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Combining Behavioral Endocrinology and Experimental Economics: Testosterone and Social Decision Making
Published on: March 2, 2011
Low- and high-testosterone individuals exhibit decreased aversion to economic risk
Steven J Stanton1, O'Dhaniel A Mullette-Gillman, R Edward McLaurin
1Center for Cognitive Neuroscience, Duke University, Durham, NC 27708-0999, USA.
Psychological Science
|March 12, 2011
Summary
Testosterone levels show a U-shaped link to economic risk and ambiguity preferences in both men and women. Low or high testosterone levels correlate with neutral preferences, while intermediate levels indicate aversion.
Area of Science:
- Behavioral Economics
- Endocrinology
- Neuroeconomics
Background:
- Testosterone is linked to social risk-taking but its effect on economic risk preferences is unclear.
- Previous research on testosterone and economic risk shows inconsistent findings.
- Understanding hormonal influences on economic decision-making is crucial.
Purpose of the Study:
- To investigate the relationship between endogenous testosterone levels and economic preferences.
- To examine risk preference, ambiguity preference, and loss aversion in relation to testosterone.
- To analyze these relationships in a large sample of men and women.
Main Methods:
- Measured endogenous testosterone levels in a sample of 298 men and women.
- Assessed participants' economic preferences, including risk, ambiguity, and loss aversion.
- Employed statistical analysis to determine the association between testosterone and preferences.
Main Results:
- A significant U-shaped association was found between testosterone levels and risk/ambiguity preferences.
- Individuals with very low or very high testosterone were risk and ambiguity neutral.
- Individuals with intermediate testosterone levels exhibited risk and ambiguity aversion; no link to loss aversion.
Conclusions:
- Endogenous testosterone exhibits a nonlinear relationship with economic risk and ambiguity preferences.
- This U-shaped association was consistent across both genders.
- Findings challenge previous assumptions about testosterone's linear effect on risk-taking behavior.
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