How Power Affects Decision Making
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It turns out powerful people really do think differently. New research shows that people in positions of high power and others in positions of low power take very different courses of action when presented with the same scenario.
Researchers found this out through a series of experiments that examined how people would respond to a hypothetical offer of $120 now or the ability to wait and gain more money in one year. Overall, most people will forgo the larger reward and simply take the $120 when it is offered, in what the researchers call temporal discounting.
However, after study participants were split into groups where they were randomly assigned different levels of power, new trends emerged. It was found that participants who were assigned to a low-power role such as a member of a team were willing to take the reward only if it was $88 higher than the immediate offer ($120) on the table. On the other hand, participants in a high-power role such as a manager were more likely to take an offer if it was $52 higher than the immediate offer.
Researchers Priyanka Joshi and Nathanael Fast of the University of Southern California say people in positions of power were willing to wait for the bigger reward because they feel more connected to the future version of themselves. Joshi and Fast say this is because people in positions of power are more likely to have uncertainty about their futures and the ability to see the big picture. People in power are therefore more likely to save money and be responsible with their finances.
"It is important to foster awareness of all of power's effects otherwise, the power holder may make overly risky — albeit well-intentioned — decisions on behalf of their future self," said Joshi and Fast of the University Of Southern California's Marshall School Of Business.
The research was published in Psychological Science, a journal of the Association of Psychological Science.