Hormones May Lead Financial Traders to Take Bigger Risks.
The stressful and competitive environment of the financial world may boost levels of the hormones cortisol and testosterone in financial traders, leading them to invest in riskier assets. In a simulation, male participants who were given doses of cortisol shifted investments towards riskier assets and those given testosterone experienced increased levels of optimism about the future prospects of their choice. The researchers conclude, “Our results suggest that changes in both cortisol and testosterone could play a destabilizing role in financial markets through increased risk taking behavior, acting via different behavioral pathways.”
Scientific Reports, July 2015