Every now and then you come across the unbridled greed and ego of chief executive officers that leaves you wondering what exactly drives their behavior. Now a new study by Maurice Levi, Kai Li and Feng Zhang from the University of British Columbia tells us what it is. It's all about their testosterone.
The study found that younger CEOs were 4% more likely to initiate an attempt to acquire another company than older men. Also, when there was a high testosterone level of CEOs in target companies, the takeover bid was more likely to be rejected, even if that was against the company's interests.
It's a fascinating study because it's modeled very closely on a 2007 study at Harvard University where teams had to agree on how to divide a sum of "free" money or lose the entire sum. High-testosterone men were more likely to reject what they perceived as low offers.
In the 2007 study, participants' mouths were swabbed to measure testosterone levels but in this study, age was used as a proxy for testosterone.
The researchers make the point that given the state of markets and the global economy, it's an area worth exploring. "We hope the present work leads to such further studies, including investigations of critical business decisions based on direct measurements of testosterone. The control of vast economic resources is at stake."
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