In a recent post on the 'Natural Rationality' blog, Benoit Hardy-Vallée mentions research which shows that a trader's morning testosterone level predicts his day's profitability.
The study that Benoit Hardy-Vallée mentions was published recently in PNAS:
J. M. Coates and J. Herbert
Endogenous steroids and financial risk taking on a London trading floor
These authors relate biological measures to risk preferences, which is an interesting development:
"...We found that a trader's morning testosterone level predicts his day's profitability. We also found that a trader's cortisol rises with both the variance of his trading results and the volatility of the market. Our results suggest that higher testosterone may contribute to economic return, whereas cortisol is increased by risk... acutely elevated steroids ... may shift risk preferences and even affect a trader's ability to engage in rational choice".
Benoit Hardy-Vallée also mentions that there is a good summary of the work in Science.
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