Study Shows Testosterone is Bad For High-Stakes Decisions

itwbennett writes "According to a study by researchers at the University of British Columbia's Sauder School of Business, young CEOs with higher levels of testosterone in their system are 'more likely to initiate, scrap or resist mergers and acquisitions' — even when it's not in their best interest. 'We find a strong association between male CEOs being young and their withdrawal rate of initiated mergers and acquisition,' says Prof. Levi, whose research relies on the established correlation between relative youth and increased levels of testosterone. 'For instance, young CEOs, who have higher levels of testosterone, tend to reject offers even when this is against their interest.'"

Re:RTFA. SRSLY.

[martin-boundary]

Btw, the Nash equilibrium, optimal solution for splitting $100 would be to offer $0.01 and keep $99.99. Would you accept that?

How is this a Nash equilibrium?

BTW, it's quite rational to reject $0.01 when the other player receives $99.99, since after the game the richer player has more options available to spend money than the poorer player. If the two players have zero dollars in their pockets to begin with, then any outcome away from 50/50 leads to relative inequality after the game. If the first player offers more than 50 to the other, then he knows that the second player will accept, leading to inequatiy and an incentive to reduce the amount back to 50. But if he offers less than 50 to the other player, then there will be inequality unless the second player rejects. So it's irrational to offer less than 50, and Nash is at 50/50.

Re:Testosterone? Really?

[siriuskase]

Thanks to you, I was persuaded to read the whole article. It plainly said that it relied on the inverse correlation between age and testosterone levels, then it never said anything about actual blood tests. Relied in this sense is a very strong word, it means the whole study depended on this fact. So I read the article making the mental substitution of inexperience for high testosterone and it made perfect since, Inexperienced CEO's make more mistakes. WoW! If they conducted this same experiment with female CEO's, would the younger ones make more mistakes? Would they then theorize that the young female CEO's had high testosterone? Females would have made an interesting control group. Did they even have a control group?