From molecule to market: steroid hormones and financial risk-taking

Philos Trans R Soc Lond B Biol Sci. 2010 Jan 27;365(1538):331-43. doi: 10.1098/rstb.2009.0193.


Little is known about the role of the endocrine system in financial decision-making. Here, we survey research on steroid hormones and their cognitive effects, and examine potential links to trader performance in the financial markets. Preliminary findings suggest that cortisol codes for risk and testosterone for reward. A key finding of this endocrine research is the different cognitive effects of acute versus chronic exposure to hormones: acutely elevated steroids may optimize performance on a range of tasks; but chronically elevated steroids may promote irrational risk-reward choices. We present a hypothesis suggesting that the irrational exuberance and pessimism observed during market bubbles and crashes may be mediated by steroid hormones. If hormones can exaggerate market moves, then perhaps the age and sex composition among traders and asset managers may affect the level of instability witnessed in the financial markets.

Publication types

  • Research Support, Non-U.S. Gov't
  • Review

MeSH terms

  • Age Factors
  • Cognition / physiology*
  • Dopamine / metabolism
  • Financial Management*
  • Gonadal Steroid Hormones / metabolism*
  • Humans
  • Hydrocortisone / metabolism
  • Hypothalamo-Hypophyseal System / physiology
  • Models, Biological*
  • Pituitary-Adrenal System / physiology
  • Risk-Taking*
  • Sex Factors
  • Synaptic Transmission / physiology


  • Gonadal Steroid Hormones
  • Dopamine
  • Hydrocortisone