Dataset Information

State-dependent risk-taking.

ABSTRACT: Who takes risks, and when? The relative state model proposes two non-independent selection pressures governing risk-taking: need-based and ability-based. The need-based account suggests that actors take risks when they cannot reach target states with low-risk options (consistent with risk-sensitivity theory). The ability-based account suggests that actors engage in risk-taking when they possess traits or abilities that increase the expected value of risk-taking (by increasing the probability of success, enhancing payoffs for success or buffering against failure). Adaptive risk-taking involves integrating both considerations. Risk-takers compute the expected value of risk-taking based on their state-the interaction of embodied capital relative to one's situation, to the same individual in other circumstances or to other individuals. We provide mathematical support for this dual pathway model, and show that it can predict who will take the most risks and when (e.g. when risk-taking will be performed by those in good, poor, intermediate or extreme state only). Results confirm and elaborate on the initial verbal model of state-dependent risk-taking: selection favours agents who calibrate risk-taking based on implicit computations of condition and/or competitive (dis)advantage, which in turn drives patterned individual differences in risk-taking behaviour.

SUBMITTER: Barclay P

PROVIDER: S-EPMC6030535 | biostudies-literature | 2018 Jun

REPOSITORIES: biostudies-literature

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State-dependent risk-taking.

Barclay Pat P Mishra Sandeep S Sparks Adam Maxwell AM

Proceedings. Biological sciences 20180601 1881

Who takes risks, and when? The <i>relative state model</i> proposes two non-independent selection pressures governing risk-taking: need-based and ability-based. The need-based account suggests that actors take risks when they cannot reach target states with low-risk options (consistent with risk-sensitivity theory). The ability-based account suggests that actors engage in risk-taking when they possess traits or abilities that increase the expected value of risk-taking (by increasing the probabil ...[more]

PMID: 29925612

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Project description:The research aimed to further develop knowledge on the mechanisms that enhance risk-taking propensities among powerful people. Three studies (N1 = 328, N2 = 388, N3 = 267) investigated the role of optimism in the relationship between sense of power and financial risk-taking, controlling for the state of power. Study 1, correlational, analyzed whether the relationship between sense of power and risky financial choices is serially mediated by general optimism and financial risk perception. The results confirmed the initial hypotheses. The second, experimental, study investigated the role of states of power and lack of power in explaining people’s financial decisions as well as their influence on people’s situational optimism and perception of risk. The results indicated that people in a state of power differed from people lacking power in terms of their situational optimism and the riskiness of their financial choices; however, they did not differ in terms of risk perception. People having power were more optimistic, invested more, and made riskier gambling choices than those in control conditions and those who lacked power. The third, experimental, study investigated the single and joint moderating effects of the states of optimism and power in explaining the positive relationship between sense of power and risky investing and gambling choices. In line with our expectations, the results of the study showed that the states of power and optimism jointly moderated the positive relationship between the sense of power and risky financial choices. This effect was the strongest under the state of power and optimism conditions and the weakest when lack of power and pessimism were induced; thus boundary conditions for previously observed mechanisms were identified. The results of the research shed light on the way optimism mediates and moderates the effect of power on financial risk-taking and thus contributes to theoretical knowledge of the consequences of power.

Dataset Information

State-dependent risk-taking.

Publications

State-dependent risk-taking.

Similar Datasets

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