BIGtheme.net http://bigtheme.net/ecommerce/opencart OpenCart Templates
Home / Business Financing / What's a Cause of Stock Market Crashes? Too Much Testos…

What's a Cause of Stock Market Crashes? Too Much Testos…

The financial institutions that do work trading on the New York Stock Exchange are predominantly, perennially staffed by men.

And now, a new study from the University of Western Ontario, University of Oxford and Claremont Graduate University has found that testosterone, the hormone found more so in men than in women, can be linked to the decisions that lead to stock market destabilization and crashes.

To figure this out, the researchers constructed their own test case stock market. Before each of the 17 trading sessions, the “traders” — 140 male participants — were either given testosterone or a placebo in gel form. Each session had the participants selling, bidding and offering money in exchange for stock and competed to see who would make the most money.

Related: 5 Things You Need Before You Invest in the Stock Market

The researchers found that when the participants were given testosterone before they commenced trading, it increased the size of the stock market bubbles. The traders put forth higher bidding and selling prices, and their perception of the stock’s value was affected, even though they knew its true value.

In a summary of the study from UWO’s Ivey Business School, the researchers recommended that when trading, to account for this influence, instead of a frenzied decision-making practice, firms should institute “cool down periods” to better assess the real value of the stock on the table.

That’s a good piece of advice for entrepreneurs too. Instead of making decisions right away, cool off for a bit and take in the situation.


Source link

About admin

Check Also

Crypto Debit Cards are Taking Bitcoin Mainstream. How Entrep…

Bitcoin’s got a spending problem, and entrepreneurs are reacting with crypto debit cards to solve ...

Groupon Co-Founder's New Healthcare Startup Raises $70 …

Co-founder of Groupon Eric Lefkosky’s new healthcare startup, Tempus, has raised $70 million in series C ...

13 Easy Investing Apps and Websites for Millennials…

SigFig is another robo-advisor service. It has the highest starting investment level on this list ...

Leave a Reply

Your email address will not be published. Required fields are marked *