Men drawn to risky busi­ness

Calgary Herald - - WEEKEND LIFE - LINDA BLAIR Linda Blair is a clin­i­cal psy­chol­o­gist and au­thor of Sib­lings: How to Han­dle Ri­valry and Cre­ate Life­long Lov­ing Bonds The Daily Tele­graph

Most of us think risk-tak­ers are young and pre­dom­i­nantly male. Is this stereo­type ac­cu­rate? Re­search find­ings may sur­prise you.

In terms of gen­der, the stereo­type does hold up, al­though not pow­er­fully. James Byrne and col­leagues at Tem­ple Univer­sity in Philadel­phia con­ducted a meta­anal­y­sis of 150 stud­ies of risk-tak­ing ten­den­cies in adults across five age spans. They found males more likely than fe­males to take risks. How­ever, the ra­tio nar­rowed with age.

Self-con­fi­dence does make a dif­fer­ence. Nor­ris Krueger and Pe­ter Dick­son at Ohio State Univer­sity pre­sented adult par­tic­i­pants with in­for­ma­tion about their abil­ity to make risky de­ci­sions — some were told they were good at it, while oth­ers were told they were less com­pe­tent.

They then asked ev­ery­one to make a fi­nan­cial de­ci­sion. Those who had been led to be­lieve they were com­pe­tent de­ci­sion­mak­ers took greater risks.

Here, how­ever, the match be­tween our as­sump­tions about risk-tak­ing and re­al­ity ends. Anika Josef at the Max Planck In­sti­tute for Hu­man Devel­op­ment, to­gether with col­leagues in Basel and Yale, car­ried out a 10-year lon­gi­tu­di­nal study look­ing at risk-tak­ing ten­den­cies of 44,076 Ger­man adults be­tween 18 and 85, across a range of ar­eas.

They found that, al­though risk-tak­ing be­hav­iour tends to de­cline with age, there was an in­crease in risk-tak­ing among the over-65s.

The re­searchers also gave par­tic­i­pants a per­son­al­ity ques­tion­naire, and found those who en­joy seek­ing new chal­lenges en­gaged in more risk-tak­ing be­hav­iour.

John Coates and Joe Her­bert at the Univer­sity of Cam­bridge re­cruited 17 male Lon­don traders and mea­sured their lev­els of cor­ti­sol and testos­terone twice daily for eight days, first thing in the morn­ing and af­ter work.

They found sig­nif­i­cant re­la­tion­ships be­tween testos­terone and fi­nan­cial re­turns, and be­tween cor­ti­sol (stress re­sponse hor­mone) and fi­nan­cial un­cer­tainty. Traders who had high testos­terone lev­els on ris­ing made more profit that day. A one-off high testos­terone read­ing, is as­so­ci­ated with greater ap­petite for risk.

If pro­longed (as in a mar­ket bub­ble), it’s also linked with in­creased sen­sa­tion-seek­ing, im­pul­sive­ness and harm­ful risk-tak­ing be­hav­iour.

When cor­ti­sol spikes briefly — in their study, be­cause traders ex­pected a volatile mar­ket that day — it’s as­so­ci­ated with in­creased mo­ti­va­tion and fo­cus. How­ever, when cor­ti­sol re­mains high, at­ten­tion be­comes fo­cused on neg­a­tive prece­dents, anx­i­ety rises and the in­di­vid­ual be­comes risk-averse.

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