Study: Do men spend money more easily than women?

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Do men have a more “positive” view of financial opportunities? That’s what a new study has now investigated!
A new University of California study shows that men are more likely to make riskier financial decisions than women. Even with incomplete information, men appear more optimistic about interpreting a potential economic opportunity and investing more.

How much risk we’re willing to take also depends on the situation. So what about our decisions when we’re not 100 percent sure how much money we could get or lose?

Men interpret financial opportunities more positively.
“The uncertainty we face in everyday life rarely involves such precise odds – usually people have to make a decision with partial or incomplete information,” study author Uma Karmarkar said in a press release. “This research shows that men and women react very similarly when making uncertain financial decisions with little information. However, it also shows a key difference: when information is added, men tend to interpret it positively, which in turn leads them to increase the amount of money they are willing to invest.”

For the study, nearly 500 subjects were surveyed about their finances. During the investigation, two experiments were carried out, among others, which focused on investment decisions. In one experiment, participants were asked to imagine how they would spend their money on certain investments.

In one experiment, subjects had to decide how many lottery tickets they would buy for ten U.S. dollars (approximately new euros) to use in a game with a 50-50 chance of winning. The participants were given a bag of 100 red and blue poker chips, from which they had to pick a chip blindly. If they chose a red chip, they won $20 (about 18.50 euros), but if the chip they picked was blue, they won nothing and lost the ticket price they had paid.

The study participants had no idea how many poker chips were in the bag and were given little information about the colours of some of the other chips. So each subject had to decide whether to bet ten U.S. dollars or nothing.

“The information we added was kept intentionally ambiguous,” Karmarkar explained. “For example, we told them there were at least 17 red chips and at least 20 blue chips in the bag, so the information about the remaining chips was still missing and participants had to ‘bet’ on the likelihood that a red chip would be pulled out of the bag.”

Both men and women hesitated to participate in a game at the experiment, where they had little information about how their odds would turn out. However, the researchers found that the more information men received about the game, the more willing they were to pay for it compared to women. It didn’t matter whether they were “good or bad.” The more information they received, the greater the difference in risk-taking behaviour.

“Lack of information clearly bothers women more than men in this experiment,” the study leader explained. “So this study suggests that men are more easily persuaded to spend money, but this depends largely on the availability of relevant information about the situation.”

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