The behavioral genetics of behavioral anomalies

David Cesarini, Magnus Johannesson, Patrik K.E. Magnusson, Björn Wallace

    Research output: Contribution to journalArticlepeer-review


    Anumber of recent papers have examined the environmental and genetic sources of individual differences in economic and financial decision making. Here we contribute to this burgeoning literature by extending it to a number of key behavioral anomalies that are thought to be of importance for consumption, savings, and portfolio selection decisions. Using survey-based evidence from more than 11,000 Swedish twins, we demonstrate that a number of anomalies such as, for instance, the conjunction fallacy, default bias, and loss aversion are moderately heritable. In contrast, our estimates imply that variation in common environment explains only a small share of individual differences. We also report suggestive evidence in favor of a shared genetic architecture between cognitive reflection and a subset of the studied anomalies. These results offer some support for the proposition that the heritable variation in behavioral anomalies is partly mediated by genetic variance in cognitive ability. Taken together with previous findings, our results underline the importance of genetic differences as a source of heterogeneity in economic and financial decision making.

    Original languageEnglish (US)
    Pages (from-to)21-24
    Number of pages4
    JournalManagement Science
    Issue number1
    StatePublished - Jan 2012


    • Behavior genetics
    • Behavioral anomalies
    • Heuristics and biases

    ASJC Scopus subject areas

    • Strategy and Management
    • Management Science and Operations Research


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