Risk Taking, Behavioral Biases, and Genes: Results from 149 Active Investors

19 Pages Posted: 26 Apr 2015 Last revised: 7 May 2015

Anders Anderson

Swedish House of Finance

Anna Dreber

Stockholm School of Economics - Department of Economics

Roine Vestman

Stockholm University - Department of Economics; Swedish House of Finance

Date Written: April 24, 2015

Abstract

Recent evidence suggests that there is genetic basis for economic behaviors, including preferences for risk taking. We correlate variation in risk taking and behavioral biases with two genetic polymorphisms related to the uptake of dopamine and serotonin (7R DRD4 and s/s 5-HTTLPR), hypothesizing that they are positively (negatively) related to risk taking. We use a small but detailed sample of active investors where we combine survey data with DNA samples and data from Swedish tax records that give us objective information about actual economic choices. We find a positive (negative) relationship between the dopamine (serotonin) gene and life expectancy bias, but no other significant correlations between the two genes and behaviors, including risk taking and measures of equity holdings. We acknowledge that our tests suffer from low power originating from the small sample size, which warrants some caution when interpreting these results.

Keywords: Risk taking, behavioral biases, dopamine, serotonin, life expectancy

JEL Classification: G02, D12

Suggested Citation

Anderson, Anders and Dreber, Anna and Vestman, Roine, Risk Taking, Behavioral Biases, and Genes: Results from 149 Active Investors (April 24, 2015). Swedish House of Finance Research Paper No. 15-08. Available at SSRN: https://ssrn.com/abstract=2598483 or http://dx.doi.org/10.2139/ssrn.2598483

Anders Anderson (Contact Author)

Swedish House of Finance ( email )

Drottninggatan 98
111 60 Stockholm
Sweden

Anna Dreber

Stockholm School of Economics - Department of Economics ( email )

P.O. Box 6501
Sveavagen 65
S-113 83 Stockholm
Sweden

Roine Vestman

Stockholm University - Department of Economics ( email )

Universitetsvägen 10 A
House A, floor 4 and 7
Frescati, Stockholm
Sweden

HOME PAGE: http://www.ne.su.se/

Swedish House of Finance ( email )

Drottninggatan 98
111 60 Stockholm
Sweden

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