The study by Sauder Finance Professors Maurice Levi and Kai Li, and PhD student Feng Zhang, titled “Deal or No Deal: Hormones and the Mergers and Acquisitions Game,” shows that testosterone – a hormone associated with male dominance-seeking in competitive situations – can be a negative factor in high-stakes decision-making.

“We find a strong association between male CEOs being young and their withdrawal rate of initiated mergers and acquisition,” says Prof. Levi, whose research relies on the established correlation between relative youth and increased levels of testosterone.

“For instance, young CEOs, who have higher levels of testosterone, tend to reject offers even when this is against their interest.”

The study shows that younger CEOs operating with more testosterone in their systems are 20 per cent more likely to withdraw a merger or acquisition bid than their older counterparts. Young CEOs are also four per cent more likely to flex their managerial muscles and attempt to acquire other companies.

As well, when companies run by young male CEOs are targeted for mergers or acquisitions, there is a two-per-cent greater chance the CEOs will resist, pushing the bidder to pursue a hostile takeover that bypasses company leadership.

The researchers analyzed 350 merger and acquisition bids in the United States between 1997 and 2007, using a securities database from Thomson SDC.

The Sauder study builds on a 2007 experiment by Harvard University Economics Prof. Terence Burnham, which examined the role of testosterone in the “ultimatum game,” a negotiation between two people where participants often reject offers of free money, defying standard economic rationality.

In the two-player game, subjects had to agree on how to divide 40 dollars or risk losing it all. Participants who begin with the entire sum of money could offer only five dollars or 25 dollars to their competitor.

Burnham found that, among those considering the offers, participants with higher levels of testosterone were more likely to reject what they perceived as low offers, ending up with nothing as a result.

A podcast interview with Prof. Levi on the results of “Deal or No Deal: Hormones and the Mergers and Acquisitions Game” can be found on the INFORMS website at www.scienceofbetter.org/podcast.

- 30 –

About the Sauder School of Business
The Sauder School of Business is Canada’s leading academic business school, recognized globally for its contributions to the transformation of business practices through innovative research and teaching. The school has more than 31,000 alumni in 74 countries around the world

“We’re very worried,” says Assoc. Prof. Amanda Vincent, director of Project Seahorse at the University of British Columbia and a leading expert on seahorse conservation  “All of the seahorse populations in the area will be affected, but the dwarf seahorse is at greatest risk of extinction because much of its habitat has been devastated by the spill.”

Dwarf seahorses are tiny (less than 2.5 cm long), sedentary animals that feed and reproduce in shallow coastal seagrass beds for much of the year. Unusually, it is the males who give birth; they produce very few young, making the species particularly vulnerable to environmental change. The spill has exposed them to high levels of oil toxins and destroyed large swaths of their food-rich habitat. Their numbers are expected to drop, even as the cleanup gains momentum.

“While the spill itself was catastrophic for these animals and ecosystems, the cleanup poses considerable threats, too,” says Assoc. Prof. Heather Masonjones, a seahorse biologist at the University of Tampa. “The dispersants used to break up the oil cause some of the toxins to sink and spread, accumulating in their food sources and poisoning more animals.”

To slow the movement of the spill, BP has burned off the oil caught in seagrass mats floating in open water. While the majority of the animals live in seagrass beds in the coastal shallows of the Gulf, others live in these loose mats of vegetation offshore.

The burning of the mats has killed many marine animals while depriving others of their habitat and exposing them to further toxicity. Seagrass is vital to the long-term health of coastal ecosystems, sheltering marine animals, acting as fish nurseries, improving water quality, and preventing erosion.

Where possible, the use of chemical dispersants and the burning of oil should be avoided, urge the researchers. Booms have been, and should continue to be, used to isolate the slicks. They can then be skimmed, left to evaporate, or treated with biological agents such as fertilizers. These organic agents promote the growth of micro-organisms that biodegrade oil. In extreme cases where animals are at high risk of poisoning, seagrass mats and beds can be cut to reduce toxic exposure.

“It’s absolutely critical that measures be taken to preserve the seagrass mats and beds,” says Masonjones. “We must act quickly and carefully to give these fragile species the best chance of survival.”

The Gulf of Mexico spill — and the explosion last Thursday of the Mariner Energy platform — raise questions about the safety of oil extraction and transport closer to home, in British Columbia’s coastal waters.

“An oil spill in B.C. would present a grave threat to several species of pipefish, close relatives of the seahorse, and to plenty of other marine life,” says Vincent. “Because of the coastal topography and wind patterns, clean up could be extremely difficult, and here, too, we could see a number of species catastrophically affected.”

For more information, or images, contact Project Seahorse at t.stiem@projectseahorse.org or 604-827-5142.

—30—

About Project Seahorse

Collaborating with stakeholders and partners around the world, Project Seahorse is an interdisciplinary organization committed to conservation and sustainable use of the world’s coastal marine ecosystems. Based out of the University of British Columbia and the Zoological Society of London, Project Seahorse engages in connected research and management at scales ranging from community initiatives to international accords. Seahorses are our focus for finding marine conservation solutions. Project Seahorse benefits greatly from partnerships in marine conservation with Guylian Belgian Chocolates and the John G. Shedd Aquarium, Chicago.

Amanda Vincent

Assoc. Prof. Amanda Vincent holds the Canada Research Chair in Marine Conservation at the University of British Columbia’s Fisheries Centre, Canada. She has a PhD in marine biology from the University of Cambridge and was Darwin Senior Research Fellow at the University of Oxford from 1994 to 1996. She is considered the leading authority on seahorse biology and conservation, and in 2000 was named a Pew Fellow in Marine Conservation. She also serves as lead scientific advisor and chair of the seahorse working group for CITES.

Heather Masonjones

An associate professor of biology and department chair at the University of Tampa, Heather Masonjones is a marine biologist specializing in behavioral ecology and reproductive physiology of seahorses and related fish species. Her research focuses on the evolution and diversification of male parental care in fishes, sexual selection and reproductive behavior of fish, and the ecology and distribution of syngnathid fishes (seahorses and pipefishes) in Tampa Bay, the Florida Keys, and the Bahamas.