Despite what is apparent, every human act is not based on a rational cost-benefit calculation. At least not always. In fact, in economic decisions may be influenced by other elements that have nothing rational. Like testosterone.
Testosterone behavior
High testosterone levels could make most stock market professionals overestimate the values of future actions and change their trading behavior.
This is at least suggested by Amos Nadler, Ivey Business School, Western University, Peiran Jiao, Oxford University, Paul Zak and Veronika Alexander, from the University of Oxford Research Center, in his study The Bull of Wall Street.
The double-blind study included 140 young men, each of whom received a topical gel containing testosterone or a placebo, before participating in an experimental asset market in which they were able to post bids and applications.
According to Nadler:
This research suggests the need to consider hormonal influences in decision making in professional settings, because biological factors may exacerbate risk over capital. Perhaps the simplest recommendation is to implement 'cooling' periods to interrupt exceptionally positive feedback cycles and return the focus to fundamental asset valuations to reduce the possibility of biased decisions.
The study is interesting, but far from conclusive. Basically because testosterone is overrated, there is too much talk about it, which is used too much as a justification for many different things, from the reason of a crime to the apparent peaceful attitude of a woman to a man.
There are even studies that correlate low levels of testosterone with impulsive behaviors, as John Lloyd explains in The New Great Little Book of Ignorance:
Testosterone is associated with aggressiveness in animals, so until recently it was believed to have a similar effect on people. But, apparently, it is not so. It is now believed that low testosterone levels can cause mood disorders and aggression. Only ten years ago that testosterone is studied, so we still do not fully understand the role it plays. It is surprising, but during the first weeks of life, male babies have as much testosterone as they will have during adolescence, although at cauterus or six months levels of this hormone are reduced to barely detectable.