SCAM

The chairman is impressed, despite his initial doubts, by research indicating that the level of testosterone in the brain affects a person’s attitude to risk aversion and career choices.


“What’s the split between men and women employees at your esteemed organisation?” I asked the chairman of the implausibly-sized investment company Second Coming Asset Management as we enjoyed a bottle or two of Chateau Trygve Tøraasen at The Kudos To Thames River For Its Current Run Of Splendidly-Named New Employees.

“Off the top of my head?” replied the chairman. “I’d say it’s about a fifty-fifty split.” “Let me rephrase that,” I said. “Ignoring secretaries, your own special teams of personal assistants, personal masseuses and personal astrologers, not to mention your director of first impressions at reception, what’s the split?”

“Ah,” said the chairman. “That split. I’d say it was about average for the City.” “That bad?” I replied. “So you’re not unduly worried by the question of what part testosterone plays in the workings of Her Majesty’s financial services industry then?” “Oh good grief,” sighed the chairman. “Not you as well. I thought we’d been through all that with ­Harriet Harlady.”

“I’ve no real opinion on this one way or the other,” I said holding up my hands. “And anyway, this has nothing to do with the views of the right honourable member – if I may use that word in this context – for Camberwell and Peckham. I like to be more scientific in our meetings, which is why I have real live academic research on the subject for your delectation.

“For after swabbing 500 male and female MBAs for their saliva and then getting them to play a computer game that evaluated their risk aversion attitudes, a gang of eggheads from no fewer than three impressive-sounding places of learning found their results suggested testosterone has effects on risk-­sensitive financial decisions and long-term career choices.”

“One moment,” said the chairman. “I’d prefer to be the judge of how impressive these institutions sound myself – which ones are they exactly.” “The University of Chicago Booth School of Business, the University of Chicago’s Department of Comparative Human Development and the Kellogg School of Management at Northwestern University, no less,” I replied.

“They do indeed … er … sound impressive,” nodded the chairman. “Yes, I hadn’t heard of any of them either,” I said. “Anyway, the imaginatively-titled research paper, Gender ­Differences in Financial Risk Aversion and Career Choices Are Affected by Testosterone, explored how, well, testosterone plays an important role in gender differences in financial risk aversion and career choice.

“You see, prior research has shown testosterone enhances competitiveness and dominance, reduces fear and is associated with risky behaviours such as gambling and alcohol use – as I’m sure a stroll around the Scam offices would reveal. However, until now the impact of testosterone on gender differences in financial risk-taking has apparently not been explored.

“As such, it seems this is the first study showing gender differences in financial risk aversion have a biological basis, and differences in testosterone levels between individuals can affect important aspects of economic behaviour and career decisions. The research concludes a bit, well, limply that future studies should further explore the mechanisms through which testosterone affects the brain.

“However, I think there may a gap in the market for some research into how best to keep the City’s testosterone levels in check. After all, surely risk is a bit like a gun – it’s not intrinsically bad, it just depends how it’s used. Presumably, therefore, it’s more a question of how we channel risk aversion – and getting the right balance of men and women in compliance.”

“So were there any other conclusions from the research?” asked the chairman. “After all, I’m not against using a little science in recruitment.” “Well,” I said, “it seems the effects of testosterone on risk aversion are strongest for individuals with low or intermediate levels of the hormone, which is similar to what has been shown for its effects on spatial cognition.”

“And what does that mean in English,” the chairman asked. “I’m not entirely certain,” I replied. “But I’m sure only those brimming with testosterone would conclude it had something to do with being able to park successfully in tight spaces or pack the boot of a car.”

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