How Attractive Are Your Managers?

Research suggests it’s not such a good idea to hire “model” fund managers.

Having attractive male colleagues can be detrimental for male fund managers and traders, according to a research paper.

“The average man is motivated to increase his desirability, prompting him to accrue money and taking greater financial risks.” —Eugene ChanEugene Chan, of the University of Technology in Sydney, ran four experiments with men and women to ascertain the psychological effects of comparing oneself with other members of the same sex. The results suggested that men are more likely to take greater financial and trading risks when they see attractive men.

“In evolutionary history, men have faced greater intrasexual competition in attracting women as a mating partner,” Chan wrote. “Thus, when the average heterosexual man sees an attractive male, he is motivated to increase his desirability, prompting him to accrue money and taking greater financial risks.”

Chan showed men and women pictures of members of the same gender and then gave them financial tasks to complete. Some saw pictures of people deemed to be more attractive (defined as models from Abercrombie & Fitch and Victoria’s Secret adverts), some less attractive. Each person was then given six financial risk-taking scenarios in the form of choices between a safer and a more risky path to a particular outcome.

The conclusion? Men get competitive over looks as well as pay packets, and can take more risk in an attempt to better their financial position and catch the eye of women.

“Across four experiments, men who see attractive males take greater financial risks than those who do not,” Chan said, “when (1) they perceive their physical attractiveness to be lacking, (2) they have a lower income than the average American man, and (3) they have a mating motive that heightens their instinct to increase their desirability as a mating partner to women.”

However, he went on to emphasize that “both physical attractiveness and financial resources are not necessary, but they merely confer advantages”.

“Indeed, women can raise children without a man’s financial resources,” Chan added.

The results for women who were shown pictures of other attractive women were less convincing, the paper said. Chan said his research had shown “contradictory evidence” on the matter: “Women who see attractive females may take greater financial risks, but the effect is likely weaker and due to some alternate process.”

Chan’s paper, “Physically-attractive males increase men’s financial risk taking”, is available to download here.

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