compared with the average levels for their gender (Psychological Science, DOI: 10.1177/0956797611401752).