Intrepid, Imprudent, or Impetuous?

Intrepid, Imprudent, or Impetuous?: The Effects of Gender Threats on Men's Financial Decisions Weaver, J. R., Vandello, J. A., & Bosson, J. K. (2012)

A critique by Charlie French, Ben Longbottom, James Mackenzie, Tom Randon

The Financial Crisis of 2007-08  A multitude of contributing factors have been suggested, including risk  A major cause was subprime lending, which included huge risks 1. Market doing well, subprime lending occurred 2. Subprime loans were collateralised with higher rated debt (collateralised debt obligations – CDOs) 3. Packaged CDO loans sold to other banks 4. House prices fell, causing bank liabilities to increase 5. Fall of market caused trading reluctances from banks 6. Government stepped in

Background to the study  Risk’s role in the financial crisis and who took these risks  Wall Street’s hyper-masculine culture (Martin, 2009)  Testosterone levels have been linked with risk (Coates & Herbert, 2008)  Men are less risk averse than women (Jianakoplos & Bernasek, 1998)  Men take more risks and discount future rewards in malemale environments (Griskevicius et al., 2012)

Overview  Investigated the role of masculinity in the financial crisis  Two experiments focused on challenging male masculinity and how they reacted in financial decision situations  Both experiments found significant effects  First experiment explored the prediction that risk taking becomes more attractive under the threat of manhood (Prentice & Carranza, 2002)  Second experiment explored the prediction that men seek imminent rewards to prevent anxiety from manhood threats (Vandello et al., 2008)

Experiment 1  Experiment served as a test of two competing hypotheses  Hypothesis 1: Men who perform the gender threat condition will take greater financial risks (i.e. place higher bets), as a way of compensation  Hypothesis 2: Gender affirmation men might take greater risks as they may have assimilation effects  38 students, all heterosexual males  Two groups:  Group 1: Gender Threatening – testing a fruit scented hand lotion in a pink bottle.  Group 2: Gender affirmation task - testing a power drill

Experiment 1 Method  The participants then played a gambling game, with a die and had to bet on whether it would show an odd or even number. (2/1 odds)  Game was repeated 5 times  All given $5. Could place bets of $0, $0.25, $0.5, $0.75 or $1  The experiment was videoed to give an audience effect

Experiment 1 Results

Average bet

Average no. of max bets

Experiment 1 Results  They found evidence to support hypothesis 1  Men whose gender was threatened (hand lotion) placed higher bets in each individual round compared to the men whose gender was affirmed (power drill)  29% more money as an average

 The threat manipulation had its strongest effects on earlier bets and was attenuated by the last bet  Hypothesis 2 was rejected

Experiment 1 Critique  Insufficient sample size and demographic  No true control  No female comparison offered, so gender threats might not just apply to men  Women in positions of power take as many risks as men (Johnson & Powell, 1994)

 Between subjects design  Individual differences in risk taking

Experiment 1 Critique  Audience simulation via a video camera  The study is a simulation and does not consider real life data.  Wong & Caducci (1991) tested real life examples, hence possibly conducting a study of greater validity?

 Gambling risk results vs. day-to-day risk results in reaffirming masculinity  Shortfalls in the generalization of findings

Experiment 2  Examined the effect of gender threats on men’s motivation to seek immediate over delayed rewards, and whether this motivation is increased when in a public context.  The final sample consisted of 73 heterosexual men.  The age of the participants ranged from 18 to 43 years old. (median = 20).  The design was a 2 x 2 between subjects design.

Experiment 2 Method  To manipulate gender threat, men were asked to recall either 10 specific behaviours (gender threat condition) or 2 specific behaviours (gender affirmation condition) from the past month that demonstrated them as a “real man”.  This was an adaptation of a procedure developed by Schwarz et al. (1991).

Experiment 2 Method  In the second half of the experiment, participants completed a financial decision questionnaire.  7 items to measure participants’ preference for immediate, smaller financial payoffs versus delayed, but larger financial payoffs.  Smaller sum of money tomorrow, or a larger sum of money in 90 days.  Modified from Griskevicius, Tybur, Delton, and Robertson (2011).

 Half of the participants were told they would be videotaped after the questionnaire and have to explain their choices.  Other half thought that no one would see their responses.

Experiment 2 Results  Men who listed 10 “real man” behaviors (M = 6.36, SD = 2.17) rated the listing task as more difficult than men who listed two “real man” behaviors (M = 4.35, SD = 2.28), F(1, 71) = 14.92, p < .001, d = .90.  In addition, men who listed 10 behaviors reported feeling significantly less masculine (M = 6.42, SD = 1.54) compared to men who listed two behaviors (M = 7.01, SD = 0.88), F(1, 71) = 4.10, p = .047, d = .47.

Experiment 2 Results

ted by the American Psychological Association or one of its allied publishers. for the personal use of the individual user and is not to be disseminated broadly.

GENDER THREATS AND MEN’S FINANCIAL DECISIONS

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Figure 3b. Average dollar amount forfeited as a function of gender threat and audience (Experiment 2). Error bars represent standard errors of the mean.

placed higher bets following the product testing of a power drill. In fact, we found the opposite—men who tested a feminine hand lotion became more risky. The results also cannot be explained simply as a contrast effect in automatic behavior (Dijksterhuis et al., 1998). Contrast effects tend to occur following priming of specific exemplars (e.g., Albert Einstein before a test) that evoke social comparison. Neither of our experiments involved manipulations where participants could make social comparisons. Therefore, it is likely that the effects are driven by the anxiety produced by threatened manhood. However, it would be interesting to see if priming gender-threatened men with an exemplar (e.g., a “manly man” like Chuck Norris) would decrease their risk taking. Together, the experiments presented here suggest a sensitivity to manhood threats that motivates a mindset of impetuous, presentfocused financial risk-taking. We note, of course, that risk-taking

Riley & Chow, 1992; Zinkhan & Karande, 1991). However, wh may be equally or more important in driving these gender diffe ences is the competitive masculine culture of the financial worl that motivates male risk-taking and future discounting in genera and more specifically, as a means of coping with manhood threat Along similar lines the current two experiments did not examin women and gender-threats. Past work has shown that womanhood as compared to manhood, is not seen as a precarious state that mu be continually proved. In addition, gender-threatening feedbac arouses stronger feelings of anxiety, threat, and shame among me than among women (Vandello et al., 2008). That is not to say th a woman cannot be seen as a “bad” woman or “unladylike,” bu that her status as a woman is not as easily threatened or called int question by others. Thus, womanhood is not fraught with the sam precariousness that manhood is. It is possible that gender statu

Experiment 2 Critique  Better sample size and choice of experimental design.  Insufficient demographic (median age = 20).  University student sample unlikely to be an accurate representation of a population.

General Critique  States it is only investigating the causes of the US financial crisis but the financial crisis was worldwide.  Ethnic background of participants taken into account but not financial background.  Experiment 1  Age range = 18 to 40, median age = 19

 Experiment 2  Age range = 18 to 43, median age = 20  Deery (1999)- young people more likely to underestimate risk.

 Differences between the two experiments methods.

General Critique continued…  Wording used by experimenters.  The study has low ecological validity.  Although the principal has validity and the rationale is backed up well with literature, is it really relevant?  Lack of control groups.  No female participants.

References Critique  56 total references.  Year that references where published range from 1972 to 2012.  28 references where published in the 2000’s and 21 in the 1990’s.  Journal with most references is Journal of Personality and Social Psychology.  Not only Psychological journals used.

 On occasions, the authors make statements without using references to back them up, e.g. “the crisis was at least partially caused by a series of illadvised gambles” and “When their manhood status is perceived to be threatened, men become motivated to take restorative actions.”  Authors sometimes use multiple references to back up statements, which is good, but do not explain studies referenced.

Evidence to support the study  Manhood requires continual proof (Bosson & Vandello, 2011)  Evolutionary view towards threatening manhood (Wilson & Daly, 2005)  People in high positions of power have lower EQ (Galinsky, Gruenfeld & Magee, 2003)  ‘The London Whale’ case study

Evidence opposing the study  Higher cortisol levels cause an increase in risk taking (van den Bos, 2009)  Tenuous links to the financial crisis  Incorrect pricing of risk in the run up to the financial crisis (Simkovic, 2009)  When did the ‘threatening of manhood’ occur?  Banks became more risk averse when they ran into trouble  Trading works both ways, where there in someone losing, someone is benefitting

Future research and implications of the study  This study shows that manhood can be threatened and bigger risks will be taken when manhood is threatened.  Fewer men in the same workplace.  May want to carry out the study including women.  Scope for exploring the genetic basis of risk takers.(Dreber et al, 2009)

References  Baron-Cohen, S., & Wheelwright, S. (2004). The empathy quotient: an investigation of adults with Asperger syndrome or high functioning autism, and normal sex differences. Journal of Autism and Developmental Disorders, 34(2), 163-75.  Bosson, J. K., & Vandello, J. A. (2011). Precarious manhood and its links to action and aggression. Current Directions in Psychological Science, 20, 82–86.  Coates, J. M., & Herbert, J. (2008). Endogenous steroids and financial risk taking on a London trading floor. PNAS Proceedings of the National Academy of Sciences of the United States of America, 105, 6167–6172.  Deery, H. (1999). Hazard and Risk Perception among Young Novice Drivers. Journal of Safety Research, 30 (4), 225-236.  Dreber, A., Apicella, C. L., Eisenberg, D. T., Garcia, J. R., Zamore, R. S., Lum, J. K., & Campbell, B. (2009). The 7R polymorphism in the dopamine receptor D4 gene (DRD4) is associated with financial risk taking in men. Evolution and Human Behavior, 30(2), 85-92.  Galinsky, A. D., Gruenfeld, D. H., Magee, J. C. (2003). Journal of Personality and Social Psychology, 85(3), 453-466.  Griskevicius, V., Tybur, J. M., Ackerman, J. M., Delton, A. W., Robertson, T. E., & White, A. E. (2012). The financial consequences of too many men: Sex ratio effects on saving, borrowing, and spending. Journal of Personality and Social Psychology, 102, 69–80.  Jianakoplos, N. A., & Bernasek, A. (1998). Are women more risk averse? Economic Inquiry, 36, 620–630.  Johnson, J. E., & Powell, P. L. (1994). Decision making, risk and gender: are managers different? British Journal of Management, 5(2), 123-138.  Martin, C. E. (2009, June 27). Was the economic meltdown a crisis of masculinity run amuck? It’s time for women to step in. Alternet. Retrieved November 26, 2013, from http://www.alternet.org/

References  NCRW (2009). Women in fund management: A road map for achieving critical mass– And why it matters. New York: NCRW.  Prentice, D. A., & Carranza, E. (2002). What women should be, shouldn’t be, are allowed to be, and don’t have to be: The contents of prescriptive gender stereotypes. Psychology of Women Quarterly, 26, 269–281.  Simkovic, M. (2009). Secret Liens and the Financial Crisis of 2008. American Bankruptcy Law Journal, 83, 253.  van den Bos, R., Harteveld, M., & Stoop, H. (2009). Stress and decision making in humans: Performance is related to cortisol reactivity, albeit differently in men and women. Psychoneuroendocrinology, 34, 1449-1458.  Vandello, J. A., Bosson, J. K., Cohen, D., Burnaford, R. M., & Weaver, J. R. (2008). Precarious manhood. Journal of Personality and Social Psychology, 95, 1325–1339.  Wilson, M., & Daly, M. (2005). Carpe diem: Adaptation and devaluing the future. Quarterly Review of Biology, 80, 55–60.  Wolf, W. C., & Fligstein, N. D. (1979). Sex and authority in the workplace: The causes of sexual inequality. American Sociological Review, 44(2), 235-252.  Wong, A., & Carducci, B. J. (1991). Sensation seeking and financial risk taking in everyday money matters. Journal of Business and Psychology, 5(4), 525-530.