The role of hormones in financial markets
Bose, S., Ladley, D. and Li, X. 2020. The role of hormones in financial markets. International Review of Financial Analysis. 67 101434. https://doi.org/10.1016/j.irfa.2019.101434
| Title | The role of hormones in financial markets |
|---|---|
| Type | Journal article |
| Authors | Bose, S., Ladley, D. and Li, X. |
| Abstract | Steroid hormones, such as testosterone, have been shown to affect risk preferences in financial traders with high levels leading to excessive risk-taking. Hormone levels, in turn, are affected by trading outcomes as well as by gender - males are more sensitive to stimuli than females. We develop a model to investigate the effects of hormones on financial market stability and trader performance. An increase in the proportion of female traders does not necessarily make markets less volatile; however, it reduces the occurrence of market crashes. Male traders on average under-perform females, although the best performing individuals are more likely to be male. |
| Keywords | Gender Hormones; Endogenous risk preference; Market stability; Trader performance |
| Article number | 101434 |
| Journal | International Review of Financial Analysis |
| Journal citation | 67 |
| ISSN | 1057-5219 |
| Year | 2020 |
| Publisher | Elsevier |
| Accepted author manuscript | License CC BY-NC-ND 4.0 File Access Level Open (open metadata and files) |
| Publisher's version | File Access Level Open (open metadata and files) |
| Digital Object Identifier (DOI) | https://doi.org/10.1016/j.irfa.2019.101434 |
| Web address (URL) | https://doi.org/10.1016/j.irfa.2019.101434 |
| Publication dates | |
| Published in print | Jan 2020 |
| Published online | 09 Dec 2019 |