Look sharp, gentlemen. The next time you’re playing a game of chance like poker or trading on the stock market, make sure you steer clear of the hottest guy in the room. Apparently, there’s nothing like the sight of a good-looking rival to goad you into throwing caution to the wind and taking greater financial risks.
[Top Image Credit: Dakota Securities]
Having a Mr Tall, Dark and Handsome in the same office may be detrimental for male traders and fund managers, according to recent research published in the journal of Evolution and Human Behaviour.
That’s because when heterosexual men see another man that they perceive as more attractive than themselves, they try to compensate by increasing their wealth – by making high-risk, high-return decisions.
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Not only that, men are willing to take even more of a financial risk if they feel the good-looking rival makes more money than them. Talk about a pissing contest.
Dr Eugene Chan, a consumer psychologist from the University of Technology, Sydney, came to this conclusion after running a series of four behavioural experiments involving 820 men and women, to determine the psychological effects of comparing oneself against other members of the same sex.
In one of the experiments, participants were shown either a picture of an attractive model (from Abercrombie & Fitch or Victoria’s Secret ads), or photographs of regular average-looking people. They were then offered the choice of getting $100 straightaway, or taking a bet where they had a 90% chance of getting nothing and a 10% chance of getting $1,000.
[Photo Credit: Luxury and Lifestyle blog]
The result? Men who saw the male models were more likely to choose the riskier bet than men who were shown female models or mere mortals. This risky behaviour was more pronounced in men who had rated the models as “more attractive” than themselves, suggesting that the risk-taking was an attempt to compensate for perceived inferiority.
For the women, however, there were no changes in risk-taking regardless of the photo seen.
Across the experiments, men who saw the male models took greater financial risks than those who did not 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.
Dr Chan noted, “In evolutionary history, men have faced greater intrasexual competition in attracting women as a mating partner. Thus, when the [average Joe] sees an attractive male, he is motivated to increase his desirability, prompting him to accrue money and taking greater financial risks.”
The problem with taking greater financial risks is that they don’t necessarily translate to higher returns. In fact, just like how too much testosterone can lead to impulsive decisions, too much risk-taking in the stock market can likely turn a trader’s profits into losses.
So what’s the conclusion to be drawn from this study, especially for those working in the finance industry? After all, it’s not realistic to avoid good-looking colleagues just because you’re afraid of being influenced in your work. Biology may be powerful, but it can’t be powerful enough to override rationality and years of learned experience, right?
In a manner of speaking, yes. The study seems a little simplistic and is too quick to draw a causal link between good looks and financial risk-taking. But as primitive as its results may sound, the study does go a long way in highlighting just how much stock we place on the importance of appearance – and how unhealthy this can be.
There’s no denying we are a culture obsessed with image. Economists have long recognised the concept of a beauty premium – the idea that good-looking people, regardless of their actual competency in a job, are perceived to be more productive and are therefore paid more. (In the US, for example, workers with above average looks are paid 5% more on average than their less attractive counterparts, while plain-looking workers suffered a salary penalty of up to 9%.)
At the root of it all is a deeper cognitive bias that many of us have. We instinctively pass judgment based on appearance alone. Psychology has a term for it: the “halo effect”, in which our overall impression of a person (“he is handsome”) impacts our evaluation of that person’s traits (“he is also well-off”). Think about it: don’t we often perceive good-looking people (like celebrities) as more intelligent, more popular, and more successful, even though we might not know them personally?
Such assumptions are not always valid and can lead to an unhealthy spirit of competition. Constantly obsessing over others’ supposed superiority and struggling to keep up with the Joneses is not just a pointless activity; it’s also a dangerous addiction. In the long run, it may even take a toll on your mental health and send you on a self-reinforcing spiral down the black hole of depression.
A lifetime of unhappiness is too high a price to pay for a picture-perfect façade.
So, just as you shouldn’t judge a book by its cover, don’t judge a person by his/her looks. It’s what’s inside that counts.