Financial markets : traders influenced by their testosterone levels

Health 18 August, 2017


Published the 18.08.2017 at 14: 37


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Testosterone has she played a role in the cracks stock market, speculative bubbles and massive and the other events that have punctuated the history of finance since the creation of the first “stock market” in Amsterdam, in the 17th century ? The environment, dominated by men, attracts the attention of scientists. A team from the university of Oxford (Uk) has undertaken to investigate the impact of male hormones on the decision-making and the level of risk involved in the trading rooms.

Their work, published in the journal Management Science, shows that high levels of testosterone are closely linked to decisions that lead to increased prices and destabilize markets.


To achieve this observation, the authors have brought together 140 traders and men have simulated the conditions of a market hall. A portion of the participants received one tablet to increase the levels of testosterone and the other, a placebo. Traders have conducted 17 sessions to buy, sell, place bids and other financial transactions. Each time, they were in competition against each other, with the objective of making the most money possible.

However, the results show a direct causal link between the level of testosterone, and the just appreciation of financial assets. The hormone led the participants to engage in decisions that, eventually, amplified the size and persistence of stock market bubbles. These participants had a tendency to increase the auction, the sale prices and volumes, and to have a mistaken perception of the real value of the shares – although this one is displayed throughout the year.

The decisions are related to our hormones ; the latter may exacerbate some of the risks, insist the authors, who believe that this biological parameter should be taken into account even in the professions based on risk-taking. “Companies could benefit to a better understanding of when and how hormones exert their influence “, they suggest.