With abandon
Chiraag Mittal & Vladas Griskevicius
Journal of Personality and Social Psychology, October 2014, Pages 621-637
Abstract:
Past research found that environmental uncertainty leads people to behave differently depending on their childhood environment. For example, economic uncertainty leads people from poor childhoods to become more impulsive while leading people from wealthy childhoods to become less impulsive. Drawing on life history theory, we examine the psychological mechanism driving such diverging responses to uncertainty. Five experiments show that uncertainty alters people's sense of control over the environment. Exposure to uncertainty led people from poorer childhoods to have a significantly lower sense of control than those from wealthier childhoods. In addition, perceptions of control statistically mediated the effect of uncertainty on impulsive behavior. These studies contribute by demonstrating that sense of control is a psychological driver of behaviors associated with fast and slow life history strategies. We discuss the implications of this for theory and future research, including that environmental uncertainty might lead people who grew up poor to quit challenging tasks sooner than people who grew up wealthy.
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Guilt Enhances the Sense of Control and Drives Risky Judgments
Maryam Kouchaki, Christopher Oveis & Francesca Gino
Journal of Experimental Psychology: General, forthcoming
Abstract:
In the present studies, we investigate the hypothesis that guilt influences risk taking by enhancing one's sense of control. Across multiple inductions of guilt, we demonstrate that experimentally induced guilt enhances optimism about risks for the self (Study 1), preferences for gambles versus guaranteed payoffs (Studies 2, 4, and 6), and the likelihood that one will engage in risk-taking behaviors (Study 5). In addition, we demonstrate that guilt enhances the sense of control over uncontrollable events, an illusory control (Studies 3, 4, and 5), and found that a model with illusory control as a mediator is consistent with the data (Studies 5 and 6). We also found that a model with feelings of guilt as a mediator but not generalized negative affect fits the data (Study 4). Finally, we examined the relative explanatory power of different appraisals and found that appraisals of illusory control best explain the influence of guilt on risk taking (Study 6). These results provide the first empirical demonstration of the influence of guilt on sense of control and risk taking, extend previous theorizing on guilt, and more generally contribute to the understanding of how specific emotions influence cognition and behavior.
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Extraverted populations have lower savings rates
Jacob Hirsh
Personality and Individual Differences, forthcoming
Abstract:
Savings rates in the U.S. have reached an historic low, posing challenges to long-term economic well-being. Among individuals, impulsive spending is associated with preferences for immediate gratification, driven by a heightened sensitivity to immediate rewards. Three studies examined whether population levels of trait Extraversion, reflecting dispositional sensitivity to rewards, are associated with aggregate savings rates. In Study 1, cross-cohort increases in U.S. Extraversion, assessed from 16,846 individuals over 28 years, were associated with declining personal savings rates. In Study 2, regional variation in Extraversion as assessed from a sample of 619,397 participants was negatively associated with state-level household saving, although only Openness remained a significant predictor when all traits were simultaneously entered into a regression model. In Study 3, higher nationally-aggregated Extraversion predicted lower gross national savings in a global sample of 17,837 individuals from 53 nations.
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Henry Saffer
NBER Working Paper, September 2014
Abstract:
The purposes of this paper are to measure self-regulation, to investigate whether self-regulation differs across different health related choices, to estimate its effect on health choices and to estimate the effect of self-regulation on health-demographic gradients. The theory and empirical approach to self-regulation employed in this paper relies on a broad literature which includes economics, psychology and experimental studies. In addition, a novel empirical approach is employed to create a single measure of self-regulation that can vary across domains. A single measure of self-regulation in place of a set of proxy variables allows for the study of how self-regulation is correlated across different health choices. The results show that there is a high correlation in self-regulation for smoking, drinking, drug use, crime and gambling, but that self-regulation for BMI (body mass index) and obesity are different than self-regulation for the other outcomes. The results show that self-regulation has a significant negative effect on all choices. The results also show that self-regulation generally reduces the effect of education on health but education retains a negative and significant relationship with all outcomes. The research presented in this paper also raises questions about the effect of omitted individual heterogeneity in measuring the effects of public policy.
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Curtis Simon, John Warner & Saul Pleeter
Economic Inquiry, forthcoming
Abstract:
The choice given military personnel between an immediate cash payment of $30,000 or a more generous retirement pension permits us to estimate individuals' personal discount rates (PDRs). The resulting PDRs, about 7% for enlisted personnel and 2%-4.3% for officers, are precise and are correlated with a variety of other financial behaviors. The PDR is negatively related to educational attainment and the Armed Forces Qualification Test, but cognition seems to operate through channels other than being better informed; better-informed individuals were not always measured to be more patient.
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Mindset induction effects on cognitive control: A neurobehavioral investigation
Hans Schroder et al.
Biological Psychology, December 2014, Pages 27-37
Abstract:
Messages about how much our abilities can change - or "mindset" messages - affect learning, achievement, and performance interpretations. However, the neurocognitive mechanisms responsible for these effects remain unexplored. To address this gap, we assessed how a mindset induction influenced cognitive control brain activity. Participants were randomly assigned to read that intelligence was either malleable (growth-mindset condition) or immutable (fixed-mindset condition) before completing a reaction-time task while electroencephalogram was recorded. Findings revealed that inducing a growth mindset resulted in enhanced attention to task-relevant stimuli, whereas inducing a fixed mindset enhanced attention to responses. Despite enhanced attention to responses in the fixed mindset group, this attention allocation was unrelated to adaptive performance adjustments. In contrast, the growth mindset induction produced a relatively strong coupling between error-related attention allocation and adaptive post-error performance. These results suggest that growth- and fixed-mindset messages have differential effects on the neural dynamics underlying cognitive control.
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Using priming manipulations to affect time preferences and risk aversion: An experimental study
Avi Israel, Mosi Rosenboim & Tal Shavit
Journal of Behavioral and Experimental Economics, December 2014, Pages 36-43
Abstract:
The objective of this paper is to test how priming manipulation affects time preference (subjective discount rates) and risk aversion. In this study, we exposed subjects to visual (pictorial) and textual priming for vacation and for old age in order to influence their time preference. The results indicate that our pictorial priming manipulations did affect time preference and subjective discount rates: vacation scenes increased present preference, and pictures of older people reduced present preference. The pictorial priming with vacation scenes also increased risk aversion. On the other hand, textual priming did not affect time preference or risk aversion.
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Neuroanatomy Predicts Individual Risk Attitudes
Sharon Gilaie-Dotan et al.
Journal of Neuroscience, 10 September 2014, Pages 12394-12401
Abstract:
Over the course of the last decade a multitude of studies have investigated the relationship between neural activations and individual human decision-making. Here we asked whether the anatomical features of individual human brains could be used to predict the fundamental preferences of human choosers. To that end, we quantified the risk attitudes of human decision-makers using standard economic tools and quantified the gray matter cortical volume in all brain areas using standard neurobiological tools. Our whole-brain analysis revealed that the gray matter volume of a region in the right posterior parietal cortex was significantly predictive of individual risk attitudes. Participants with higher gray matter volume in this region exhibited less risk aversion. To test the robustness of this finding we examined a second group of participants and used econometric tools to test the ex ante hypothesis that gray matter volume in this area predicts individual risk attitudes. Our finding was confirmed in this second group. Our results, while being silent about causal relationships, identify what might be considered the first stable biomarker for financial risk-attitude. If these results, gathered in a population of midlife northeast American adults, hold in the general population, they will provide constraints on the possible neural mechanisms underlying risk attitudes. The results will also provide a simple measurement of risk attitudes that could be easily extracted from abundance of existing medical brain scans, and could potentially provide a characteristic distribution of these attitudes for policy makers.
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The Role of Hope in Financial Risk Seeking
Martin Reimann et al.
Journal of Experimental Psychology: Applied, forthcoming
Abstract:
One construct validation study and four experiments showed that the relationship between hope and financial risk seeking depended on whether or not the possibility of a hoped-for outcome was threatened. Whereas high (vs. low) hope decreased financial risk seeking when the possibility of a hoped-for outcome was not threatened, high (vs. low) hope increased financial risk seeking when the outcome's possibility was threatened. These effects were observed in different contexts (i.e., gambling, stock investing, bidding, retirement investing), when applying different operationalizations of hope and threats to possibility, and when controlling for alternative explanations. We also showed that individuals' motivations to either achieve gains or avoid losses mediated the effects of hope on financial risk seeking. This research, which is the first to study the role of hope in financial decision making, adds to the extant literature by underscoring the psychological impact of threats to the possibility of attaining a hoped-for financial outcome.