Investor Vulnerability – “…individuals with lower chronic cortisol displayed stronger loss aversion, a disadvantageous form of punishment sensitivity that diminishes individuals’ long-term payoffs “
Conversely, individuals with higher endogenous cortisol weighted losses and gains more equally (i.e., they were less loss averse)….
The hormonal response to stressors and punishment is governed by the evolutionarily prespecified HPA cascade, which is widely conserved in many animal species…
Cortisol crosses the blood-brain barrier, where it has neuro-modulatory actions. Neuro-modulatory actions include phasic and long-term changes to gluco-corticoid receptors in limbic and prefrontal regions. Behavioral actions include altered punishment- and reward-related behavior, effects that depend on the time course of exposure (i.e., acute vs. chronic)…acute, exogenous glucocorticoids decrease punishment sensitivity on a gambling task in humans: 40 mg of oral hydrocortisone increased risk seeking when subjects were faced with probable losses.
Acute beta-adrenergic antagonists, which increase human gambling in the face of large probable losses also acutely increase cortisol levels.
Our results encourage the speculation that, within the healthy population, long-term exposure to glucocorticoids may indeed be adaptive, reducing oversensitivity to potential losses. Further work should examine whether this hormone-behavior relationship reflects some pre-specified coordination between psychological and biological responses to punishment.