Sex Hormones & Economic Decisions: The Effect of Testosterone on Financial Risk Depends on Social Context

Does testosterone influence risky decisions in economic and social domains? There has been recent speculation in the media that testosterone drives risky decisions, and that the Great Recession started in 2008 because there was “Too Much Testosterone on Wall Street” (Hewlett 2009). In spite of those strong claims, there was scant empirical research to corroborate them, and generally little was known about physiological factors that might account for individual differences in our risk preferences. In two studies, the present research explored the extent to which testosterone predicts individuals’ willingness to take risks when making economic decisions alone and when making socially-interactive economic decisions.