Is financial instability male-driven? Gender and cognitive skills in experimental asset markets

Carlos Cueva, Aldo Rustichini

Research output: Contribution to journalArticlepeer-review

41 Scopus citations


The hypothesis that price stability would reliably increase with the fraction of women operating in financial markets has been frequently suggested in policy discussions. To test this hypothesis we conducted 10 male-only, 10 female-only and 10 mixed-gender experimental asset markets, and compared the effects of gender composition, confidence, risk attitude and cognitive skills. Male and female markets have comparable volatility and deviations from fundamentals, whereas mixed-gender markets are substantially more stable. On the other hand, higher average cognitive skills of the group are associated with reduced market volatility. Individual-level analysis shows that subjects with higher cognitive skills trade at prices closer to fundamental values and earn significantly higher profits; similarly, mixed markets exhibit lower mispricing, particularly for traders with lower cognitive skills. Our results are demonstrated to hold in other experimental asset market studies, suggesting that a mixed-gender composition reduces mispricing across different types of asset markets.

Original languageEnglish (US)
Pages (from-to)330-344
Number of pages15
JournalJournal of Economic Behavior and Organization
StatePublished - Nov 1 2015

Bibliographical note

Funding Information:
We would like to thank Charles Noussair for discussions on the experimental design, Ed Roberts for assistance conducting the experiments and steering committee members of the Cambridge Experimental and Behavioural Economics Group for logistic support. For helpful comments on earlier drafts, we thank an anonymous reviewer at IVIE, the editor Ragan Petrie and three anonymous referees. Financial support from the UK Economic and Social Research Council , the Isaac Newton Trust and the Spanish Ministerio de Economía y Competitividad ( ECO2012-34928 ) are gratefully acknowledged.

Publisher Copyright:
© 2015 Elsevier B.V.


  • Asset market experiment
  • Cognitive ability
  • Gender
  • Mispricing
  • Price bubbles


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