6 Jun

The Psychology of Risk Taking: Never Play Pokies with Intense Emotions

Amy Morin, Forbes.com

Amy Morin, Forbes.com

Have you ever been angry enough to step outside your comfort zone, maybe yelling at someone you would never normally confront, like  boss or complete stranger? Have you ever been in such a good mood that you decided to spend more than you should to play pokies? Numerous studies show that our emotions have a direct impact on how we take risks, for better or worse.

Amy Morin, a contributor to Forbes online magazine who specializes in the psychology of business, wrote an interesting article on the topic of risk taking. Having studied the subject at length, she explained that our “emotions influence each decision you make in some pretty interesting ways.”

We all take risks in our daily lives, especially when it comes to our jobs. Office workers make decisions on a daily basis, often involving some level of risk. Even the way our morning starts out can greatly impact the decisions we make. Something as simple as spilling our first cup of coffee could change the way we conduct ourselves all day at work.


Bigger Risks When Angry, Embarrassed

Studies have show that emotions of anger or embarrassment can lead to bigger risk taking. These types of “intense emotions impair self-control,” making us particularly vulnerable to high-risk,” said Morin. We may be more prone to over-spending on things like lottery tickets and poker machines when we’re angry, embarrassed or in an overall bad mood.

“These high-risk situations often become self-defeating. The more you lose, the more angry and embarrassed you’re likely to feel,” she said, leading to “even more destructive risk taking.”

Excitement Isn’t Any Better

When we’re excited, we’re in a jovial mood and tend to be too carefree when it comes to risk taking. Unlike the anger-induced overspending that comes from bad moods, studies show that we tend to overestimate our odds of winning or making a profit when we’re overly excited.

For example, when we play pokies, the more excited we feel, the more we tend to pump into the machines. Because we are so happy, we feel luck is on our side and only more good things can come our way.

“Feelings of excitement will cause you to focus more on the potential reward, while underestimating the reality of the risk,” explained Morin.

Casinos new exactly what they were doing when they installed all those flashing lights and ringing bells on poker machines – to induce a sense of heightened elation in gamblers.

Sadness Provokes Low Standards

When we are sad, the brain’s natural and often unconscious reaction is to try and make us happy again. In doing so, we tend to set our standards a lot lower than we would in a positive emotional state.

In a study, researchers asked people to set prices on items they wanted to sell. Those who were sad set their prices the lowest. It was concluded that this group of subjects were setting their expectations lower in hopes of selling more items, which would in turn make them happy again.

Morin opined that, “Lowering your expectations could prevent you from reaching your greatest potential,” causing us to miss out on an opportunity for something we want, like a promotion, “because you’ll be too fearful of rejection.”

Anxiety Begets More Anxiety

Anxiety is the ultimate buzz kill, and often prevents us from taking any risk at all. When we’re sitting by the phone, waiting to hear the results of a doctor’s test, or maybe a job application, our subconscious is acutely aware that bad news may be on the way, thus we tend to shy away from anything in our lives that could have negative results.

“Even when situations are completely unrelated, studies show your anxiety influences the way you view risks in all areas of your life,” said Morin. When you’re feeling anxious, chances are you won’t go out and play pokies, buy lottery tickets or make any big business decisions.

Emotional Awareness Is Key

Life is a whirlwind of experiences, both positive and negative, thus we can’t always control our emotions. However, we can train ourselves to become more aware of them, and when we’re acutely aware of our emotional state, we will at least be able to decide whether it’s a good idea to make any decisions where risk is involved.

“Recognize how you’re feeling and consider how those emotions may distort your thinking and influence your behavior,” suggests Morin. “Keep in mind, it’s not just your current emotions you need to consider. Your anticipation of how you’ll feel later also plays a role in the choices you make.”

The more intense your emotions are, whether positive or negative, the more you should “avoid making any major decisions. You’ll take better risks when your calm,” she concluded.