Over the weekend, a study was published in Scientific Reports (part of the Nature Group) that links cortisol and testosterone with financial risk-taking. The authors believe that these neuro-hormones in men may contribute to the destabilization of financial markets https://vaigeneric.com/generic-cialis/. The implications in mediation and legal negotiation are likewise important. Testosterone, risky decision-making, and mediation advocacy may be linked to explain lawyer or client behaviors.
The study measured salivary levels of cortisol, released under stress, and testosterone in young men playing a financial trading game. The researchers then raised both cortisol and testosterone levels artificially and observed behaviors in the game. Their conclusion is sobering:
We found that both cortisol and testosterone shifted investment towards riskier assets. Cortisol appears to affect risk preferences directly, whereas testosterone operates by inducing increased optimism about future price changes. Our results suggest that changes in both cortisol and testosterone could play a destabilizing role in financial markets through increased risk taking behaviour, acting via different behavioural pathways.
What does this mean for young male lawyers or aggressive young men as parties who are engaged in legal negotiation where high risk decisions are being made?
First, the more stressful the mediation environment, the more likely cortisol will be elevated. This may lead to unwanted risky decision-making.
Second, if these lawyers or their clients become too competitive in the mediation, testosterone levels will rise. This will create a false sense of control and optimism, leading to risky decisions.
Generally, the risky decision will be to decline a reasonable settlement offer, refusal to make a reasonable concession, and the creation of a belief of infallibility at trial. None of these behaviors may be factually or legally based. Instead, they are emotional reactions to changes in neuro-hormone levels in the brain.
What should be done? As those of you who follow my work know, I strongly encourage thorough preparation before every mediation, including a complete and written concession plan. The only way you can protect against stress and an unwanted need to compete is to keep your emotions from being activated during negotiation. I say again, zealous advocacy has no place in legal negotiation. You may think you need to strut and be tough for your client. However, you are placing your brain in a position to make suboptimal decisions. You are essentially relinquishing your role as counselor and advisor to the whims of neuro-chemicals sloshing around in your brain over which you have little control.
Having said all of that, I note that the study participants were young male financial traders. The significance is that females and older, wiser males were not studied. Although I think the results might be similar if the testosterone and cortisol levels were manipulated in women and older men, I am not sure that the effect would be as strong. Certainly, there is less testosterone in women and older men naturally occurring than in young males. We might therefore see less risky decision making with women and older male negotiators. That has been my anectdotal experience in thousands of mediations. Perhaps this is one of the reasons why.
In summary, if you are a young male lawyer, keep your stress and competitive juices under control with deep preparation before each mediation. Advise your client to do the same. Otherwise, you face the possibility of your neuro-hormones hijacking good decision-making in your mediation.