When the Going Gets Tough

Abstract

We examined the impact of anticipating poor economic conditions on financial risk taking. In Experiment 1, the salience of poor future economic prospects was manipulated among young adults. Those who were reminded of their poor future economic prospects were more likely to take the opportunity to gamble with their money than those in the control condition. In Experiment 2, we once again manipulated the salience of poor economic prospects. Extending the results of Experiment 1, participants who were reminded of their poor economic prospects bet more money on a spin of a roulette wheel than those in a control condition. Importantly, we show that the relationship between poor economic prospects and gambling is mediated by belief in the necessity of taking financial risks to make money. Implications of economic downturns for gambling and other forms of risk taking are discussed.