Testosterone key to financial risk-taking
Researchers at the Duke University in Durham, North Carolina, found that people who have high or low levels of testosterone are likely to be financial risk-takers.
It has been believed that those with high levels of testosterone generally show certain risk-seeking behaviours.
To find out whether this tendency also exist among those with low level of the sex hormone, the Duke researchers led by Scott Huettel recruited 298 people and measured their level of testosterone.
The volunteers were then put on trials in which they chose between a fixed known reward or a gamble between getting a payout or nothing.
Overall, the participants preferred the known return than the gamble on average. But those with very high or very low testosterone chose to take the biggest risks.
"Testosterone is positively associated with risk-taking behaviour in social domains such as crime, physical aggression. However, the scant research linking testosterone to economic risk preferences presents inconsistent findings," the team wrote in the journal Psychological Science.
"We examined the relationship between endogenous testosterone and individuals` economic preferences. We found that endogenous testosterone levels have a significant U-shaped association with individuals` risk and ambiguity preferences, but not loss aversion.
Specifically, individuals with low or high levels of testosterone were risk and ambiguity neutral, whereas individuals with intermediate levels of testosterone were risk and ambiguity averse. This relationship was highly similar in men and women."
In contrast to received wisdom regarding testosterone and risk, the researchers added, the present data provide the first robust evidence for a nonlinear association between economic preferences and levels of endogenous testosterone.