Abstract
Risk taking under stress: the role(s) of self-selection. A comment on Buckert et al. (2014).
Highlights
In terms of the first contribution, the study by Buckert et al (2014) identifies a link between stress, cortisol levels, and risk attitude, supporting the view that hormone levels are an important moderator of risk taking and questioning the concept of stable risk preferences
While these insights are of broad interest, they should be taken with care. The interpretation of both contributions is potentially affected by selection problems that did not receive much attention in the study by Buckert et al Regarding the physiological foundations of risk taking, Buckert et al find that stress induction increases risk seeking, but only for those for whom the stress induction affected cortisol levels
Individuals’ demographics, personality traits, and self-regulatory strategies have been shown to mediate responses to stress (Hagger, 2009); these same factors have been associated with individual differences in risk attitudes (e.g., Borghans et al, 2008, on personality and demographics; Bryant and Dunford, 2008, on regulatory focus)
Summary
Observing behavior under extreme conditions (i) provides insights into decision making processes; and (ii) improves the external validity of predictions for behavior outside the lab, if the extreme condition is similar to a typical decision situation “in the field.” In terms of the first contribution, the study by Buckert et al (2014) identifies a link between stress, cortisol levels, and risk attitude, supporting the view that hormone levels are an important moderator of risk taking and questioning the concept of stable risk preferences. Policy and regulation need to take account of insights regarding the link between stress and risk taking to appropriately predict and regulate behavior in these professions.
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