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Genetic Determinants of Financial Risk Taking

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  • Camelia M Kuhnen
  • Joan Y Chiao

Abstract

Individuals vary in their willingness to take financial risks. Here we show that variants of two genes that regulate dopamine and serotonin neurotransmission and have been previously linked to emotional behavior, anxiety and addiction (5-HTTLPR and DRD4) are significant determinants of risk taking in investment decisions. We find that the 5-HTTLPR s/s allele carriers take 28% less risk than those carrying the s/l or l/l alleles of the gene. DRD4 7-repeat allele carriers take 25% more risk than individuals without the 7-repeat allele. These findings contribute to the emerging literature on the genetic determinants of economic behavior.

Suggested Citation

  • Camelia M Kuhnen & Joan Y Chiao, 2009. "Genetic Determinants of Financial Risk Taking," PLOS ONE, Public Library of Science, vol. 4(2), pages 1-4, February.
    • Handle: RePEc:plo:pone00:0004362
    DOI: 10.1371/journal.pone.0004362
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    References listed on IDEAS

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    1. Camelia Kuhnen & Brian Knutson, 2005. "The Neural Basis of Financial Risk Taking," Experimental 0509001, University Library of Munich, Germany.
    2. David Cesarini & Christopher T. Dawes & Magnus Johannesson & Paul Lichtenstein & Björn Wallace, 2009. "Genetic Variation in Preferences for Giving and Risk Taking," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(2), pages 809-842.
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    More about this item

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • D87 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Neuroeconomics
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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