Tag Archives: Neuroeconomics

Genes and Neurotransmitters Influence Investment Risk-Taking: Implications for Taking Career Risks?

Camelia Kuhnen

Camelia Kuhnen

Brian Knutson

Brian Knutson

Camelia Kuhnen, then of Stanford with her Stanford colleague Brian Knutson and Vanderbilt’s Gregory Samanez-Larkin posit a small but meaningful genetic basis to risk-averse financial investing, providing a biological basis for findings that women hedge fund managers outperformed male counterparts.

Volunteers with two short serotonin transporter genes (5-HTTLPR) reported that they tend to worry, and this pattern was associated with chosing less risky investment choices.

Gregory Samanez-Larkin

Gregory Samanez-Larkin

“Short allele carriers” also showed higher levels of the personality trait “neuroticism,” but no significant difference in cognitive skills, education, or financial status.
Kuhnen estimates that less than 30 percent of variance in risk-taking is attributable to short 5-HTTLPR, and the remaining difference is derived from experience, culture, education, and social environment.

Kuhnen and Knutson reported the neural basis of financial risk taking using event-related fMRI.
They observed that the nucleus accumbens was activated before volunteers made risky choices and made risk-seeking mistakes.
In contrast, they found that the anterior insula was activated before risk-free choices and risk-aversion mistakes.

They proposed that different neural circuits are associated with differing emotions as volunteers anticipate gain or loss associated with financial choices.
This emotional activation “signature” can lead to specific investment choices, favoring or avoiding risk, and may lead to investing mistakes.

In unpublished research, Kuhnen found that short-allele carriers showed increased anxiety before making a decision in a trial-and-error risk discovery task, but reacted no differently than long-allele carriers when they observed a negative outcome.

She noted that volunteers differ in how they anticipate and react to a potential decision before they make it rather that in their reactions to actual outcomes of investment decisions.

Joan Chiao

Joan Chiao

Kuhnen, now at Northwestern collaborated with Northwestern colleague Joan Chiao to investigate the impact of both the 5-HTTLPR gene and the DRD4, gene, which regulates dopamine transmission.
These genes and their related neurotransmitters have been linked to emotional behavior, anxiety and addiction.

Their research replicated Kuhnen’s earlier finding that individuals with two short 5-HTTLPR alleles take 28% less risk than people with other combinations, and they demonstrated that the double DRD4 7 allele carriers took 25% more risk than people with other combinations.
They conclude that serotonin is associated with risk-averse investment choices, whereas dopamine is associated with riskier choices.

Kuhnen and Chiao argue that risky investment behavior shares commonalities with other risky behaviors like drug use, gambling, unsafe sex, dangerous physical and social pursuits, and more.

-*How do you determine the right amount of risk to undertake in career development and financial investing?

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Oxytocin Increases Empathic Work Relationships, Workplace Trust, Generosity

Paul Zak

Paul Zak

Paul Zak, director of the Center for Neuroeconomic Studies at Claremont Graduate Center, and author of The Moral Molecule: The Source of Love and Prosperity, suggests that the hormone oxytocin empathic understanding, generosity (donating to charities, giving money to others in experimental situations), happiness, and trust/trustworthiness.The Moral Molecule

He verified these laboratory-based findings in real-world situations, like a wedding he attended in southern England, prior to which he drew blood samples from the wedding party.

Zak says that oxytocin can be increased by massage, dance, story-telling, prayer, engaging in social media with a loved one, and hugs.
As a result, he “prescribes 8 hugs a day” for better mood and improved “relationships of all types.”

He says that oxytocin can be inhibited by improper nurturing in childhood, stress, abuse, and by oxytocin’s antagonist, testosterone.
Known as the “selfish hormone,” testosterone is also correlated with expressions of power and leadership in the workplace.

One reason women may have challenges expressing these traits in work situations is that their average testosterone levels are ten times lower than men’s.
Zak’s TED Talk

Amy Cuddy

Amy Cuddy

Related Post:

Thoughts change bodies, bodies change minds, roles shapes hormones: Amy Cuddy on “Faking Until It’s Real”

-*To what extent have you seen “eight hugs a day improve mood and relationships”?

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