In spite of the fact that previous studies have shown correlations between the levels of testosterone and risky behavior in male market traders, a new Swedish research found that women did not engage themselves in taking risky financial decisions, after being exposed to the hormone.

A team of scientists, led by Magnus Johannesson, an economist at the Stockholm School of Economics, did not find any of such effects after conducting an experiment that involved a group of 200 post-menopausal women. All the female participants were assigned to the three groups: women in the first group were given testosterone, the second group of volunteers were administered estrogen, and the third group received placebo, all for the period of 4 weeks. After that the experts asked the ladies to play a certain number of economic games that measured the player's ability to take risks, their trust as well as their willingness to share resources. For example, in one of the games, named the 'dictator game', a player was given a choice to make a decision whether to share a pot of money with some charity organization, or to keep the money for himself/herself.

The experts assumed that women who have been administered testosterone, would behave more like men, sharing less money with charity and taking higher risk in an investment game. However, they did not find any significant differences between the ladies who had taken testosterone, or those test subjects who were administered estrogen and the placebo. "My assumptions have changed a lot," M. Johannesson said.

Previous studies investigated on how representatives of both genders differ when it comes to making important finance-related decisions. It was found that exposure to sex hormones is more effective during prenatal and adolescent development than it is later in life. John Coates, a neuroeconomist at the University of Cambridge, United Kingdom, was the lead researcher of the study that involved male traders. He says that a person's sensitivity to the hormone could depend on their exposure to it experienced in prenatal and adolescent development. "So increasing testosterone in women might have much less effect than increasing it in men," he explains. "The results are roughly what I would expect."

It would be very important to carry out a similar experiment involving young men, says Dr. Coates, in order to better understand the extent of an association between T hormones and financial decisions. The results of such experiments may also depend on where they will be performed - in the lab, with low financial funding, or in the field, with palpable amounts of money and risk, added Coates. Magnus Johannesson agrees that more studies with participation of men would be needed, as the effect of sex hormones on financial decision-making is a question that needs much more understanding. He also stresses out that at this point, the statistical strength of his research is pretty high because it involved too many people.

The findings are published in the Proceedings of the National Academy of Sciences jounal.

Tags: Women and Business, Hormones, Women's Studies

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