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The effect of positive feelings on risk taking: When the chips are down
ORGANIZATIONAL BEHAVIOR AND HUMAN PERFORMANCE 31, 194--202 (1983)
The Effect of Positive Feelings on Risk Taking: When the Chips Are Down ALICE M.
[SEN AND ROBERT PATRICK
University of Maryland T w o studies c o n d u c t e d simultaneously investigated the influence o f positive affect on risk taking. Results of the study, which employed an actual m e a s u r e of subjects' willingness to bet s o m e t h i n g of value, supported the prediction of an interaction b e t w e e n level of risk and positive affect: subjects w h o had reason to be feeling elated bet m o r e than control subjects on a low-risk bet, but wagered less t h a n controls on a high-risk bet. At the s a m e time, in contrast, a study involving hypothetical risk-taking s h o w e d that in general subjects were m o r e willing to take the chance as probability of s u c c e s s went up; but that elated subjects were more daring than controls on a " l o n g s h o t . " Differences in hypothetical vs real risk taking were noted, and the complexity (the interaction) of the influence o f positive feelings on real risk taking was e m p h a s i z e d . T h e results were related to other r e s e a r c h suggesting an influence of feeling states on cognitive p r o c e s s e s and decision making.
Recent studies investigating the influence of affect on risk taking suggest that positive affect may increase the tendency to take risks, as long as the risk is relatively low, but may tend to decrease risk taking where risk is high (Isen & Friedman, Note 1; Isen, Means, Patrick, & Nowicki, 1982). In a series of studies reported at the 1981 Carnegie Symposium on Cognition, we began investigation of the influence of affecrive state on willingness to take risks of various kinds. Several facets of the relationship between affect and risk taking bear further study, and the present paper intends to begin this effort. On the basis of earlier data showing that positive affect resulted in more positive expectations, evaluations, and judgments of stimuli (e.g., Isen & Shalker, 1982; Isen, Shalker, Clark, & Karp, 1978; Schiffenbauer, 1974), it seemed plausible to suggest that positive affect would result in more risky behavior. The straightforward prediction that positive affect would simply result in increased risk taking because of improved expectations, however, was counterindicated by data suggesting that people who are feeling good, while they may be more brave under certain circumstances, are also protective of their good mood states (Isen & Simmonds, 1978; the data of Mischel, Ebbeson, & Zeiss, 1973, can also be interpreted in this way). In one study, for example, subjects who had received a dime in the coin return of a public telephone were found to be more helpful than This work was supported in part by R e s e a r c h Grant # M H 36561 from the National Institute of Mental Health to Alice M. Isen. 194 0030-5073/83/020194-09503.00/0 Copyright © 1983by AcademicPress, Inc. All rights of reproduction in any form reserved.
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control subjects on a pleasant task, but less willing than control subjects to help when the task was described as one that would destroy their good mood. For another example, in the study by Mischel et al. (1973), subjects who had succeeded were more likely than a control group to prefer to look at positive, rather than negative, self-relevant information. Thus, in contrast with the expectation that people in good moods might be more likely to take risks, because of their improved evaluations and expectations, it would also be reasonable to expect people who were feeling good to behave more cautiously or conservatively, rather than more bravely, under certain circumstances. Preliminary results confirm that the relationship between positive affect and risk taking is complex, as noted above (Isen et al., 1982). In the series of studies described in that paper, it was found that positive affect had differential effects on different types of risks. Good feelings induced by success on a task of p e r c e p t u a l - m o t o r skill facilitated independence of others (reduced conformity or susceptibility to the influence of others) in social situations, a risk that an independent sample perceived as quite low (2.0 on a scale from 1 to 10). 1 However, positive affect promoted conservativeness in subjects' choice of starting line for their turtles in a turtle race, a risk that was seen as relatively high (6.9 on the same scale). 1 These differential results were obtained for the different types of risks included in those studies. Interpretation of this difference is not immediately obvious, however, because the types of risks differed in more than one way. For example, one was a social risk, while the other risk involved outcome on a game or task; at the same time, we discovered, one risk was considered a low risk, while the other was considered relatively high. Thus, because the risks varied in more than one way, several alternative interpretations of our differential findings remain possible (see, for example, Isen & Friedman, Note 1). Nevertheless, we feel that a crucial factor accounting for these divergent results was the degree of risk involved in the different types of risk presented. In the present studies, we set out to test directly the hypothesis that positive affect will result in risky behavior in low-risk situations but not where risk is high.
METHOD Overview
Two studies were run simultaneously, one employing a dependent measure involving subjects' responses to described hypothetical risk situations and the other a dependent measure involving betting behavior in a game of roulette. There are many different kinds of " r i s k " and ways of J As anchor ratings, subjects were asked to rate the risk of betting on " r e d " in a game of roulette--this averaged a rating of 5.6---and of betting on the number " 4 ' ' - - w h i c h received a mean rating of 9.1. All ratings were significantly different from each other.
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measuring risk, and we wanted to include two different types, in order to broaden the base of our understanding of the influence of affect on risk taking. In addition, studies (e.g., Feather, 1959; Slovic, 1969) have indicated that hypothetical and real risks may be treated differently by subjects. For this reason, both types of measures were included in our examination. Each study utilized a 3 x 2 design, in which level of risk (high, about 20% chance of winning; medium, 50%; and low, about 80%) was crossed with positive vs neutral affect. Positive affect was induced by delivery of an unexpected McDonald's gift certificate to subjects who had volunteered to participate as part of a course requirement in introductory psychology.
Subjects Subjects were 108 college students in introductory psychology who participated as part of the course requirement.
Procedure Groups of two to six subjects were randomly assigned to one of the six conditions in each experiment. Affect manipulation. Before the experiment began, subjects in the positive affect conditions were given a McDonald's gift certificate (worth $.50) and told by the experimenter that it was a token of appreciation for participating in the experiment. The subjects then received instructions for either the hypothetical dilemmas or the roulette game. Subjects in the neutral conditions were not given gift certificates, but simply received instructions. Study 1: Roulette. The experimenter announced that the subjects would be involved in a game of roulette. Subjects were given 10 poker chips and told that these 10 chips represented their credit for participating in the study; and they were given the opportunity to wager these chips (their credit for participating). This was done in order to create a situation where subjects would actually be risking something of value to themselves, but one where they would not have received money (or anything unexpected) from the experimenter, because receiving something additional might itself have functioned as an affect manipulation. " N o w we are going to play a g a m e of roulette. T h e s e 10 chips r e p r e s e n t your credit for participating in this experiment. Y o u are going to have a chance to gamble these chips. Y o u can win more chips, in which case you'll h a v e your choice of a prize as well as y o u r credit for participation, or y o u m a y lose all or part of the original 10 in w h i c h case you w o n ' t get a full h o u r ' s credit for participating in this experiment. Y o u m u s t have 10 chips to receive full credit for this study. O n the other side of the coin, the more chips y o u have, over 10, the better the prize y o u can win. If y o u d o n ' t want to gamble, of course, y o u d o n ' t h a v e to. Y o u can play it safe and not risk your credit. It's up to y o u . "
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The game of roulette, along with the betting system, was explained to the subjects and the following instructions were read: " B e f o r e the e x p e r i m e n t , I placed all the possible bets that one can m a k e in a g a m e of roulette into a box a n d r a n d o m l y picked one. That is, I ' v e already c h o s e n what you c a n bet on, but it's totally up to you w h e t h e r you want to bet and h o w m u c h y o u want to bet, if at all."
The experimenter then explained the type of bet (numbers, colors, or columns and rows) and the risk level. Risk level was expressed in terms of what probability a particular color, number, or group of numbers had of coming up, and this was the probability that the subjects had of winning. Subjects in the high-risk condition were told that they had a 17% chance of winning; in the medium-risk, a 50% chance of winning; and in the low-risk, an 83% chance of winning. The subjects then placed their bets, and the experimenter spun the roulette wheel. After the wheel was spun, the experimenter partially debriefed the subjects, explaining that he was only trying to see how many chips they would bet and that they were not actually risking their participation credit. Subjects were fully debriefed as to the hypotheses of the study by letter following the completion of the experiment. Study 2: Hypothetical dilemmas. High-, medium-, and low-risk versions of two dilemmas were randomly distributed to subjects. Each subject received a handout with two hypothetical dilemmas of the same risk level, either high, medium, or low. They were instructed to read the first dilemma and then stop. The first dilemma, for example, the high-risk one, read as follows: John w o r k s part time at a grocery store earning $2.00 an hour. H o w e v e r , he has a chance to get a part-time job selling products for a local firm which pays $4.00 an h o u r plus c o m m i s s i o n s . The j o b requires a training period of 6 w e e k s after which candidates are evaluated, and 20% of t h e m hired. John would have to quit his j o b at the grocery store in order to enter the training program and before he k n e w if he would actually get the n e w job.
The percentage of candidates hired in the medium-risk dilemmas was 50%, and in the low-risk dilemmas 80%. After the subjects read the first dilemma, the experimenter gave the following instructions: " O n a scale from 1 to 10, with 1 representing very unlikely or no chance, and 10 representing e x t r e m e l y likely or almost certain, please rate h o w likely it is that if you were John you would quit the first j o b and try for the n e w o n e . "
The subjects were then instructed to read the second dilemma, a vignette about deciding whether to set up a corporation in a foreign country which had varying chance of remaining stable long enough for a profit to be realized (Kogan & Wallach, 1964). The chances of stability for the high-, medium-, and low-risk versions were also 20, 50, and 80%, respective-
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ly. After the subjects read the second dilemma, the experimenter again asked them to indicate, on a scale from 1 to 10, their likelihood of taking the chance.
RESULTS Table 1 presents the mean number of chips bet, variances, and proportion of subjects betting in each of the six conditions of Study 1. Table 2 presents the means and variances of subjects' self-ratings of likelihood of taking the risk on the two hypothetical dilemmas (combined). Analysis of variance of the data of Study 1 reveals the predicted interaction for the actual betting measure (F -- 3.2, p < .05). Only the interaction between affect and risk was significant, and the differences were in the predicted direction. Subjects who had been given a McDonald's gift certificate, when presented with a low-risk opportunity to bet, wagered significantly more than control subjects (t(23) = 2.38, p < .025); but those given the opportunity to make a high-risk bet wagered less than control subjects (t(18) = 1.77, p < .05). Number of subjects betting in each condition paralleled these findings, although X2 tests revealed a significant difference only between the low-risk conditions (X2 = 7.27, p < .01). Interestingly, the data on hypothetical risk taking ("how likely would you be t o . . . ?") did not follow this same pattern; an interaction between affect and risk level was not observed. Analyses of hypothetical risk taking revealed a main effect of level of risk (F = 5.26, p < .005). When asked how likely they would be to take a described risk of low, moderate, or high level, subjects' answers appeared influenced by degree of risk and
TABLE 1 STUDY 1: MEAN NUMBER OF CHIPS BET, VARIANCES~ AND PROPORTION OF SUBJECTS BETTING~ IN EACH OF SIX CONDITIONS Condition High Risk Mean Variance (s 2) Proportion Moderate risk Mean Variance (s ~) Proportion Low risk Mean Variance (s 2) Proportion
Positive affect
Neutral affect
.455 .89 3/11,. 27
2.56 12.25 4/9, .44
4.1 12.89 7/10, .70
2.75 3.19 9/12, .75
3.67 3.56 11/12, .92
1.54 6.56 4/13, .31
FEELINGS
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ON RISK TAKING
TABLE 2 STUDY 2: MEAN RATING OF WILLINGNESS TO TAKE A RISK DESCRIBED AS H I G H , MODERATE, OR L O W IN A HYPOTHETICAL SITUATION, UNDER DIFFERENT AFFECT CONDITIONS
Described risk High Moderate Low
Positive affect 5.15 n 4.86 n 6.60 n
(3.34) = 10 (3.64) = 7 (10.68) = 5
Neutral affect 3.30 n 4.67 n 6.63 /7
(1.33) = 5 (.67) : 6 (1.34) = 8
Positive and neutral affect combined 4.53 (3.12) n = 15 4 . 7 7 (1.95) n = 13 6,62 (4.01) n = 13
Note. V a r i a n c e s in p a r e n t h e s e s .
not by affective state. Overall, subjects reported being more willing to take a low risk than a moderate or high risk (t(39) = 2.90, p < .01). Inspection of Table 2 reveals a rather large difference between the positive and neutral affect conditions in the high-risk situation, and a post hoc comparison (two tailed) of these conditions indicates that the difference is highly significant, even with the small number of subjects involved in this contrast (t(13) = 2.39, p < .035). (Note that this difference was in the opposite direction from that obtained in Study 1: Positive affect subjects were m o r e willing than controls to take a high risk.) Likewise, it might be noted that the differences in reported willingness to take risks as a function of level of risk are not significant for the positive affect subjects (t's around 1 or <1), but comparisons of the neutral affect risk-level conditions are highly significant (t(9) = 2.23, p < .025; t(12) = 3.71, p < .003). DISCUSSION Results of the betting study (Study 1) supported the prediction that positive affect would be associated with increased risk taking where risk is low, but not where risk is high. These findings are consistent with the results of studies showing, for example, that positive affect facilitates helping, but only where performing the helpful activity is compatible with maintaining the affective state (Isen & Simmonds, 1978). The present findings confirm in another setting and context this tendency of people who are feeling good to be protective of their positive feeling states. Interestingly, results of simultaneously conducted Study 2, which involves subjects' judgments regarding hypothetical situations of low, moderate, and high degree of risk, did not find the same results. First, it did not obtain the same interaction between affect and level of risk, but rather, found an effect of level of risk alone. As risk went up, expressed willing-
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ness to take the chance went down. Parenthetically, it might be added that this effect of level of risk, although not resulting in a significant interaction, was more pronounced in the neutral affect state than in the positive, primarily because subjects in whom positive affect had been induced expressed much greater willingness than neutral affect subjects to take a high risk. In addition, there was a tendency for positive affect subjects to express more willingness to take risks, although, again, this tendency was significant in only the high-risk condition. This difference was opposite in direction from that obtained in Study 1. The results of Study 2 contrast markedly with those of Study 1 and call attention to the need to attend to differences in dependent measures of risk, when studying risk taking. Hypothetical risk taking seems less influenced by affect state than does actual willingness to take a chance with tangible resources; and it seems to follow a simpler pattern of influence, where it is influenced. This finding is compatible with that of Slovic, Lichtenstein, and Edwards (1965), who suggested that situations involving imaginary incentives might produce simpler decision strategies. On a hypothetical risk, our study found that in general people were more cautious as level of risk rose. The exception to this generalization was that persons who were feeling elated, in comparison with controls, behaved more daringly on a high-risk option. Positive affect subjects were more willing than control subjects to take a risk on a "long shot." When the situation was one of real risk, however, the picture was markedly different. Elated subjects did not "throw caution to the wind": they bet more than control subjects on a low-risk bet, where there was little chance of losing; but they were even more conservative than control subjects in the face of a substantial chance of losing. It should be emphasized that the finding of different results for hypothetical vs real risks has been obtained before (e.g., Feather, 1959; Slovic, 1969). In the present investigation the tasks involved in the two studies were quite divergent. This was done initially in order to broaden our base of observation and to include the type of task that has been used before in social psychological studies of risk taking (e.g., Kogan & Wallach, 1964; see also Cartwright, 1973). But one consequence of our approach is that readers might be tempted to attribute the difference that we observed in risk-taking on the two tasks to factors other than their varying degrees of reality of risk. It is in this context that it is especially instructive to recall that the experiments reported in this paper do not stand alone in having found a difference between real and hypothetical risk-taking situations. In addition, it should be noted that, while the results of Study 2 differ from those of Study 1, conceptually the two sets of results are compatible. If the basic finding of Study 1 is that people who are feeling good exhibit more bravado when there is little chance of actually losing, then
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on a "metalevel" the findings of Study 2, which involved only hypothetical losses (no real chance of losing), fit this formulation. An alternative interpretation of the results of Study 1 that has been proposed is that the expected outcomes were not equivalent in the positive-affect and control conditions, and that subjects in these conditions differed in their risk-taking tendency because of this difference in the utility of winning or losing. That is, subjects in the positive condition had received a gift certificate and therefore were $.50 richer and in addition might have been more likely actually to have expected prizes to be awarded. Thus, without any influence of affective state at all, subjects in the positive condition might have had a greater expected utility for winning and might have been more willing to take the risk in the low- and moderate-risk conditions because of this. Yet this interpretation would not account for the interaction obtained, the tendency of positive affect subjects to avoid the risk in the high-risk condition. Neither can this latter finding be accounted for by postulating, without an influence of affective state, a change among subjects in the positive affect condition, in the utility of losing. Since the potential loss was a loss not in money but in participation credit, in which the two conditions were equivalent, the positive and control conditions should have been equivalent in subjective value of a loss. Thus, our findings cannot be explained more simply within a theory of subjective utility, without reference to the affective state that was induced. Ideally, to address this point our study might be replicated using affect inductions that do not involve giving subjects anything tangible. Here, however, it should be noted that the earlier studies described in the introduction, which obtained results compatible with the present ones (although preliminary), did exactly that: they used report of success on a task, not a free gift, as the positive-affect induction. Thus, it seems that the results obtained in Study 1 cannot be accounted for without reference to the concept of feeling state induced. Finally, we might mention that these studies tell us only about risk taking where level of risk is clearly specified for participants. The advantage of the technique that we used is that it allows us to study the influence of affect on willingness to take a risk, independent of its effect on calculation or perception of that risk (expectation of winning). At the same time, it should be noted that calculation of risk may also be influenced by affecting state, and that observed risk taking might therefore show a different pattern in cases where people have to calculate for themselves the degree of risk involved in a course of action. There is reason to believe, for example, that positive affect may lead to improved expectations regarding probable outcomes, through its influence on memory and judgment (e.g., Isen & Shalker, 1982; Isen et al., 1978). And this might lead to altered assessment of the degree of risk involved and altered risk
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taking as a consequence. In addition, if affect differentially influences perception of, or attention to, costs and rewards through the same means (priming of affect-compatible material), for another example, it might again influence perception of risk where risk has to be calculated by the person. Thus, while the present studies tell us about the influence of positive affect on willingness to take a risk of a specified probability level, the necessity of calculating for oneself the chances of winning might alter the differences between affect conditions in observed risk taking. Such studies are needed to extend our understanding of the influence of positive feelings on risk taking. REFERENCES Cartwright, D. Determinants of scientific progress: The case of research on the risky shift. American Psychologist, 1973, 28, 222-231. Feather, N. T. Subjective probability and decision under uncertainty. Psychological Review, 1959, 66, 150-164. Isen, A. M., Shalker, T. E., Clark, M. S., & Karp, L. Affect, accessibility of material in memory, and behavior: A cognitive loop? Journal of Personality and Social Psychology, 1978, 36, 1-12. Isen, A. M., & Simmonds, S. F. The effect of feeling good on a helping task that is incompatible with good mood. Social Psychology, 1978, 41,346-349. Isen, A. M., Means, B., Patrick, R., & Nowicki, G. P. Positive affect and decision making. In M. S. Clark & S. Fiske (Eds.), Affect and cognition. Hillsdale, N.J.: Erlbaum, 1982. Isen, A. M., & Shalker, T. E. The effect of feeling state on evaluation of positive, neutral, and negative stimuli: When you "accentuate the positive," do you "eliminate the negative"? Social Psychology Quarterly, 1982, 45, 58-63. Kogan, N., & WaUach, N. W. Risk-taking: A study in cognition and personality. New York: Holt, 1964. Mischel, W., Ebbesen, E., & Zeiss, A. Selective attention to the self: Situational and dispositional determinants. Journal of Personality and Social Psychology, 1973, 27, 129-142. Schiffenbauer, A. Effect of observer's emotional state on judgments of the emotional state of others. Journal of Personality and Social Psychology, 1974, 30, 31-35. Slovic, P. Differential effects of real versus hypothetical payoffs on choices among gambles. Journal of Experimental Psychology, 1969, 80, 434-437. Slovic, P., Lichtenstein, S. C., & Edwards, W. Boredom-induced changes in preferences among bets. American Journal of Psychology, 1965, 78, 208-217.
REFERENCE NOTE 1. Isen A. M., & Friedman, C. H. The effect of positive and negative feeling states on susceptibility to social influence and risk taking. Unpublished manuscript, University of Maryland, 1977. RECEIVED: January 11, 1982.
The Effect of Positive Feelings on Risk Taking: When the Chips Are Down ALICE M.
[SEN AND ROBERT PATRICK
University of Maryland T w o studies c o n d u c t e d simultaneously investigated the influence o f positive affect on risk taking. Results of the study, which employed an actual m e a s u r e of subjects' willingness to bet s o m e t h i n g of value, supported the prediction of an interaction b e t w e e n level of risk and positive affect: subjects w h o had reason to be feeling elated bet m o r e than control subjects on a low-risk bet, but wagered less t h a n controls on a high-risk bet. At the s a m e time, in contrast, a study involving hypothetical risk-taking s h o w e d that in general subjects were m o r e willing to take the chance as probability of s u c c e s s went up; but that elated subjects were more daring than controls on a " l o n g s h o t . " Differences in hypothetical vs real risk taking were noted, and the complexity (the interaction) of the influence o f positive feelings on real risk taking was e m p h a s i z e d . T h e results were related to other r e s e a r c h suggesting an influence of feeling states on cognitive p r o c e s s e s and decision making.
Recent studies investigating the influence of affect on risk taking suggest that positive affect may increase the tendency to take risks, as long as the risk is relatively low, but may tend to decrease risk taking where risk is high (Isen & Friedman, Note 1; Isen, Means, Patrick, & Nowicki, 1982). In a series of studies reported at the 1981 Carnegie Symposium on Cognition, we began investigation of the influence of affecrive state on willingness to take risks of various kinds. Several facets of the relationship between affect and risk taking bear further study, and the present paper intends to begin this effort. On the basis of earlier data showing that positive affect resulted in more positive expectations, evaluations, and judgments of stimuli (e.g., Isen & Shalker, 1982; Isen, Shalker, Clark, & Karp, 1978; Schiffenbauer, 1974), it seemed plausible to suggest that positive affect would result in more risky behavior. The straightforward prediction that positive affect would simply result in increased risk taking because of improved expectations, however, was counterindicated by data suggesting that people who are feeling good, while they may be more brave under certain circumstances, are also protective of their good mood states (Isen & Simmonds, 1978; the data of Mischel, Ebbeson, & Zeiss, 1973, can also be interpreted in this way). In one study, for example, subjects who had received a dime in the coin return of a public telephone were found to be more helpful than This work was supported in part by R e s e a r c h Grant # M H 36561 from the National Institute of Mental Health to Alice M. Isen. 194 0030-5073/83/020194-09503.00/0 Copyright © 1983by AcademicPress, Inc. All rights of reproduction in any form reserved.
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control subjects on a pleasant task, but less willing than control subjects to help when the task was described as one that would destroy their good mood. For another example, in the study by Mischel et al. (1973), subjects who had succeeded were more likely than a control group to prefer to look at positive, rather than negative, self-relevant information. Thus, in contrast with the expectation that people in good moods might be more likely to take risks, because of their improved evaluations and expectations, it would also be reasonable to expect people who were feeling good to behave more cautiously or conservatively, rather than more bravely, under certain circumstances. Preliminary results confirm that the relationship between positive affect and risk taking is complex, as noted above (Isen et al., 1982). In the series of studies described in that paper, it was found that positive affect had differential effects on different types of risks. Good feelings induced by success on a task of p e r c e p t u a l - m o t o r skill facilitated independence of others (reduced conformity or susceptibility to the influence of others) in social situations, a risk that an independent sample perceived as quite low (2.0 on a scale from 1 to 10). 1 However, positive affect promoted conservativeness in subjects' choice of starting line for their turtles in a turtle race, a risk that was seen as relatively high (6.9 on the same scale). 1 These differential results were obtained for the different types of risks included in those studies. Interpretation of this difference is not immediately obvious, however, because the types of risks differed in more than one way. For example, one was a social risk, while the other risk involved outcome on a game or task; at the same time, we discovered, one risk was considered a low risk, while the other was considered relatively high. Thus, because the risks varied in more than one way, several alternative interpretations of our differential findings remain possible (see, for example, Isen & Friedman, Note 1). Nevertheless, we feel that a crucial factor accounting for these divergent results was the degree of risk involved in the different types of risk presented. In the present studies, we set out to test directly the hypothesis that positive affect will result in risky behavior in low-risk situations but not where risk is high.
METHOD Overview
Two studies were run simultaneously, one employing a dependent measure involving subjects' responses to described hypothetical risk situations and the other a dependent measure involving betting behavior in a game of roulette. There are many different kinds of " r i s k " and ways of J As anchor ratings, subjects were asked to rate the risk of betting on " r e d " in a game of roulette--this averaged a rating of 5.6---and of betting on the number " 4 ' ' - - w h i c h received a mean rating of 9.1. All ratings were significantly different from each other.
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measuring risk, and we wanted to include two different types, in order to broaden the base of our understanding of the influence of affect on risk taking. In addition, studies (e.g., Feather, 1959; Slovic, 1969) have indicated that hypothetical and real risks may be treated differently by subjects. For this reason, both types of measures were included in our examination. Each study utilized a 3 x 2 design, in which level of risk (high, about 20% chance of winning; medium, 50%; and low, about 80%) was crossed with positive vs neutral affect. Positive affect was induced by delivery of an unexpected McDonald's gift certificate to subjects who had volunteered to participate as part of a course requirement in introductory psychology.
Subjects Subjects were 108 college students in introductory psychology who participated as part of the course requirement.
Procedure Groups of two to six subjects were randomly assigned to one of the six conditions in each experiment. Affect manipulation. Before the experiment began, subjects in the positive affect conditions were given a McDonald's gift certificate (worth $.50) and told by the experimenter that it was a token of appreciation for participating in the experiment. The subjects then received instructions for either the hypothetical dilemmas or the roulette game. Subjects in the neutral conditions were not given gift certificates, but simply received instructions. Study 1: Roulette. The experimenter announced that the subjects would be involved in a game of roulette. Subjects were given 10 poker chips and told that these 10 chips represented their credit for participating in the study; and they were given the opportunity to wager these chips (their credit for participating). This was done in order to create a situation where subjects would actually be risking something of value to themselves, but one where they would not have received money (or anything unexpected) from the experimenter, because receiving something additional might itself have functioned as an affect manipulation. " N o w we are going to play a g a m e of roulette. T h e s e 10 chips r e p r e s e n t your credit for participating in this experiment. Y o u are going to have a chance to gamble these chips. Y o u can win more chips, in which case you'll h a v e your choice of a prize as well as y o u r credit for participation, or y o u m a y lose all or part of the original 10 in w h i c h case you w o n ' t get a full h o u r ' s credit for participating in this experiment. Y o u m u s t have 10 chips to receive full credit for this study. O n the other side of the coin, the more chips y o u have, over 10, the better the prize y o u can win. If y o u d o n ' t want to gamble, of course, y o u d o n ' t h a v e to. Y o u can play it safe and not risk your credit. It's up to y o u . "
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The game of roulette, along with the betting system, was explained to the subjects and the following instructions were read: " B e f o r e the e x p e r i m e n t , I placed all the possible bets that one can m a k e in a g a m e of roulette into a box a n d r a n d o m l y picked one. That is, I ' v e already c h o s e n what you c a n bet on, but it's totally up to you w h e t h e r you want to bet and h o w m u c h y o u want to bet, if at all."
The experimenter then explained the type of bet (numbers, colors, or columns and rows) and the risk level. Risk level was expressed in terms of what probability a particular color, number, or group of numbers had of coming up, and this was the probability that the subjects had of winning. Subjects in the high-risk condition were told that they had a 17% chance of winning; in the medium-risk, a 50% chance of winning; and in the low-risk, an 83% chance of winning. The subjects then placed their bets, and the experimenter spun the roulette wheel. After the wheel was spun, the experimenter partially debriefed the subjects, explaining that he was only trying to see how many chips they would bet and that they were not actually risking their participation credit. Subjects were fully debriefed as to the hypotheses of the study by letter following the completion of the experiment. Study 2: Hypothetical dilemmas. High-, medium-, and low-risk versions of two dilemmas were randomly distributed to subjects. Each subject received a handout with two hypothetical dilemmas of the same risk level, either high, medium, or low. They were instructed to read the first dilemma and then stop. The first dilemma, for example, the high-risk one, read as follows: John w o r k s part time at a grocery store earning $2.00 an hour. H o w e v e r , he has a chance to get a part-time job selling products for a local firm which pays $4.00 an h o u r plus c o m m i s s i o n s . The j o b requires a training period of 6 w e e k s after which candidates are evaluated, and 20% of t h e m hired. John would have to quit his j o b at the grocery store in order to enter the training program and before he k n e w if he would actually get the n e w job.
The percentage of candidates hired in the medium-risk dilemmas was 50%, and in the low-risk dilemmas 80%. After the subjects read the first dilemma, the experimenter gave the following instructions: " O n a scale from 1 to 10, with 1 representing very unlikely or no chance, and 10 representing e x t r e m e l y likely or almost certain, please rate h o w likely it is that if you were John you would quit the first j o b and try for the n e w o n e . "
The subjects were then instructed to read the second dilemma, a vignette about deciding whether to set up a corporation in a foreign country which had varying chance of remaining stable long enough for a profit to be realized (Kogan & Wallach, 1964). The chances of stability for the high-, medium-, and low-risk versions were also 20, 50, and 80%, respective-
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ly. After the subjects read the second dilemma, the experimenter again asked them to indicate, on a scale from 1 to 10, their likelihood of taking the chance.
RESULTS Table 1 presents the mean number of chips bet, variances, and proportion of subjects betting in each of the six conditions of Study 1. Table 2 presents the means and variances of subjects' self-ratings of likelihood of taking the risk on the two hypothetical dilemmas (combined). Analysis of variance of the data of Study 1 reveals the predicted interaction for the actual betting measure (F -- 3.2, p < .05). Only the interaction between affect and risk was significant, and the differences were in the predicted direction. Subjects who had been given a McDonald's gift certificate, when presented with a low-risk opportunity to bet, wagered significantly more than control subjects (t(23) = 2.38, p < .025); but those given the opportunity to make a high-risk bet wagered less than control subjects (t(18) = 1.77, p < .05). Number of subjects betting in each condition paralleled these findings, although X2 tests revealed a significant difference only between the low-risk conditions (X2 = 7.27, p < .01). Interestingly, the data on hypothetical risk taking ("how likely would you be t o . . . ?") did not follow this same pattern; an interaction between affect and risk level was not observed. Analyses of hypothetical risk taking revealed a main effect of level of risk (F = 5.26, p < .005). When asked how likely they would be to take a described risk of low, moderate, or high level, subjects' answers appeared influenced by degree of risk and
TABLE 1 STUDY 1: MEAN NUMBER OF CHIPS BET, VARIANCES~ AND PROPORTION OF SUBJECTS BETTING~ IN EACH OF SIX CONDITIONS Condition High Risk Mean Variance (s 2) Proportion Moderate risk Mean Variance (s ~) Proportion Low risk Mean Variance (s 2) Proportion
Positive affect
Neutral affect
.455 .89 3/11,. 27
2.56 12.25 4/9, .44
4.1 12.89 7/10, .70
2.75 3.19 9/12, .75
3.67 3.56 11/12, .92
1.54 6.56 4/13, .31
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TABLE 2 STUDY 2: MEAN RATING OF WILLINGNESS TO TAKE A RISK DESCRIBED AS H I G H , MODERATE, OR L O W IN A HYPOTHETICAL SITUATION, UNDER DIFFERENT AFFECT CONDITIONS
Described risk High Moderate Low
Positive affect 5.15 n 4.86 n 6.60 n
(3.34) = 10 (3.64) = 7 (10.68) = 5
Neutral affect 3.30 n 4.67 n 6.63 /7
(1.33) = 5 (.67) : 6 (1.34) = 8
Positive and neutral affect combined 4.53 (3.12) n = 15 4 . 7 7 (1.95) n = 13 6,62 (4.01) n = 13
Note. V a r i a n c e s in p a r e n t h e s e s .
not by affective state. Overall, subjects reported being more willing to take a low risk than a moderate or high risk (t(39) = 2.90, p < .01). Inspection of Table 2 reveals a rather large difference between the positive and neutral affect conditions in the high-risk situation, and a post hoc comparison (two tailed) of these conditions indicates that the difference is highly significant, even with the small number of subjects involved in this contrast (t(13) = 2.39, p < .035). (Note that this difference was in the opposite direction from that obtained in Study 1: Positive affect subjects were m o r e willing than controls to take a high risk.) Likewise, it might be noted that the differences in reported willingness to take risks as a function of level of risk are not significant for the positive affect subjects (t's around 1 or <1), but comparisons of the neutral affect risk-level conditions are highly significant (t(9) = 2.23, p < .025; t(12) = 3.71, p < .003). DISCUSSION Results of the betting study (Study 1) supported the prediction that positive affect would be associated with increased risk taking where risk is low, but not where risk is high. These findings are consistent with the results of studies showing, for example, that positive affect facilitates helping, but only where performing the helpful activity is compatible with maintaining the affective state (Isen & Simmonds, 1978). The present findings confirm in another setting and context this tendency of people who are feeling good to be protective of their positive feeling states. Interestingly, results of simultaneously conducted Study 2, which involves subjects' judgments regarding hypothetical situations of low, moderate, and high degree of risk, did not find the same results. First, it did not obtain the same interaction between affect and level of risk, but rather, found an effect of level of risk alone. As risk went up, expressed willing-
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ness to take the chance went down. Parenthetically, it might be added that this effect of level of risk, although not resulting in a significant interaction, was more pronounced in the neutral affect state than in the positive, primarily because subjects in whom positive affect had been induced expressed much greater willingness than neutral affect subjects to take a high risk. In addition, there was a tendency for positive affect subjects to express more willingness to take risks, although, again, this tendency was significant in only the high-risk condition. This difference was opposite in direction from that obtained in Study 1. The results of Study 2 contrast markedly with those of Study 1 and call attention to the need to attend to differences in dependent measures of risk, when studying risk taking. Hypothetical risk taking seems less influenced by affect state than does actual willingness to take a chance with tangible resources; and it seems to follow a simpler pattern of influence, where it is influenced. This finding is compatible with that of Slovic, Lichtenstein, and Edwards (1965), who suggested that situations involving imaginary incentives might produce simpler decision strategies. On a hypothetical risk, our study found that in general people were more cautious as level of risk rose. The exception to this generalization was that persons who were feeling elated, in comparison with controls, behaved more daringly on a high-risk option. Positive affect subjects were more willing than control subjects to take a risk on a "long shot." When the situation was one of real risk, however, the picture was markedly different. Elated subjects did not "throw caution to the wind": they bet more than control subjects on a low-risk bet, where there was little chance of losing; but they were even more conservative than control subjects in the face of a substantial chance of losing. It should be emphasized that the finding of different results for hypothetical vs real risks has been obtained before (e.g., Feather, 1959; Slovic, 1969). In the present investigation the tasks involved in the two studies were quite divergent. This was done initially in order to broaden our base of observation and to include the type of task that has been used before in social psychological studies of risk taking (e.g., Kogan & Wallach, 1964; see also Cartwright, 1973). But one consequence of our approach is that readers might be tempted to attribute the difference that we observed in risk-taking on the two tasks to factors other than their varying degrees of reality of risk. It is in this context that it is especially instructive to recall that the experiments reported in this paper do not stand alone in having found a difference between real and hypothetical risk-taking situations. In addition, it should be noted that, while the results of Study 2 differ from those of Study 1, conceptually the two sets of results are compatible. If the basic finding of Study 1 is that people who are feeling good exhibit more bravado when there is little chance of actually losing, then
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on a "metalevel" the findings of Study 2, which involved only hypothetical losses (no real chance of losing), fit this formulation. An alternative interpretation of the results of Study 1 that has been proposed is that the expected outcomes were not equivalent in the positive-affect and control conditions, and that subjects in these conditions differed in their risk-taking tendency because of this difference in the utility of winning or losing. That is, subjects in the positive condition had received a gift certificate and therefore were $.50 richer and in addition might have been more likely actually to have expected prizes to be awarded. Thus, without any influence of affective state at all, subjects in the positive condition might have had a greater expected utility for winning and might have been more willing to take the risk in the low- and moderate-risk conditions because of this. Yet this interpretation would not account for the interaction obtained, the tendency of positive affect subjects to avoid the risk in the high-risk condition. Neither can this latter finding be accounted for by postulating, without an influence of affective state, a change among subjects in the positive affect condition, in the utility of losing. Since the potential loss was a loss not in money but in participation credit, in which the two conditions were equivalent, the positive and control conditions should have been equivalent in subjective value of a loss. Thus, our findings cannot be explained more simply within a theory of subjective utility, without reference to the affective state that was induced. Ideally, to address this point our study might be replicated using affect inductions that do not involve giving subjects anything tangible. Here, however, it should be noted that the earlier studies described in the introduction, which obtained results compatible with the present ones (although preliminary), did exactly that: they used report of success on a task, not a free gift, as the positive-affect induction. Thus, it seems that the results obtained in Study 1 cannot be accounted for without reference to the concept of feeling state induced. Finally, we might mention that these studies tell us only about risk taking where level of risk is clearly specified for participants. The advantage of the technique that we used is that it allows us to study the influence of affect on willingness to take a risk, independent of its effect on calculation or perception of that risk (expectation of winning). At the same time, it should be noted that calculation of risk may also be influenced by affecting state, and that observed risk taking might therefore show a different pattern in cases where people have to calculate for themselves the degree of risk involved in a course of action. There is reason to believe, for example, that positive affect may lead to improved expectations regarding probable outcomes, through its influence on memory and judgment (e.g., Isen & Shalker, 1982; Isen et al., 1978). And this might lead to altered assessment of the degree of risk involved and altered risk
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taking as a consequence. In addition, if affect differentially influences perception of, or attention to, costs and rewards through the same means (priming of affect-compatible material), for another example, it might again influence perception of risk where risk has to be calculated by the person. Thus, while the present studies tell us about the influence of positive affect on willingness to take a risk of a specified probability level, the necessity of calculating for oneself the chances of winning might alter the differences between affect conditions in observed risk taking. Such studies are needed to extend our understanding of the influence of positive feelings on risk taking. REFERENCES Cartwright, D. Determinants of scientific progress: The case of research on the risky shift. American Psychologist, 1973, 28, 222-231. Feather, N. T. Subjective probability and decision under uncertainty. Psychological Review, 1959, 66, 150-164. Isen, A. M., Shalker, T. E., Clark, M. S., & Karp, L. Affect, accessibility of material in memory, and behavior: A cognitive loop? Journal of Personality and Social Psychology, 1978, 36, 1-12. Isen, A. M., & Simmonds, S. F. The effect of feeling good on a helping task that is incompatible with good mood. Social Psychology, 1978, 41,346-349. Isen, A. M., Means, B., Patrick, R., & Nowicki, G. P. Positive affect and decision making. In M. S. Clark & S. Fiske (Eds.), Affect and cognition. Hillsdale, N.J.: Erlbaum, 1982. Isen, A. M., & Shalker, T. E. The effect of feeling state on evaluation of positive, neutral, and negative stimuli: When you "accentuate the positive," do you "eliminate the negative"? Social Psychology Quarterly, 1982, 45, 58-63. Kogan, N., & WaUach, N. W. Risk-taking: A study in cognition and personality. New York: Holt, 1964. Mischel, W., Ebbesen, E., & Zeiss, A. Selective attention to the self: Situational and dispositional determinants. Journal of Personality and Social Psychology, 1973, 27, 129-142. Schiffenbauer, A. Effect of observer's emotional state on judgments of the emotional state of others. Journal of Personality and Social Psychology, 1974, 30, 31-35. Slovic, P. Differential effects of real versus hypothetical payoffs on choices among gambles. Journal of Experimental Psychology, 1969, 80, 434-437. Slovic, P., Lichtenstein, S. C., & Edwards, W. Boredom-induced changes in preferences among bets. American Journal of Psychology, 1965, 78, 208-217.
REFERENCE NOTE 1. Isen A. M., & Friedman, C. H. The effect of positive and negative feeling states on susceptibility to social influence and risk taking. Unpublished manuscript, University of Maryland, 1977. RECEIVED: January 11, 1982.