January 14, 2010
MAOA Gene Influences Gambling Versus Risk Aversion

Some researchers at Hebrew U, National University of Hong Kong, and Hong Kong U have taken a look at whether a gene for breaking down neurotransmitters (e.g. serotonin, norepinephrine, epinephrine, and dopamine) influences risk taking behavior. If you like to gamble rather than buy insurance you can blame it on your monoamine oxidase A gene (MAOA) high activity allele.

Decision making often entails longshot risks involving a small chance of receiving a substantial outcome. People tend to be risk preferring (averse) when facing longshot risks involving significant gains (losses). This differentiation towards longshot risks underpins the markets for lottery as well as for insurance. Both lottery and insurance have emerged since ancient times and continue to play a useful role in the modern economy. In this study, we observe subjects' incentivized choices in a controlled laboratory setting, and investigate their association with a widely studied, promoter-region repeat functional polymorphism in monoamine oxidase A gene (MAOA). We find that subjects with the high activity (4-repeat) allele are characterized by a preference for the longshot lottery and also less insurance purchasing than subjects with the low activity (3-repeat) allele. This is the first result to link attitude towards longshot risks to a specific gene. It complements recent findings on the neurobiological basis of economic risk taking.

Regular readers will anticipate this question: When it becomes possible to select genes for offspring will people prefer genes for risk taking? Or the genes for playing it safe and buying insurance? You can imagine that the insurance industry and gambling industry will promote conflicting choices of genes for future generations. Which industry will win?

The discussion section of this paper (which is on Plos One and therefore open access) references research into other genes that influence risk taking. One can imagine that someone with enough different risk taking alleles either ruins their life gambling or they take up dangerous sports.

Several recent papers have explored the molecular genetic basis of economic risk taking. With 95 subjects, Dreber et al. [12] showed that the dopamine receptor D4 gene (DRD4) exon 3 repeats are associated with financial risk taking. This was replicated independently in a 65-subject study by Kuhnen & Chiao [13] who found additionally an association with the serotonin transporter (5-HTTLPR). Zhong et al. [15] proposed a neurochemical model relating dopamine and serotonin tones respectively to valuation sensitivity over gains and losses and derived its implication on risk attitude over risks involving moderate probabilities. They tested and validated their hypothesis with a gene association experiment showing that dopamine transporter (DAT1) is associated with risk attitude over gains and that an intronic 17 bp variable number of tandem repeat of serotonin transporter (STin2) is associated with risk attitude over losses. Roe et al. [14] showed that economic risk attitude is associated with several vesicular monoamine transporter (VMAT2) SNPs. The present paper is the first investigation of the neurogenetic correlates of attitude towards longshot risks observed through laboratory-based economic experiments. Our findings complement existing evidence about the role of MAOA in the modulation of personality traits including harm avoidance [23].

If I was going to select a genetic profile for an offspring with all the knowledge we'll have 10 years from now I'd be tempted to select the genes that make the ultimate rational trader. I figure a lot of wealthy people will do just that and the effect will be to increase inequality as genetically wealthy people out-compete others in making investment decisions.

Share |      Randall Parker, 2010 January 14 11:04 PM  Brain Genetics


Comments
Clarium said at January 15, 2010 1:27 AM:

"If I was going to select a genetic profile for an offspring with all the knowledge we'll have 10 years from now I'd be tempted to select the genes that make the ultimate rational trader. I figure a lot of wealthy people will do just that and the effect will be to increase inequality as genetically wealthy people out-compete others in making investment decisions."

Hasn't this already happened? Don't the wealthy already own most of the financial assets? Will the wealthy use it to compete against other wealthy people since most people will be afraid of financial markets now?

BTW, the actual Clarium Hedge Fund is down 25% this year. They had a lot of bearish bets on and they lost. There fundamental bets were "correct" but they couldn't fight an irrational market. But, I am going to ask is how "rational traders" can make money in an "irrational market"? Does being a rational trader work in an environment where everyone is a "rational trader" and you are the most "rational"? Does the strategy work when everyone is irrational?

The "rational trader" works best in a competitive zero-sum world.

Kralizec said at January 15, 2010 5:41 AM:

It seems predictability must make one an easier mark, while it also seems men will often yield to the unpredictable merely through fear. It even seems that a group whose members predictably aim to minimize their maximal loss as individuals can readily be crushed by a swarm of risk-takers.

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