Women Take More Risks When They’re Surrounded By Other Women

Taken from here.


Conventional wisdom suggests that women can’t truly excel in finance and business because they take fewer risks than men. After all, testosterone is connected to risk-taking, and women have less of it. As one economics researcher told New York magazine’s Sheelah Kolhatkar last year in an article that summed up this notion, “There is a clear sign that something biological explains risk taking.” That may be — but brand-new research shows that women are significantly more likely to take risks when they’re around other women. Maybe the problem with risk-averse businesswomen is that there just aren’t enough women around.

Alison Booth, an economics professor at the Australian National University, assigned her research subjects to one of three groups: all female, all male, and co-ed. Then she had the groups make choices in a game that had real financial stakes.

Women overall were less likely to take risks than men, no matter what group they were in. But over the course of the eight-week experiment, women on single-sex teams became much more willing to take risks. By the end of the eight weeks, the women in all-female groups were behaving very similarly to men. (Men, intriguingly, were unaffected by the gender composition of their groups.)

“Women, even those endowed with an intrinsic propensity to make riskier choices, may be discouraged from doing so because they are inhibited by culturally-driven norms and beliefs about the appropriate mode of female behavior-avoiding risk,” Booth explains. “But once they are placed in an all-female environment, this inhibition is reduced.”

That means that women’s risk-avoidance is not necessarily natural or unchangeable, a finding that has huge potential implications for the project of getting more women into the C-suite. “Given that risk attitudes can be shaped by the environment,” Booth says, “changing the educational or training context could help address under-representation of women in certain areas.” Hmm, sounds risky. But something tells me we’re up for it.


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