Power, Expected Value, and Excessive Risk-Taking

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.