The Economist reported today on seemingly irrational money-related behavior observed in men with high testosterone levels.

The study, conducted at Harvard University, looked at testosterone levels in those men who chose to reject an apparently logical choice in a game involving money. Participants were paired with another player, and told that they could split $40 with that player in one of two ways - either they could receive $15 while the other player received $25, or they could accept $5 and leave the other player with $35. There was another option - by rejecting the offer, which would only be made once, neither person received anything.

The researchers found that there were higher levels of testosterone in those subjects who rejected a $5 offer - 5 of the 7 men with the highest levels of testosterone chose to end up with nothing (but equal with the other player), while only 1 of the 19 other subjects made the same decision.

One interpretation is that relative wealth was more important for these men with high testosterone levels. This idea is supported by our own perceptions of relative poverty in the Western world, where almost everyone is enormously more fortunate than many in developing countries.

There are some limitations to the study - $5 vs $15 vs $0 isn’t exactly playing for high stakes in today’s economy, for example. If the stakes had been significant (say $1000 or more), the results may have been significantly different - but the researchers would have ended up significantly poorer!

The Economist article makes a good point, contending that money is a means to attain social status, leading to enhanced reproductive opportunities (that’s some impressive euphemising!) - they suggest that the decisions made by the high testosterone group were not irrational, but were actually rational when viewed from a different perspective.

As someone who played a similar version of this game a couple of years ago, and took the ‘no deal’ route, I have no comment!

OTHER ARTICLES THAT MAY BE OF INTEREST

• Philanthropy worldwide
• Is time the ultimate luxury?
• On bartering
• Passion investment primer
• High Country Club price increase