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Hormones and economy connected?
From Endogenous steroids and financial risk taking on a London trading f...
"We found that a trader's morning testosterone level predicts his day's profitability. We also found that a trader's cortisol rises with both the variance of his trading results and the volatility of the market. Our study suggested that higher testosterone may contribute to economic return. Further, testosterone and cortisol are known to have cognitive and behavioral effects, so if the acutely elevated steroids we observed were to persist or increase as volatility rises, they may shift risk preferences and even affect a trader's ability to engage in rational choice." (John Coates)
"Traders apparently don't know they are being manipulated by their hormone fluctuations," says John Coates, co-author of the study. The uppers, he finds, tend to happen in market bubbles, while cortisol prevails during downturns. Managers are advised to whip erratic traders off the floor and devise various means to soothe them. The study says little about the hormones of lady traders, presumably because there are not many of them, but it does recommend hiring women as they are less likely to fluctuate.
Is economy libido-driven? What other hormones play a role?
"We found that a trader's morning testosterone level predicts his day's profitability. We also found that a trader's cortisol rises with both the variance of his trading results and the volatility of the market. Our study suggested that higher testosterone may contribute to economic return. Further, testosterone and cortisol are known to have cognitive and behavioral effects, so if the acutely elevated steroids we observed were to persist or increase as volatility rises, they may shift risk preferences and even affect a trader's ability to engage in rational choice." (John Coates)
"Traders apparently don't know they are being manipulated by their hormone fluctuations," says John Coates, co-author of the study. The uppers, he finds, tend to happen in market bubbles, while cortisol prevails during downturns. Managers are advised to whip erratic traders off the floor and devise various means to soothe them. The study says little about the hormones of lady traders, presumably because there are not many of them, but it does recommend hiring women as they are less likely to fluctuate.
Is economy libido-driven? What other hormones play a role?
Replies to This Discussion
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Permalink Reply by Nynke Etk Fokma on -
From How Fractals Can Explain What's Wrong with Wall Street
If the weather is moderate 95 percent of the time, can the mariner afford to ignore the possibility of a typhoon?
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Permalink Reply by Anjez Winkler on -
"Traders apparently don't know they are being manipulated by their hormone fluctuations,"
And what if they would know?
The study says little about the hormones of lady traders,
presumably because there are not many of them, but it does
recommend hiring women as they are less likely to fluctuate.
But i guess we cannot be sure about this either and but hope
the female traders would have no connection to... "pms" or
any such "notions".
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Permalink Reply by Nynke Etk Fokma on
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And what if they would know?
I would hope that such self-reflection would help them manage themselves better.
hope the female traders would have no connection to... "pms" or any such "notions".
Most of us know about this once-per-around-4-weeks event taking place in our bodies, and the effects it has on our thoughts and behavior, and I would hope we would take ourselves "off the trading floor" immediately if we can't think clearly and act congruently. Dunno, I'm no lady trader.
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Permalink Reply by Anjez Winkler on
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I would hope that such self-reflection would help them manage themselves better.
But what if also this would be hormonically (so not 'harmonically'...) determined...?
("vicious circle" and "in the box")
;-P
Is not such specific trade (so possibly not 'all' trade) already very much
based in "hormones"?
Most of us know about this once-per-around-4-weeks event taking place in our bodies
We may hope so...
Guess "trade" as such is "a risky fluctuating business" in itself,
especially because now i feel it is very much "hormonically" based
as i guess this is so because it is about "profit", "risk" and "safety",
so all very primal... so to speak, and so perhaps in fact even...
primitive?
Only some questions, i do not mean to be "final"...
But i guess it may be worthwhile study..., or... may be.
:-)
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Permalink Reply by Anjez Winkler on
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Perhaps the "finance" has more to do with "war" than with "peace"?
Well; this occurred to my mind now. But i mean: i guess "finance" deals
at least very much with primal survival..., so perhaps that is
why "hormones" are set to... "fight mode" any way?
(I guess then this is so both in men and women.)
Well, only again some questions...
:-)
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Permalink Reply by Anjez Winkler on
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Is economy libido-driven?
For now as i see it: i assume this is so; also the very limited notion of "economy" shows me this
may be even only true.
Is it serving the "beast" instead of the "best"?
(Now... we see banks are tumbling... or at least... 'shifting'...
and why... is all that? These questions may go far... and i do not
say that i have "the" answer(s).)
:-)
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