Slashdot Mirror
Study Shows Testosterone is Bad For High-Stakes Decisions
itwbennett writes "According to a study by researchers at the University of British Columbia's Sauder School of Business, young CEOs with higher levels of testosterone in their system are 'more likely to initiate, scrap or resist mergers and acquisitions' — even when it's not in their best interest. 'We find a strong association between male CEOs being young and their withdrawal rate of initiated mergers and acquisition,' says Prof. Levi, whose research relies on the established correlation between relative youth and increased levels of testosterone. 'For instance, young CEOs, who have higher levels of testosterone, tend to reject offers even when this is against their interest.'"
Oh geez, this is just stupid. At least the headline is stupid. There's nothing in TFA to suggest that testosterone as such has anything to do with! It's just age and presumably experience. Geez.
Make castration a standard step of getting an MBA?
One way or the other its bound to make the world a better place ;-)
People replying to my sig annoy me. That's why I change it all the time.
Young CEOs are not in the same position as their older counterparts. Thus, the decisions they make may be based on another factor.
How did they control for experience? Pump old guys full of testosterone?
Actually, no, if you actually RTFA (I know, I know, it's Slashdot), you'll find out that no, it's also based on a study where they actually asked people to play a sort of game, and they actually measured testosterone levels. Those who had more testosterone, tended to be more competitive even when it resulted in losing the game.
In fact those with high testosterone levels ended up doing things as irrational in any imaginable circumstance as to basically reject an offer of free money, just because they perceived it as being too low. You don't want someone like that making economic decisions.
Just age and experience had nothing to do with it. Those test subjects who were just as young but more deficient in the testosterone department tended to take more rational decisions.
Basically, thinking with your dick is bad. The stereotype of the Real Man with real balls may have been a plus when it came to making him do dumb stuff like going to get stabbed at for his king, but it turns out to be a liability when the job requires more thinking with the head upstairs than with the one below the belt. You want someone taking economic decisions because they make logical and mathematical sense, not because it's his kind of measuring dick size against the partners.
A polar bear is a cartesian bear after a coordinate transform.
while others are?
are 'more likely to initiate, scrap or resist mergers and acquisitions' — even when it's not in their best interest. '
'For instance, young CEOs, who have higher levels of testosterone, tend to reject offers even when this is against their interest.'
First of all it says "even when it's not in their best interest". This is a strange claim. CEOs are not supposed to make decisions that are in their best interest anyways, they are specifically supposed to make decisions that are in their company's best interest, and in particular, that best serve the shareholders of their company. To intentionally do otherwise would be reckless, not what they agree to do by becoming CEO, and could get them sued, nonetheless.
Second of all what is in a person (or company's) best interest is subjective. To claim they are acting against their interest, you are applying prescriptive measures --- that they in your opinion should do certain things. For example "facebook should have agreed to merge with twitter". That is your opinion, which might or might not bear out.
To cast a point of view about whether it was in their best interests or not is "in retrospect". In retrospect it is always easy to say someone should or should not have done that, knowing the outcome. Not knowing the outcome, it is not so clear, and they are CEO there, not you, which is presumably out of some merit.
“We find a strong association between male CEOs being young and their withdrawal rate of initiated mergers and acquisition,” says Prof. Levi, whose research relies on the established correlation between relative youth and increased levels of testosterone.
I sense a case of post-hoc ergo propter hoc here.
Perhaps a better explanation would be, they are young, so they are as individuals less experienced, less wise, their age could have something to do with it.
Also, the fact that they're male doesn't mean testosterone -- if a different pattern was observed in females, there would be other differences besides testosterone difference.
You can't have an anecdotal study and have it be a legitimate study. You can't rely on knowing the fact that males of that age tend to have higher levels of testosterone and assume these groups of CEOs have higher levels of testosterone because they fall into that age category.
If you drew blood, you might find a totally different correlation between these CEOs and low levels of testosterone. Without even sampling the variable you are trying to make claims about, this is not an experiment, and not science.
Studies that overlap with common sense, and are pure statistical bias, are useless. Common sense already give us the tip that a young CEO will be more prone to see things as a "fight". But that tip is not usefull, THE ceo we have here can be young, and still be inclined to accept a merge. Statistical bias means nothing wen we face individuals. Only if we where doing 900 merges daily, will mean something.
-Woof woof woof!
I cannot manage to find the title by searching, maybe someone can help me remember the exact title of the excellent (made-in-UK) PBS show I saw once on this exact topic, most likely Nature or Nova. Here is what I remember...
The star of the show turned out to be an "Investment Banker", his readings showed strong but controlled hormone swings as he calmly steered his go-kart around the track to an excellent time, while others with higher testosterone levels spun out. He could pick up an egg with a backhoe, and wasn't too bad at changing a baby. At the end they compared their finger lengths to confirm this was a good predictor of hormone level.
ALSO there was a WOMAN with a high testosterone level, she was the only one of the women who could pick up an egg with a backhoe, and she was some kind of aerospace engineer in real life.
...not politically correct to call politicians...
I see what you did there...sneaky...
You tried to inject one of the biggest, baddest, most highly concentrated Oxymorons known to mankind('politically correct') into a funny jab at politicians!
You tricky devil. ;-)
Down With Slashdot BETA!!! I've been around the corner and seen the oliphant; you can only abuse me from your perspecti
Apart from producing a more successful brand (geld?) of CEO, it will also test just how badly they really want the job. Of course the test can only be carried out once - unless you relieve them of a single testicle first, to see how they get on, with the option of taking the remaining one if they do dumb things. ..... That, itself might be all the motivation they need.
A handy side-effect would be a reduction in the number of sexual harassment suits against top executives.
politicians are like babies' nappies: they should both be changed regularly and for the same reasons
Like arguments with women?
I've calculated my velocity with such exquisite precision that I have no idea where I am.
Yeah I know, life's a b*ch. What else is new?
Free, as in your money being freed from the confines of your account.
Young men are more impulsive than old ones. But I don't work for a business school, so you should just reject that as anecdotal evidence.
From scarped cliff or quarried stone she cries "A thousand types are gone, I care for nothing, no not one."
Oh, hang on - probably the most idiotic decisions of the late 20/early 21st century were made by old guys. Maybe there should be a modifier for senility as well.
politicians are like babies' nappies: they should both be changed regularly and for the same reasons
More anti-male blindness, demonizing, and beyond-the-pale gynocentrism. It doesn't seem to matter that everything we have as far as science, industry, technology, and government comes from male agressive creativity -- testosterone mediated inventive behaviors. The passive "doership" of the estrogenoni seems to be the only good and useful thing in our politically correct society. I guess James Watt, Maudsley, Edison, Ford, Einstein, Jobs, Gates.....were all making bad testosterone-filled mistakes. Far from mistakes, they made good, aggressive, risk-taking decisions driven by testosterone. It is more likely that the half of the human population that does not do these things is poisoned by its estrogen into being passive to the point of making NO decisions than possibly wrong aggressively creative decisions. Researchers, stop the constant male bashing.
E Proelio Veritas.
Actually, on the contrary, I think that if anyone did a serious statistic, they'd find that the only reason they're now big companies instead of also ran, is that at some point down the line they made a decision that made sense. Like, dunno, Sharp realizing that there's a more lucrative market for radios than for pencils, or someone at IBM realizing that there's a business case for smaller and cheaper computers ("smaller" those days meaning "than a room"), or some crazy guy called Edison believing they can make money with those newfangled lightbulbs although they cost more than an oil lamp at first, and so on. While they may have been riskier propositions than just doing the same old thing, they were all actually quite rational business decisions and someone had a very good idea why they expect a R in ROI.
The companies where the decisions were taken with the dick, and just to establish alpha male status... well, you can look at 90% of the dot-coms for an example. That's people who blew all the money on alpha status symbols, be it cars costing more than the company's total income, luxurious headquarters they couldn't even afford, whole sports teams, or even just a bigger herd of programmers than the Joneses' dot-com, or did acquisitions of other dot-coms that also had no income, just for the sake of showing the whole world who's the daddy now.
The companies led by a dick thinking with the dick aren't the Fortune 500 list, but those 80% of startups that fail right away.
A polar bear is a cartesian bear after a coordinate transform.
Some other points to make are:
#1. How they define 'in who's interest'. The question is whether or not the supposed 'young and brash' males believe the 'deal' to be in their interest.
#2. They are young and do not have the same level of 'life experience' and 'tempered wisdom', regardless of their "testosterone" levels as their older counterparts.
#3. They may be more likely to believe that they can lead their companies to better victories ("deals") than those presented by the "researchers".
#4. It may be that they do not "compute" the "value" of the "deal" in the same manner as the researchers (which seems pretty obvious to me they don't).
#5. Other studies have shown that corporate CEO's tend to be better at 'lying' and often seem to have near-psychopathic personalities. How is this accounted for in the study?
#6. If women are so darned good at running and managing big corporations-- where are they? Money talks-- if that's one of their supposed "strengths", then how come the business world hasn't employed them in that capacity for eons? You can't trot out "the old boy's network" on this one-- we're talking world-wide, different cultures, different eras, and in the one field where nothing much matters except the return on investment. If women are so great, why aren't they *already* out running companies?
#7. Women *do* make good assembly line workers for electronics manufacturers. That is an area where their "innate gifts" have proven to be effective. Also telephone operators. Stuff that's boring and repetitive, they're pretty good at.
The sad thing is, they realize the problem of proxying testosterone by age and spend a couple of pages hand waving it away and fail pretty badly... Your gut feeling is correct, no need to read the paper.
"We find a strong association between male CEOs being young and their withdrawal rate of initiated mergers and acquisition," says Prof. Levi, whose research relies on the established correlation between relative youth and increased levels of testosterone.
I sense a case of post-hoc ergo propter hoc here.
I was disappointed (but not surprised) to see this in the summary. It says right in the summary that this study is completely flawed bullshit, but it was posted here anyway. Couldn't find any real nerd news, huh? Thanks for making slashdot grate, samzenpus.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
How does this theory jive with the notion that young men today (at least in the US) have significantly reduced levels of testosterone compared to our fathers and grandfathers?
Yuk-yuk... I kid, folks! (except not really)
Just because someone has natural levels of testosterone, you can not say you are studying the results properly, as there are way to many factors at normal levels to understand the associations, however if you were to actually give them testosterone at a much higher level then normal, this would prove that testosterone is the main factor in the decision making whether bad or good.
If I take no test, but have natural levels, and also have natural levels of xxx, yyy and zzz, which are all known to inhibit or accent testosterone levels, then it is not a proper study, unless i were to push the testosterone levels to a level which is unnatural (but safe)
and then would be able to overlook any effects that other xxx,yyy,zzz drugs or hormones might have on those levels.
This is like saying that blue eyed people make better decisions then green eyed people, unless you could technically sport a new set of eyes, and compare that same person before and after and say the improvement comes from the eye color, the point is useless as a comparison.
Thanks for wasting our money, must be tax payer's that footed this bill?
Sex hormones can affect you a lot, at least some people. I used to be among those who insisted psychological differences between men and women were cultural, or due to upbringing and whatnot, then eventually I came to the point where I could no longer go on suppressing my feelings, and I called up a gender identity clinic, explained I felt fairly certain I'm transsexual, that I had tried my very best just living as a man , accepting it and that I just couldn't do it anymore. At the time I think I had pretty much ceased to eat out of depression.
Since then I've had most of my testosterone replaced with estrogen, and aside from very rapidly ( within weeks ) making me feel better than I even thought was possible, it has also caused a lot of other changes. Some of which are quite common among people in my situation, others are more individual. It's hard to determine which changes are due to the hormones and which are merely due to feeling more comfortable with my body, but some are so common and well documented that psychiatrists and endocrinologists more or less assume them to be hormonal. There's always exceptions, and the effects are variable and individual, but the following is frequently described:
Reduced sex drive
Increased appetite
A change in orgasmic pattern, moving it closer to that described by women
Increased skin sensitivity.
The last bit is actually likely due to the skin going thinner and hence a physical rather than psychological change. Bruises also stay visible longer, acne tends to improve, and many have trouble with dry skin. For me the last bit was so bad I developed severe rashes and had to go on a course of cortisone treatment. Nowadays I can keep it in control with normal skin lotion however.
Now I don't mean with this that all stereotypes you hear about men and women are true, or that this particular study is even worth the paper it is written on. After all I'm arguably quiet different from most people ( or otherwise I would never had to do this ), and hence my experiences or those of people similar to me can't really be extrapolated to the rest of the population.
However I can tell you one thing for sure. Hormones can do a lot of things to a person. Some people want to insist I'm just imagining it or that it may be a placebo effect or similar. It's a real pity the physical effects ( like breast development ) are partially irreversible, because otherwise I could just tell those people to go try for themselves. It really does affect you quite a bit.
I always wince when I hear about CEOs or traders being highly compensated because they have good "instincts." It seems like we're rewarding people who make the most aggressive, risky decisions and then simply luck out. In a large enough systems we'll always have some people succeeding with this kind of decision-making. Once they're in a position of power they are just as likely to make mistakes (past luck being no indicator of future luck), but by then they're in a system where rewards and bonuses are barely tied to performance.
High levels of testosterone leads to stupid decisions. Isn't that the whole premise behind things like MMA and "Jersey Shore?"
well..M&A deals are usually not all that they are touted about anyways. The only parties that actually benefits from M&As are the investment banks and the lawyers. Everyone else loses. Including the 2 merging/acq firms. So, if high testosterone in CEOs causes the M&A deals to fall through, so be it.
"Madame Curie" vs "the Williams sisters"( as in Tennis ), hmm... Unlike a number of top ladies, it seems beyond doubt that the Williams sisters are indeed women, but Serena in particular shows such brute strength. The Google query ( Serena Williams hormones ) returns much ugly chat, but pure scientists have gotta wonder what's going on there.
Not surprising that testosterone affects high stakes decisions. The decision to "stop and break out the condom or not" is proof.
boycott slashdot February 10th - 17th check out: altSlashdot.org
Some women called in from 500,000 years ago, they'd like their common knowledge back.
As a great snake handler in Rapid City SD once put it "Rattlesnakes and testosterone are a lethal combination; like alcohol and testosterone, gasoline engines and testosterone, fireworks and testosterone...well, pretty much anything can be fatal when combined with excessive amounts of testosterone, sometimes creatively so."
-Styopa
But the sort of people who become CEOs are precisely the ones most likely to be self-centred and self-interested.
To have a right to do a thing is not at all the same as to be right in doing it
I decided to remind her that not everyone reads the stupid parts of the Internet and said, "Ah, the wonders of mistaking correlation for causation." She seemed quite surprised.
I wonder if the opposite is also true. Perhaps those with lower testosterone tend to accept mergers & acquisition offers when it is not in their best interest.
'We find a strong association between male CEOs being young and their withdrawal rate of initiated mergers and acquisition,..."
It's only a problem with the young CEOs. because as you get older and wiser, you finally realize that the withdrawal method does not work.
I think its all about the underwear.
Women tend to wear silky, smooth underwear, or maybe nylon with some lace.
Whereas men tend to wear itchy, scratchy old boxer shorts or briefs, which would naturally make anybody cranky and hard to get along with.
So its no wonder that the young males were predisposed to making different decisions.
Did any of the researchers factor out the difference in the underwear ???
I think not.
Clearly the research and all of its outcomes is totally biased, and the real answer is 'It depends.'
"Why is it assumed that the path with the highest short-term payoff is the rational one? What if you actually care about what the company that you oversee does?"
Because everyng else being equal (and since you don't intro other variables, that's what it has to be assumed), the highest short-term payoff of today puts you in better position to get into the better short term payoff of tomorrow too. Complete induction kinda shows that not to be a bad strategy.
"you want a CEO with just the right balance of gambling on growth versus security and stagnation."
Problem being that you will only know for certain where the right balance point were after the fact.
Except perhaps if they're young and male and haven't necessarily yet fully matured their ability to be self-centered and self-interested? :-)
The original article compares males to females, not younger males to older males.
It might be the case that higher estrogen give better results in how mergers and acquisitions are handled, but higher testosterone resulting in more defensive or offensive behaviors would make sense given it's affect on aggression.
I found the BBC video, if you go to YouTube and enter "SECRETS of the sexes 1-3", and skip to the 2:00 mark, where you see a guy hauling brains out of a refrigerator. This provides good context for the 3:40 discussion of how women really DO use both sides of their brain, in this case to process audio. Which sets up for the beginning of the go-kart-race at 4:50. The go-kart-race is interleaved with other scenes, continuing over into "SECRETS of the sexes 1-4", which kicks off with that real-time-graph of hormone levels as Lloyd tries to catch-up-to Jamie, which is what I thought of when seeing the topic of this discussion.
Nash Equilibrium has a definition. Look it up. http://en.wikipedia.org/wiki/Nash_equilibrium.
Really, I'm not trying to be clever with my signature.
"I am stunned that what I was implying, both in my words and in the quote, failed to reach you."
It might be because YOU DIDN'T IMPLY A DAMN. Maybe you meant to imply something, but you didn't and I carefully made that clear.
"It's very clear that short-term sacrifice often pays off long-term."
No: it's never "very clear". I'll tell you what *is* very clear: that a dollar in my pocket is a dollar I can count on. Everything else is rationale and as such, subject to interpretations and -again, as such, you'd better have a solid case to support your "you should sacrifice the money you have at hand now in order to get much more tomorrow" or else it won't work.
"I suspect that you would like to think that the status quo in public corporate law is a law of the universe."
I don't. But there's one thing clear; it is a matter of fact: things are the way they are.
"it is not, it is just an artifact of our system."
Whatever. They still are the way they are.
"It is not hard to imagine a regime where officers are not punished for doing the right thing, whether it is a matter of long-term economics or even "mere" ethics."
Of course it's not hard. What is hard is to come with a metric that will allow us to know what the (your) right thing *is*. Because without a metric is a matter of opinion and as long as it's a matter of opinion, those with the power to make their opinions prevail are the ones that will tell what "right" in fact is. As it is now the case, and they clearly vote with their money and that currently means favour short terms profit, damn with anything else (which, as I already stated, lacking strong evidences and/or better reasons to counter is not such a bad policy).
"It is also not hard to imagine a regime where officers are not accountable for the speculative price of shares."
Like... which one? It's not hard to imagine that there is *a* regime where officers are not accountable for the speculative price of shares. It's quite more difficult to tell exactly *which* regime is that. But, hey, you are free to offer your opinion. If it's not that hard, you surely will convince me with ease.
"Just because something is technically legal doesn't mean you should be compelled to do it."
You make it sound it as an argument but, who did say anything different?
"This is not just game theory"
This *is* game theory.
"you can't measure everything in dollars"
Who said game theory was exclusively, or mainly, or even liminary related to dollars?
"and we abandon human decency at our civilization's peril."
False again. There's an old motto: first step to recover from an illness is being able to recognize you are ill. You seem to defend that current state of affairs is somehow due to a few of bastardly, almost out of the human species individuals instead of a matter of each and every one of us being the way that we are. Good luck making any change about current situation starting from false asumptions.
Thanks, that's great advice. Maybe you should look it up too, it will help you understand my argument in one of the other threads.