Saturday, July 07, 2007

Testosterone and Neuroeconomics

Dr Burnham's research budget ran to a bunch of $40 games. When there are many rounds in the ultimatum game, players learn to split the money more or less equally. But Dr Burnham was interested in a game of only one round. In this game, which the players knew in advance was final and could thus not affect future outcomes, proposers could choose only between offering the other player $25 (ie, more than half the total) or $5. Responders could accept or reject the offer as usual. Those results recorded, Dr Burnham took saliva samples from all the students and compared the testosterone levels assessed from those samples with decisions made in the one-round game.

As he describes in the Proceedings of the Royal Society, the responders who rejected a low final offer had an average testosterone level more than 50% higher than the average of those who accepted. Five of the seven men with the highest testosterone levels in the study rejected a $5 ultimate offer but only one of the 19 others made the same decision.
So while Homo economicus takes the $5 offer, Homo hightestoronius rejects it outright.

Why would people with higher levels of testosterone behave differently?
What Dr Burnham's result supports is a much deeper rejection of the tenets of classical economics than one based on a slight mis-evolution of negotiating skills. It backs the idea that what people really strive for is relative rather than absolute prosperity. They would rather accept less themselves than see a rival get ahead. That is likely to be particularly true in individuals with high testosterone levels, since that hormone is correlated with social dominance in many species.

Economists often refer to this sort of behaviour as irrational. In fact, it is not. It is simply, as it were, differently rational. The things that money can buy are merely means to an end—social status—that brings desirable reproductive opportunities. If another route brings that status more directly, money is irrelevant.
Gotta love the term "differently rational". I have definitely run across quite a few "differently rational" people in my day.

via The Economist


MensaRefugee said...

Let me get this straight.

Out of the $40 in the single pass finale game, there are 2 people. One gets $40 and has to offer the other $5 or $25. If the offer is rejected they BOTH lose the money? Is that right?

Also I would assume when they were on the giving side, the high testosterone peeps gave low-ball offers?

I would rather like to know what the Low IQ/High IQ and Low Testosterone/High Testosterone things interact - but I guess I already know part of the answer as Homo Economicus has a High IQ. See also Here

Fat Knowledge said...

Out of the $40 in the single pass finale game, there are 2 people. One gets $40 and has to offer the other $5 or $25. If the offer is rejected they BOTH lose the money? Is that right?

Yes. Neither side gets money unless they both agree.

Also I would assume when they were on the giving side, the high testosterone peeps gave low-ball offers?

That would make sense, but I don't believe it was in the article.

As for IQ and testosterone, are you wondering if higher testosterone levels lead to higher IQ? I don't know the answer on that that. Maybe the audacious epigone knows.

I do know that prenatal testosterone levels have a big impact on your personality and other traits. This article talks about some of the impacts of higher testosterone levels.

Audacious Epigone said...


It's not something that has been explored in a lot of depth, from what I'm aware.

However, testosterone levels tend to decrease as you move either direction from the middle of the bell curve. Geniuses and dolts tend to have less of it than the average joe does.

I can only begin to speculate why: Perhaps in the mentally handicap something is inhibiting normal growth, including testosterone production, whereas in 'healthy' men, high levels of testosterone is associated with less intelligence. I have no idea.

Fat Knowledge said...

Interesting, thanks.

MensaRefugee said...

Concerning 'differently rational'.

When you think about it, real world - if Person A had to offer Person B the cash, and person B refused, thereby person A and B lose out...the money doesnt disappear - but goes back to person C - the invisible professor in this experiment.

A real world parallel. Thomas Sowell relates in his book "Affirmative Action around the World" that in Maharashta the natives (bottom class) hated the south Indians (middle class invaders) and had pogroms against them but left the Gujaratis (Upper class invaders) unscathed.

(PS read the book years ago, could have the names wrong)

Fat Knowledge said...


I am afraid I am missing what you are getting at.

MensaRefugee said...

Not much really. Nitpicking.

Just that when they say 'differently rational' they are describing their own experiment slightly wrong.

In the case where $40 is not accepted by Chump B because Chump A offered him too low an amount - the implication is evolutionarily Chump B is acting to keep himself from losing relative to Chump A. But the reality is that $40, even in the experiment goes back to the guy who gave it to Chump A & B to play with in the first place - AKA Professor Chimp C.

There's a third party involved. So the conclusion of the experiment should have been refined to "I dont want people close to my station in life to get ahead" (implying there are lots of kinds of people other than "close to my station in life".

But they concluded instead that "I dont want people from Group B to get ahead"(possibly denying the existence of other groups). A slightly different conclusion.

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