WASHINGTON — The hormone that drives male aggression and sexual interest also seems able to boost short term success at finance.
But what seems to start out well can turn bad. Elevated testosterone levels over several days may lead to irrational risk-taking, according to researchers at the University of Cambridge in England.
“If people want to get practical, it would be good for both banks and the financial system as a whole if we had more women and older men in the markets,” study author John M. Coates said.
Coates and Joe Herbert studied male financial traders in London, taking saliva samples in the morning and evening. They found that levels of two hormones, testosterone and cortisol, affected traders. Those with higher levels of testosterone in the morning were more likely to make an unusually big profit that day.
Cortisol is tied to uncertainty, novelty and unpredictability, “which pretty much describes a trader’s life,” Coates said.
Coates and Herbert’s study comes less than two weeks after U.S. researchers reported that young men shown erotic pictures were more likely to make a larger financial gamble than if they were shown a picture of something scary or something neutral.
