Despite significant results in the literature, frequently obtained null-results, Type I errors due to small sample sizes and varying gender specific findings suggest that the relationship between 2D:4D and risk taking is difficult to capture. In the context of risk taking, several studies reported positive correlations between 2D:4D (lower PTE) and risk aversion, although a larger proportion reported null findings (See Table 1 for an overview of the literature). 2018), managerial traits (Guiso and Rustichini 2018) and overconfidence (Neyse et al. 2009), reaction to payment scheme changes (Friedl et al. 2013 Galizzi and Nieboer 2015), profitability in financial trading (Coates et al. 2.2 2D:4D and risk aversionĪ number of studies suggested correlations between 2D:4D and economic behavior such as social preferences (Buser 2012 Brañas-Garza et al. Yet, it should be noted that there are also disputes about the connection between 2D:4D and prenatal androgen exposure (McIntyre 2006). ( 2006) show that females with male twins have lower 2D:4D than females with female twins.

Rodents that had been administered testosterone in utero ended up having lower 2D:4D ratios compared to rodents in a control group (Zheng and Cohn 2011). Fetuses with Congenital Adrenal Hyperplasia are exposed to higher levels of testosterone in utero, which yields lower 2D:4D ratios (Brown et al. Male fetuses with Klinefelter’s Syndrome are shown to have lower prenatal testosterone, therefore higher 2D:4D ratios (Manning et al. ( 2013) showed a significant relationship between the prenatal testosterone-estradiol ratio in utero and 2D:4D of infants and newborns. Using direct evidence from the amniotic fluid during pregnancy, Lutchmaya et al. The negative relationship between 2D:4D and PTE has been confirmed with various methods. A smaller 2D:4D is associated with higher PTE and men in general have lower ratios than women (Lutchmaya et al. This is why the ratio between the lengths of the index and ring fingers (2D:4D or digit ratio) is employed as an indirect somatic marker of PTE (Goy and McEwen 1980). Unlike circulating testosterone, taking a direct measurement of PTE through saliva or blood samples is not possible as the exposure takes place during the first trimester of the pregnancy. This null result is consistent both for Caucasian and Asian samples in our study.Ģ.1 2D:4D and prenatal testosterone exposure We find no significant relationship between PTE and risk-aversion in any of the domains. As a result, prospect theory has turned to shaping foraging models as well (McDermott et al. The evolutionary perspective confirms this argument as survival decisions such as foraging or reproduction involve risk taking both in gain and loss domains. This might suggest that the inconclusive results in the literature may be due to the domain-dependent nature of risk preferences. In his recent study, Hermann ( 2017) showed that higher PTE correlates with lower degrees of loss aversion. According to prospect theory (Kahneman and Tversky 1979 Tversky and Kahneman 1992 Wakker 2010), risk preferences may differ between gains, losses and mixed prospects, as well as for different probability levels. This study investigates the relationship between financial risk taking and PTE in the framework of prospect theory. Such a relationship would be supported by the dual inheritance theory (gene-culture coevolution), which argues that human behavior is a combination of genetic and cultural evolution (Boyd and Richerson 1988 Richerson et al. Research on risk attitudes and 2D:4D aims to shed a light on heritability of risk preferences. ( 2006) also argue that 2D:4D might be inherited. First, with the rise of neuroeconomics and interdisciplinarity, economists are trying to understand whether human biology has a partial impact on economic behavior (see Robson 2001, for a thorough discussion). There are two underlying research questions behind increasing interest on PTE and risk attitudes. While several studies showed that higher PTE yields lower risk aversion, many others reported null results. Although studies investigating the association between risk aversion and 2D:4D are the most widespread in this literature, the results are not conclusive. 2009), competitive bidding (Pearson and Schipper 2012) or managerial activities (Guiso and Rustichini 2018). This relationship has attracted the interest of economists, who studied its role in various contexts including social preferences (Buser 2012 Brañas-Garza et al. Prenatal testosterone exposure (PTE) has organizational effects on the fetus’ brain and endocrine system development and it may thereby have a systematic influence on subsequent behavior (see Manning 2002, for a review).

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