The paper highlighted this week adds a thought provoking dimension to a discussion that’s been ongoing for some time; the one about how differently men and women operate in markets.
It suggests a rethink of the notion men were responsible for the recent financial crisis, due to their higher risk taking proclivity. It also sheds useful light on how cultural bias can affect gender behavior and is part of a body of work now coming from social scientists that suggest a lot of earlier experimentation may have been off; especially if it involved using (mostly) white Western college students, as lab rats.
Jianxin Wang, Daniel Houser and Hui Xu from the Central Southern University, the George Mason University and the Beijing Normal University respectively, ran parallel tests in the U.S. and China on all-male, mixed and all-female groups to see who the biggest risk takers would be.
They discovered the all-women U.S. group did show a lower risk taking appetite then either the all-male American or all-male Chinese groups; but here’s the zinger. The all-women Chinese group showed just as much risk appetite as both the American and Chinese all-male groups.
They fumble for reasons but the important point has been made. Men and women are different, surely, but many of these differences are only partly congenital and societal context is a major unexplored area for gender bias experimentation.
Do women then really make better Fund Managers than men? That’s the conclusion of most of the literature I’ve seen on the subject; but is it true in Russia, India or Qatar? They may in the U.S.; but if this paper’s work is followed to it’s obvious conclusion perhaps, at least in China, they don’t?
The paper in full can be accessed by following this link Females and Bubbles.
Happy Sunday.