Human economic and financial behavior: The serotonergic hypothesis

Abstract

Recent advances in the field of neuroeconomics and behavioral finance have shed new light on the biological correlates of human economic and financial behavior. In this context, a reduced serotonergic activity has been consistently linked to an increased rate of rejection of unfair offers in the ultimatum game (UG), a simple two-person bargaining between a proposer and a responder. Besides serotonin, increased testosterone levels have been associated to rejections of unfair UG offers, as well as to higher financial gains among professional traders operating in the London stock market. Since low serotonin and high testosterone levels in the central nervous system may interact to exert significant effects on the neural mechanisms involved in the expression of impulsivity and aggressive behavior, it is feasible to hypothesize that serotonergic neurotransmission might exert an important influence on investors' choices in real-world financial markets. Future studies in this area should explore whether tryptophan depletion may actually improve (or diminish) investors' trading performance.