Men's financial decisions affected by emotional news

Emotional news stories have a strong impact on men’s financial decisions, according to new UK research.

The study revealed that men are far more likely than women to let emotions from one situation carry over into unrelated risky decisions.

After watching real-life negative news stories, men avoided financial risks even when the decisions were completely unrelated to the news. However, the opposite was true for women, whose decisions were unaffected.

What the researchers say: “These results challenge the long-held stereotype that women are more emotional, and opens new avenues for understanding how emotions influence decision making across genders,” the lead researcher said.

In the study, 186 people watched emotional news stories and were then asked to make risky financial decisions with real money. Interestingly, women’s financial decisions remained unaffected by the emotional tone of the news, while men showed a clear tendency to play it safe.

The researchers claim that the findings from this study could shape advice for high-stakes financial decisions.

“We don’t make choices in a vacuum, and a cooling-off period might be crucial after encountering emotionally charged situations, especially for life changing financial commitments like buying a home or large investments,” they suggested.

The research team now wants to investigate why only men are affected by these carryover effects.

“Previous research has shown that emotional intelligence helps people manage their emotions more effectively. Since women generally score higher on emotional intelligence tests, this could explain the big differences we see between men and women,” the lead researcher explained.

My take: As this is a comparatively small study, it would be interesting to see any larger scale repeat of the experiments.

However, assuming that the results from this study are accurate, there is an interesting and, possibly, more important point to be made here.

Previous research (noted in past editions of TR) has shown that women make more successful leaders overall than men, because they are better able to use what is called a “transformational” leadership approach. Leaders who use this style of management are more interested in the people they lead than the goals they are tasked to meet. Paradoxically, this kind of leadership is in fact some 62% more effective in meeting goals than a more transactional, goal-centered one.

It may be that women’s ability to not have their judgement swayed by unrelated issues, even if they’re negative, allows them to concentrate on the betterment and advancement of the “tribe” they lead, which in turn results in increased unity and collaboration within the organization and profitability of the business.