MAOA Gene Variants Associated With Longshot Risk-taking

Neurochemistry and economic theory move more closely together thanks to this paper and the cadre of research it acknowledges. The authors set out to address a problem that appears to have long perplexed economic theorists, which is why and how the same actor or person indulges in longshot risk-taking (backing a rank outsider like a horse at very long odds, or buying a lottery ticket) with risk-averse behaviour like the purchase of insurance. "Why do people concurrently buy lottery and insurance?" the authors ask, "valuing longshot bets with higher odds more than favourites with lower odds when, overall, payoffs are similar....(whereas) insurance customers are risk averse in paying more than the expected loss to shift their liability for loss to the insurance company".

The authors refer specifically to research I deal with in NOT A CHIMP, by Mayer-Lindenberg, who showed that low-expression variants of the MAOA gene predicted the fear-centres of the brain, the amydalae, would be hyper-responsive to stimuli, and less regulated by the pre-frontal regions of the brain, leading to hyper-vigilance and anxiety in the individual concerned. Based on this, they hypothesized that individuals with the high-activity variant of MAOA would show a preference for longshot and be less disposed to purchasing insurance. This is what they found. They conclude: "With more empirical validation of our neurogenetic results suggesting that individual differences in preference over longshot risks are partially hard-wired traits, the stage is set for testing their implication in institutional and market settings."