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    A Neuroeconomics Argument For Gender Equality In Finance - Young Men Are Idiots
    By Hank Campbell | June 25th 2011 04:00 AM | 9 comments | Print | E-mail | Track Comments
    About Hank

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    A wise man once said Darwin had the greatest idea anyone ever had. Others may prefer Newton or Archimedes...

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    It's rare that you will find me arguing for gender quotas.   Obviously I am not for discrimination but, at least in science, mandating representation - which is discrimination against the qualified in the interests of sex organs - does not lead to better science, it leads to equality at the expense of excellence.

    Economics, however, is not science and some mandated equality might help.  Science says so.

    But discussing biological differences between men and women are a no-no in the progressive world of science, so one must tread lightly.    Saying positive things about women being better than men is likely to defuse the more militant people who are apt to engage in knee-jerk hysteria so perhaps I will get a different response than Friend-Of-Obama and former Harvard president Larry Summers when he speculated on a physical basis of why girls do not do better at math.

    Cultural or biological?  Hard to say.   Are women born being more likely to ask for directions if they are lost?   It's hard to know when it's so ingrained in our beliefs that women will ask for directions and men will not that it's impossible to get an honest answer about whether or not women and men really will ask for directions.   

    But this neuroeconomics stuff just looks at results, not origin.   Writing in The Guardian, Tim Adams cites a study showing that in a survey of  2.7 million investors which found in 2008-2009, men were much more likely than women to sell stocks at price lows.   Men were confident they could make accurate assessments about the future based on short-term financial news. Women, the study surmises, were more likely to acknowledge when they didn't know something and lost less money than men did.

    Adams interviewed John Coates, a research fellow in neuroscience and finance at Cambridge.  Coates had once been a bond trader on Wall Street during the dotcom boom.   
    "Steroids," Coates explains, "like most chemicals in your body, display what is called an inverted U-shaped response curve." That is to say, when you have low levels of them you lack vitality, and do very poorly at mental and physical tasks. But as the levels rise you get sharper and more focused until you reach an optimum. The key thing is this, however: "If you keep winning, your testosterone level goes past that peak and sliding down the other side. You start doing stupid things. When that happens to animals, they go out in the open too much. They pick too many fights. They neglect parenting duties. And they patrol areas that are too large." In short, they behave like traders on a roll; they get cocky
    So women, with only 10% of the testosterone of men, might be immune to this 'Winner Effect' that sends men into the bad part of that inverted U.  

    But where was the data to prove it?   Coates volunteered to be the first subject, since he had already been in that business.   And they did studies on other traders and the results were perfect, though far too small a sample to be meaningful.   One interesting aspect was that cortisol levels - the depressive stress hormone - didn't just go up when traders lost money, they also went up dramatically when traders were simply unsure about what to do.  It's like that old argument in the NFL about running the ball - when you throw a pass, five things can happen and four are bad - and two out of three chemical reactions in men that occurred during high-stress trading were bad.  

    As you expect, male traders being told - despite their experience - that they become price insensitive chemical automatons when things get weird and that women would somehow be immune, disagree.   They have a point.  Opinion diversity obviously has value but endocrine diversity?  Well, you have to show more data for that.

    Joe Herbert, professor of neuroscience at Cambridge, said, "What is clear is that there are neurological differences between the sexes. Women, in very general terms, are less competitive, and less concerned with the status of being successful."

    Maybe, he isn't saying all women but the women who are competitive will most likely disagree, which doesn't invalidate his point at all.   Unfortunately, the argument about the downside to  having women present at all - the uber-mensch tendency of men to 'show off for the ladies' - could also be a reason to keep them out of the military's ground-based combat arms even while it would help prevent silliness on Wall Street.

    The prefrontal cortex in humans allows us to delay 'gratification' and essentially think longer term. - but it matures after the age of 30 and happens later in men than in women.   So perhaps rather than instituting a gender quota, we could engage in age discrimination.

    Comments

    Hank
    Thanks to Robert Olley, who was too busy writing about botany to tackle this, so he sent it to me - he can always find the best outrageous stuff.
    Stellare
    Well, it seems to me you are convinced men are more intelligent (better scientists) than men. Why would we otherwise have so many men filling professorships and receiving Nobel prizes etc.

    I beg to differ.

    :-) Of course.

    I do agree that there are gender differences, it is just impossible for us to determine how they manifest themselves because culture is significantly influencing the results - no scientifically sound method will be able to tell us that. And character and talent is also cross-gendering to a large degree.

    So we can keep on fighting (gender fights) to the end of days. hahaha

    It will continue to be entertaining, I'm sure. :-)
    Bente Lilja Bye is the author of Lilja - A bouquet of stories about the Earth
    Hank
    Well, it seems to me you are convinced men are more intelligent (better scientists) than men. 
    I didn't say that, I have simply said firing a lot of men right now in order to artificially impose gender equality would be bad for quality.  At least in the US there is no difference today in women getting faculty positions and women get more PhDs so more parity will naturally occur as time goes on.  Clearly there was discrimination in the past - in the US and Norway - but the solution to discrimination is not to penalize members of the other gender today who may have done nothing wrong.
    Stellare
    women get more PhDs so more parity will naturally occur as time goes on

    Unfortunately it will not.

    And currently , with men getting the faculty positions and other key scientific positions, men are actually being quoted into these positions. Penalizing members of the other gender. :-) If you look at who is filling the lead positions in academia, also in areas where women has been equally qualified for decades, men still end up winning the positions. That is why I cannot but conclude that you are convinced men are more talented than women - since they obviously win the competition.

    Non-scientific criteria is not only gender related, there are other requirements that are being given rank. The world isn't fair. And competition doesn't always result with the best as the winner (some cheat for instance). I think we have agreed to disagree on this before. I just thought I'd repeat it.:-)

    If it were not for what you call discrimination , we would not have had the relatively even distribution of men and women in politics  in Scandinavia.

    I do agree that firing men to give room for women seems a bit drastic and counterproductive in more than one way....

    Bente Lilja Bye is the author of Lilja - A bouquet of stories about the Earth
    Hank
     with men getting the faculty positions and other key scientific positions, men are actually being quoted into these positions. Penalizing members of the other gender
    As I said, I can only speak for America.  In America, and in current new faculty openings (obviously the overall number still skews toward men in some sciences because some men still work at age 80) women not only get hired as often as men, they get hired more than their representation - I don't read discrimination into that, sometimes there will be more men in a field and sometimes less.

    You haven't mentioned the pervasive lack of men in the social sciences.   Women are 49% of biology but over 70% of social sciences.  Is it because men are blocked out of those fields by the women in charge?
    Stellare
    Women are 49% of biology but over 70% of social sciences.  Is it because men are blocked out of those fields by the women in charge?

    I did include all fields in my former comment, my point being that in spite the fact that women are equal in numbers (or in some cases slightly outnumbering men) in some fields, they still do not win the competition for faculty positions. We are perhaps talking about different levels.

    We (I worked with recruitment of women to science, technology and medicine earlier) thought that when women got phd's and even posts docs they could win faculty positions. That did not happen.

    Are you saying that 70 % of all faculty positions within social sciences are occupied by women? Note, not phd's or post docs, but tenure/faculty positions. I am talking about research professorships in particular. This is definitely not the case in Europe...
    Bente Lilja Bye is the author of Lilja - A bouquet of stories about the Earth
    Hank
    I only talk about jobs because the numbers of PhDs are well-known and there is some dominance in some fields, women in social sciences (across the board) and men in mathematics for example, but I have a hard time believing that leftwing academia is discriminating against men or women, though militants in both camps make causation arguments out of every disparity.

    In the lowest National Resource Council number of represented women (math), women made up 20 percent of applicants for positions in mathematics but accounted for 28 percent of those interviewed and received 32 percent of the job offers - women were not only not penalized in jobs, they were over-represented by 62%.   This included tenured positions.

    Are women just better at math?  Maybe.   But we know uber-progressive academia in America is not blocking women out of undergraduate or graduate programs in math so smart women have to become biologists or doctors instead.   Men don't become psychologists as much.   It isn't discrimination, which would be institutional.  Maybe Europe is different, Europe has been around a lot longer and their cultural ways are more ingrained.   
    Are there many female mathematicians? I listen to a report on NPR today remembering the solution of Fermat's Last Therom. It said there are very few people in the world today who can understand the solution. Are any of them women?

    Hank
    Women in mathematics is equivalent to men in psychology and other social sciences.   But a disparity does not mean bias, unless we are contending 70% of psychologists discriminate against men.