The relationship between social cognition, sex steroids, and economic decision-making

Decision-making involves the selection of one from several distinct options with distinct outcomes. Although previous research on economic decision-making under risk probed social, psychological, and biological influences, including endocrine factors such as gonadal and adrenal steroids, the intersection between these factors on economic decision-making is not well understood. As these hormone classes are functionally related to many aspects of social cognition, this dissertation describes three studies designed to explore the reciprocal relationship between steroid hormones (testosterone, estradiol, and cortisol), social cognition, and economic decision making. The first study tests whether baseline levels of steroid hormones have a differential effect on equivalent risky decisions in a simple gambling task when they are framed as either social or non-social, and whether such framing differences likewise cause changes in steroid hormone levels. The results show that female estradiol and male testosterone decrease in the non-social but not social framing of the same task, and that cortisol moderates some of this difference. The second study tests whether baseline levels of steroid hormones have a differential effect on decision-making after social facilitation versus provocation, and whether social facilitation versus provocation have differential effects on steroid hormone levels and decision-making in the Ellsberg Urns task. This task can characterize individual preferences for risk (where outcome probabilities are known) and ambiguity (where outcome probabilities are unknown), called the ambiguity premium. The results show that increases in female estradiol predict increases the ambiguity premium, but only after social facilitation. The third study tests whether baseline levels of steroid hormones have a differential effect on decision-making to fair versus unfair offers in the Ultimatum Game, and whether these differences in offers likewise cause changes in steroid hormone levels. The results show that female testosterone decreased in response to fair offers, female estradiol increased in response to unfair offers, and that distinct hormone level profiles predicted acceptance rates to unfair offers. Overall, these studies demonstrate that, in a sex-specific manner, social context affects how gonadal steroids differentially influence decision-making under risk and ambiguity. While testosterone is typically associated with risk-seeking in males, here female estradiol is more associated with risk-aversion.