I felt suitably chastened after reading this. Illustrative quote includes: "In a fascinating and innovative study, Coates and Herbert (2008) advance the notion that steroid feedback loops may help explain why male bankers behave irrationally when caught up in bubbles." Someone send me a paper if I am wrong but I do not see compelling evidence yet that companies with more women at the top (controlling properly for other aspects of the work environment) behaved more cautiously during the last financial boom period. The final paragraph in the article seems more intuitive to me, namely the short-run assymetric nature of incentives distorted financial behaviour. Once again though, very difficult to test in the wild particularly as companies may adopt such structures in response to other companies adopting them.
http://www.voxeu.org/index.php?q=node/3572
Coates, J. M. and J. Herbert, “Endogenous Steroids and Financial Risk Taking on a London Trading Floor,” Proceedings of the National Academy of Sciences 105, 2008, 6167-6172.
1 comment:
There are probably no financial companies which are run by women or at least there is very little variation in this so it would be difficult to test. The basic notion 'though doesn't seem all that weird. One might speculate that when markets are volatile & upwards that men do well & the converse occurs when its heading south as has happened recently.
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