Financial traders share traits with psychopaths, research finds

Can economies afford psychopathic traders?

There is a significant and growing body of evidence, both anecdotal and scientific, that financial traders are not wired like the rest of us. Some recent research suggests that traders have more in common with psychopaths than ordinary people.

But the academic community and media have still to tackle the implications of the work: are potential and actual psychopaths attracted to work in financial markets? Or is the impetus the other way round, with market practices encouraging psychopathic tendencies? Equally important, what are the implications for the economy and society?

Two experienced researchers working on an executive MBA thesis at a Swiss university discovered that share traders were both more reckless and more manipulative than psychopaths. The two, a forensic expert and a forensic psychiatrist who is a lead administrator at a Swiss prison, devised computer simulations and intelligence tests to measure the egotism of 28 professional traders and to check their willingness to co-operate with others.

Thomas Noll, the prison administrator, told Germany's Der Spiegel that the traders "behaved more egotistically and were more willing to take risks than a group of psychopaths who took the same test".

What surprised the researchers was the competitive attitude of the financial traders, which had a destructive edge. Instead of being businesslike and aiming to reach the highest profit, explained Noll, "It was most important to the traders to get more than their opponents, and they spent a lot of energy trying to damage their opponents."

This came out when the participants played a prisoner's dilemma game, where the players can co-operate or betray each other. The bottom line was that the traders' performance was harmed and their results were no better than those of a control group.