Prenatal testosterone predicts financial risk taking: Evidence from Latin America

A Bayesian Modeling Approach to Examine the Role of Testosterone Administration on the Endowment Effect and Risk-Taking

Financial risk-taking and loss aversion are multifaceted phenomena that are the focus of neuroscience, psychology, and economics research. A growing number of studies highlighted the role of hormones (particularly of testosterone) on socio-economic decision-making. However, the effects of testosterone on risk-taking under framing and consumer-based choices and preferences are inconclusive. We investigated the effects of 100 mg testosterone administration on aspects of decision-making within the Prospect Theory framework which is the most used descriptive model of decision-making under risk. We assessed risk-taking under framing and the endowment effect (effect of possession) using Bayesian modeling. Forty men participated in this double-blind placebo-controlled fully-randomized cross-over experiment and performed two tasks. One was a risk-taking task with binary choices under positive and negative framing associated with different probabilities. In the second task participants had to bid money for hedonic and utilitarian items. We observed a significant increase in serum testosterone concentrations after transdermal application. Compared to placebo, testosterone administration increased risk-taking under the positive framing (very large effect size) and decreased under the negative framing (moderate to small). The sensitivity to gain was positive in each framing. Our model showed that decision-making is jointly influenced by testosterone and the trade-off between gains and losses. However, while the endowment effect was more pronounced for hedonic than for utilitarian items, the effect was independent of testosterone. The findings provide novel information on the complex modulatory role of testosterone on risk-taking within the framework of prospect theory and shed light on mechanisms of behavioral economic biases. The proposed models of effects of individual differences in testosterone on risk-taking could be used as predictive models for reference-depended behavior under positive and negative framing with low and high probabilities.

Individual's Reproductive Strategies Moderates the Association Between Facial Width-to-Height and Risk-Taking Propensity

Previous research has yielded mixed findings on the relationship between facial width-to-height ratio (fWHR), an androgen-dependent feature, and risk-taking propensity. We argue that mixed findings might result from overlooked variables. Given that risk-taking propensity might be ultimately linked to a search for mating opportunities, we analyze if reproductive strategies moderate the relationship between fWHR and risk-taking propensity. Our results, obtained from a sample of 434 male participants, show a positive association between fWHR and recreational and social risk-taking only for men who are more motivated to focus on mating effort over offspring survival. This finding aligns with research arguing that risk-taking may be a mating strategy since being social and recreational risk-prone might illustrate physical and psychological qualities and improve one's ability to attract mates. Our results support the notion that risk-taking might be a domain-specific construct. Overall, our research is in line with recent findings suggesting that the impact of testosterone exposure on risk-taking propensity is best understood when considering the role of contextual variables. Consequently, we add to previous research that studies related to risk-taking propensity should account for reproductive strategies.

The digit ratio (2D:4D) and economic preferences: no robust associations in a sample of 330 women

Many studies report on the association between 2D:4D, a putative marker for prenatal testosterone exposure, and economic preferences. However, most of these studies have limited sample sizes and test multiple hypotheses (without preregistration). In this study we mainly replicate the common specifications found in the literature for the association between the 2D:4D ratio and risk taking, the willingness to compete, and dictator game giving separately. In a sample of 330 women we find no robust associations between any of these economic preferences and 2D:4D. We find no evidence of a statistically significant relation for 16 of the 18 total regressions we run. The two regression specifications which are statistically significant have not previously been reported and the associations are not in the expected direction, and therefore they are unlikely to represent a real effect.

A Context Dependent Interpretation of Inconsistencies in 2D:4D Findings: The Moderating Role of Status Relevance

Whereas direct relationships between 2D:4D and dominance related attitudes or behavior often turn out to be weak, some literature suggests that the relation between 2D:4D and dominance is context-specific. That is, especially in status-challenging situations 2D:4D may be related to dominant behavior and its correlates. Based on this perspective, we interpret inconsistencies in the literature on the relation between 2D:4D and risk taking, aggression and dominance related outcomes and investigate in our empirical study how attitudes in low 2D:4D men may change as a function of the status relevance of the context. We provide evidence for the idea that status relevance of the particular situation at hand influences the attitude towards performance-enhancing means for low 2D:4D men, but not for high 2D:4D men. We argue that 2D:4D may be related to any behavior that is functional to attain status in a specific context. Implications for (economic) decision making are discussed.