1. Leadership
  2. Women in Business
  3. Managing
  4. Strategy
  5. Personal Growth
We are here for your business - COVID-19 resources >
Product and service reviews are conducted independently by our editorial team, but we sometimes make money when you click on links. Learn more.
Lead Your Team Personal Growth

What Makes People Take Big Risks

image for High dive image via  Shutterstock High dive image via Shutterstock

Ever wonder why some people are willing to risk it all to start a new career, climb a mountain or jet off to some foreign destination for a great adventure while others are afraid to do anything out of the ordinary? The answer may lie in how many surprise endings they've faced in the past.

According to new research from psychologist Heath Demaree, of Case Western Reserve University in Cleveland, Ohio, people who've experienced surprising outcomes in various situations — whether those outcomes were good or bad — are less likely to take risks in the future. In other words, it’s not whether you win or lose, but whether the outcome is expected. People appear to decrease their risk-taking levels after experiencing any surprising outcome — even positive ones.

“Surprising events are known to cause animals to stop, freeze, orient to the surprising stimulus and update their schemas of how the world works,” Demaree said. “Our recent research suggests that surprising events also cause people to temporarily https://www.businessnewsdaily.com.”

Demaree, who studies emotions and how they affect https://www.businessnewsdaily.com, set out to further understand how a person’s current emotional state predicts risk-taking behavior. Past research has revealed that positive and negative emotional states generally decrease and increase risk-taking, respectively.

To conduct this research, he gave study participants a fictitious bankroll of $50, to use to play one or two of three types of computerized slot games 25 times each. Each computerized game produced wins at different probabilities: 13 percent (with big jackpots), 50 percent (essentially, a coin flip) and 87 percent (with very small jackpots). Although no participants gambled with real money, motivation to win was present. For every dollar in the individual’s account at the end of the 25 games, the person received one ticket toward a $50 raffle.

“Each game was set to be a ‘fair’ game,” Demaree said. “That is, if you played for a long period of time, you should break even on average.”

The researchers had 59 participants play the high-risk computerized gambling game (13 percent) and surprised the participants with some big wins. A separate group of 85 participants played both the 50 percent and 85 percent win yield. The last group, which expected to mostly win, was given some unexpected losses. After playing each game, students answered a questionnaire about emotions, moods and risk-taking. The results found that experiencing a surprising event, such as winning or losing unexpectedly, appeared to temporarily produce risk aversion.

The research has been published in the American Psychological Association journal Emotion.

Collaborators on the study were Kevin J. Burns, The MITRE Corp.; Edward Agarwala and Michael DeDonno, Case Western Reserve University; and D. Erik Everhart, East Carolina University.

Follow Jeanette Mulvey on Twitter @jeanettebnd or BusinessNewsDaily @BNDarticles. We're also on Facebook & Google+.

Jeanette Mulvey

Jeanette has been writing about business for more than 20 years. She has written about every kind of entrepreneur from hardware store owners to fashion designers. Previously she was a manager of internal communications for Home Depot. Her journalism career began in local newspapers. She has a degree in American Studies from Rutgers University. Follow her on Twitter @jeanettebnd.