Power, Expected Value, and Excessive Risk-Taking

Published: 27-07-2017| Version 1 | DOI: 10.17632/p88k6vjz32.1
Contributors:
Johnny Fulfer,
Peter Maille

Description

To investigate the influence of the sense of power on decision making under risk, we conducted an experiment with sixty participants and found evidence which suggests that a heightened sense of power results in excessive risk-taking. We primed the experimental group with a high-power mindset and the control group with a neutral mindset and asked participants to answer a series of hypothetical questions on expected value. The results of a chi-square test suggest that participants who were primed with a heightened sense of power tend to focus on high but unlikely rewards. We propose that there is a link between a heightened sense of power and suboptimal economic decision making, and model this in the prospect theory framework.

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