Risky-Business

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Elliot A. Ludvig Christopher R. Madan and Marcia L. Spetch “Priming Memories of Past Wins Induces Risk Seeking” Journal of Experimental Psychology: General 2014

Have you ever watched a game show that involved taking a risk? One where contestants are required to choose between two prizes: a small guaranteed prize or a 50/50 shot at a large prize? Have you ever witnessed a contestant risk it all for the grander prize, only to lose it all? Most of us would say that there is no way that they would make the same mistake, that they would take the safe road, but have you ever wondered what factors may have led to their decision? What might surprise you is the effect that internal and external cues have on the risk-taking decisions we make.

Research shows that people were more likely to make a risky decision when in a risky situation if they recall a time in which a risk led to a positive experience. In the study conducted by Elliot A. Ludvig, published in the Journal of Experimental Psychology 2014, participants performed a “risk-choice task” which entailed four doors paired with a point value and fruit cue. The first three doors were paired with a direct point value (0, 40, 80) whereas the fourth door contained a 50/50 risk-reward of either 20 or 60 points. In order to make the experiment more realistic, participants were incentivized with $1.25 for every 20 points accumulated. The risk-choice task was simple; participants would choose between two doors displayed on the computer in an attempt to get as many points as they could. What wasn’t revealed to the participants was that there would be a priming period, systematically between trials, where one of the fruits would be flashed upon the screen. The goal of this was to prime the participant with a fruit that either incited a positive risk-taking experience or a negative one through their association with the door’s point value. Results showed that when participants weren’t primed they sought the riskier option 41.1 +/- 5.7% of the time, whereas those who were primed with a positive cue were 15.7 +/- 4.8% more likely to choose the riskier option. What was striking on the other end was that the one would assume that then a negative cue would lead to a decrease in risk seeking as opposed to no cue, but actually no difference was observed. What this implies is that, surprisingly, most people take the risk due to expectation of losing and, think to themselves “Might as well”.

At this point you must be thinking, how can a cue lead someone to make a risky decision? Upon close examination of brain structures responsible for memory conservation and emotion, such as the hippocampus and amygdala, we see the immense interconnectivity between them. And it makes sense; it’s nearly impossible not to associate a memory with an emotion! What this makes apparent is the effect that everyday situation have on our decision-making. It even makes you wonder how greedy businesses use cues as a means of making a profit.
Acknowledgments: Lu Imbriano

Bibliography/References

  1. Ludvig, E. A., Madan, C. R., & Spetch, M. L. (2015). “Priming Memories of Past Wins Induces Risk Seeking”.Journal of Experimental Psychology. General, 144(1), 24-29. doi:10.1037/xge0000046

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