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 risks huge 1.

2.

3.

4.

5.

6.

Market doing well, subprime lending occurred Subprime loans were collateralised with higher rated debt (collateralised debt obligations – CDOs) Packaged CDO loans sold to other banks House prices fell, causing bank liabilities to increase Fall of market caused trading reluctances from banks 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 male male 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 pay offs.

 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

GENDER THREATS AND MEN’S FINANCIAL DECISIONS 189

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 manipu lations where participants could make social comparisons. There fore, 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, present focused financial risk-taking. We note, of course, that risk-taking does not necessarily lead to undesirable outcomes—men who take risks may indeed increase their fitness potential by attracting more and higher quality mates (Wilson & Daly, 2005), and financial risk-taking may be a wise strategy when considering long-term investment vehicles such as retirement or pension plans. Further more, discounting the future by taking immediate, smaller finan cial gains over later, larger financial gains can be effective in, for instance, competitive social environments where delaying finan cial gains would decrease a man’s current attractiveness (Griskevi cius et al., 2012). However, risky, short-sighted decisions create greater volatility, which left unchecked can have far-reaching consequences, as the recent Stock Market crash so clearly illus trated. Note, for example, that men tend to trade stocks more often than women, but their returns tend to be lower (Barber & Odean, 2001). Women’s investment strategies tend to be more conserva tive than men’s. For example, women’s portfolios contain more Certificates of Deposit (CDs) and fewer stocks than men’s, and women tend to favor safer stocks (Barber & Odean, 2001). Such gender differences in investment strategies have often been attrib uted to women’s aversion to risk or lack of confidence in financial matters (Bajtelsmit & Bernasel, 1996; Carr & Steele, 2010; Dwyer, Gilkeson, & List, 2002; Lewellen, Lease & Schlarbaum, 1977; Riley & Chow, 1992; Zinkhan & Karande, 1991). However, what may be equally or more important in driving these gender differ ences is the competitive masculine culture of the financial world that motivates male risk-taking and future discounting in general, and more specifically, as a means of coping with manhood threats.

Along similar lines the current two experiments did not examine women and gender-threats. Past work has shown that womanhood, as compared to manhood, is not seen as a precarious state that must be continually proved. In addition, gender-threatening feedback arouses stronger feelings of anxiety, threat, and shame among men than among women (Vandello et al., 2008). That is not to say that a woman cannot be seen as a “bad” woman or “unladylike,” but that her status as a woman is not as easily threatened or called into question by others. Thus, womanhood is not fraught with the same precariousness that manhood is. It is possible that gender status threats could cause women to make

less

risky and impulsive financial decisions. The gender threat could make salient the proscriptive gender stereotype that “real women” should avoid risk-taking (Prentice & Carranza, 2002). Without experiments on women, we can of course, only speculate, and future research should investigate the types of transgressions that would threaten women’s gender status, and the influence the threats might have on women’s financial decisions.

Although we did not measure it here, we theorize that social evaluative anxiety mediates the relationship between gender threat and impetuousness. Specifically, the apprehension that men feel about losing manhood status in other people’s eyes leads them to compensate (or perhaps overcompensate) by taking greater risks and seeking immediate rewards. Previous work has shown that manhood threats indeed heighten men’s anxious cognitions (Van dello et al., 2008), and that anxious cognitions are subsequently minimized among gender-threatened men who are able to display their manliness in a physically assertive way (Bosson, Vandello, Burnaford, Weaver, & Wasti, 2009). The current findings suggest another route through which men can restore their threatened manhood and thus reduce their anxiety: by engaging in behaviors that communicate a willingness to take risks and to focus on the

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 ill advised 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

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Jianakoplos, N. A., & Bernasek, A. (1998). Are women more risk averse?

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, 620 –630.

Johnson, J. E., & Powell, P. L. (1994). Decision making, risk and gender: are managers different?

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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

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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.

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, 1449-1458.

Vandello, J. A., Bosson, J. K., Cohen, D., Burnaford, R. M., & Weaver, J. R. (2008). Precarious manhood.

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