Power, Expected Value, and Excessive Risk-Taking

Published: 27 July 2017| Version 1 | DOI: 10.17632/p88k6vjz32.1
Contributors:
Johnny Fulfer,

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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Institutions

Eastern Oregon University

Categories

Risk Taking, Behavioral Economics, Power (Leadership and Power), Prospect Theory, Chi-Square Testing, Human Experimental Psychology

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