(Telegraph) Does too much testosterone make men behave irresponsibly?
The results of a new study suggest that men’s hormones are to blame for irrational behaviour – and possibly even the banking crisis
According to the study, the naturally-occurring steroids have been found to markedly increase the chances of risk-taking and audacious behaviour in men whose responsibilities include commercial and economic transactions.
Whilst testosterone is also present in the female body, the concentration at which it can be found in men numbers almost 20 times that of the fairer sex. The study cites this concentration, along with the dominance of male traders in the financial industry, as a possible explanation for some of the less successful and more impulsive moves made by bankers and financiers in recent years.
There is even a suggestion that some of the miscalculated trades that have damaged our economy coud have been due to hormonal interference.
The extensive tests conducted by Imperial College attempted to authentically replicate the conditions and social atmosphere of a genuine trading floor. The subjects, who were all male and within the ages of 18 and 30, were observed trading ‘stocks’ and making calculated financial decisions in order to record a behavioural baseline.
The 75 men were then administered varying doses of either testosterone or cortisol and released back onto the trading floor for another round of transactions.
The changes were prominent. After receiving extra doses of the hormones, average trade times dropped by several seconds and an atmosphere of “irrational exuberance” was reported. Yet whilst both cortisol and testosterone appeared to encourage this increasingly risky behaviour, the way that the respective drugs’ effects manifested themselves were slightly different.
Those with artificially-heightened levels of cortisol became outwardly riskier within their trade patterns, chancing potentially unsuccessful transactions and not appearing to consider implications of failure. By directly affecting the subject’s preference for the riskier investment opportunities, cortisol may be considered the more ‘dangerous’ hormone of the two.
Increased levels of testosterone, whilst still promoting and nurturing irrational and illogical decision-making, did not lead to this same level of aggressive personality change. The subjects who received dosages of testosterone were instead observed to behave with a heightened sense of optimism, gambling on stocks and trades with a newfound, but unfounded, belief that they were ‘sure things’.
Overevalutations in asset markets are a constant problem in the arena of financial trading. And although this latest study appears to offer a salient explanation for traders’ unpredictable behaviour, scientists have only just begun to explore the physiological factors of hormones on the economy.