Higher Testosterone May Lead to Bigger Financial Risks
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GH-Photography/iStock/Thinkstock(LONDON) — Financial markets are controlled by testosterone more than you think.
A new study from Imperial College London published in Scientific Reports reveals men with higher testosterone levels make bigger financial risks.
The researchers conducted the study using a trading floor simulation with volunteers buying and selling assets among themselves. In one experiment, volunteers kept their natural hormone levels, but in another the volunteers were administered either cortisol or testosterone.
The results showed that both cortisol and testosterone caused the subjects to shift their investments towards riskier assets.
“Our results suggest that changes in both cortisol and testosterone could play a destabilizing role in financial markets through increased risk-taking behaviour, acting via different behavioral pathways,” said the researchers.
According to the researchers, the high-stress environment of the markets could lead to a higher level of cortisol and testosterone in traders. In that kind of an environment, cortisol levels increase because the body is being prepared for a fight-or-flight response.
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