Tend and Befriend – Why Women Should Run Wall Street

By November 4, 2009Business

I have just attended a most interesting consultation on ethical finance at St George’s House Windsor, co-run with Ridley Hall in Cambridge. One topic that came up in our discussions was about information. There was a feeling that the money to made from information asymmetries, coupled with concern over anti-competitive behaviour, made financial services as a sector reluctant to co-operate. This was seen to be a stumbling block to any co-operative attempt to agree self-regulatory regimes that would obviate the need for more potentially draconian regulatory intervention. This got me to musing – again – about Nash equilibria.

It also reminded me of an article I read many years ago in – of all places – Marie Claire magazine. It concerned gendered responses to stress. The article was based on a 2000 study by Taylor et al revisiting research on the fight or flight response to stress. They noticed that the ‘fight or flight’ theory was based on research that had used primarily male subjects. When female subjects were used, a contrasting theory emerged, dubbed ‘tend and befriend,’ likely linked to the action of oxytocin in the female body. Broadly, this new theory suggests that while the cavemen were out fighting the sabre-tooth tiger, the women were gathering the children around them and telling them stories to keep them calm. It suggests that an instinctive female response to stress may be to reach out to others rather than to retreat or become hostile. Nash might say that the caricatured female response to a bad day of phoning a friend for a gossip is actually a sophisticated information-sharing mechanism, and is therefore likely to lead to better outcomes than is a more buttoned-up and defensive response. Pace the danger of cartels, perhaps if there were more women in the Boardroom our companies would be better at handling stressful situations?

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