Sometimes you have to be careful not to too broadly apply the results of a study. In this case, I’m not sure if I can help it. Just call me out (as you often do) in the comments if you think I’ve done so. Two recent studies showed a strong correlation between sex hormones and monetary risks.
And that kind of explains everything. Like…
Why do financial bubbles happen? Why does sex sell? Why do men, especially men in power, seem to make bone-headed sex decisions? Why do some men walk into a strip club with rent money and walk outside without? Why do attractive young saleswomen seem to be preferred by pharmaceutical companies? Why is Vegas so successful? Why will Internet users risk viruses and phishing scams to see (yet another) titillating image via questionable links?
Testosterone, it turns out, makes you a bit of a doofus sometimes. It’s all just part of being a chimp*.
In a Stanford study, men exposed to an erotic image were more likely afterward to take a big gamble. When given $10 and the choice to bet a dollar or a dime, men made the larger gamble more often when exposed to eroticism than when exposed to snakes, spiders, or various office supplies.
Meanwhile, across the Pond at Cambridge, researchers found that higher levels of testosterone among day traders were linked to bigger financial gambles on the trading floor. Even more telling, the act of winning after a gamble increases testosterone, which makes men more likely to continue gambling at higher and higher stakes. This is called “the winner effect.”
Thus, bubbles get bigger and bigger until they bust. Thus, every crazy risk you’ve ever seen a man take (Spitzer, anyone?) may be due to that dastardly, daring hormone.
*Whether or not you ascribe to the DNA scientists’ assertion that humans are 98% chimpanzee is up to you. But it does help me to explain LOTS of things about human behavior, and in this case, the role of testosterone in putting on grand displays to impress the ladies. Just watch any teenage boy around a gaggle of girls and try not to think of a male ape beating his chest.
