טכניון מכון טכנולוגי לישראל
הטכניון מכון טכנולוגי לישראל - בית הספר ללימודי מוסמכים  
Ph.D Thesis
Ph.D StudentAriel Telpaz
SubjectReliability of Risk Taking Behavior: The Moderating Role of
Losses
DepartmentDepartment of Industrial Engineering and Management
Supervisor Full Professor Yechiam Eldad
Full Thesis textFull thesis text - English Version


Abstract

There is a lack of agreement in the research literature about which factors determine risk taking behavior, contextual or trait related. A major cause of this debate stems from the fact that there are inconsistent findings regarding the reliability of the behavior. While some theories argue that risk taking is a reliable trait, previous studies demonstrated that even subtle changes in the properties of the context may induce people to change their risk preference. In this work I tried to address the contradicting findings using an interactionist model. According to the model, the reliability of risk taking behavior is moderated by the existence of losses in the situation. Losses function as a cue that guides the individual to invest more attention in the task, thus leading to more reliable and less random behavior.

The first section describes two studies which were designed to test whether individuals would show more behavioral consistency in risk-taking tasks involving losses. The consistency of risky choices across different experience-based tasks was evaluated for gain, loss, and mixed (gain loss) tasks. In both studies, losses facilitated the consistency across tasks: the correlation between risk taking choices in different tasks increased when the tasks involved losses. Study 2 also showed a positive effect of losses on temporal consistency.

In the second section, I presented a study which examined whether the relationship between a stable marker of approach-avoidance behaviors, EEG frontal asymmetry, and risk taking is moderated by the availability of losses.  Fifty-seven participants performed an experiential decision task in a gain, loss, and mixed conditions. Increased risk taking on the part of individuals with relatively high activation in the left frontal cortex was only observed in the mixed task. Event-related potential analysis shed light on the processes leading to this pattern. Left-frontal dominant individuals had increased P300 activation following risky compared to safe outcomes, while right-frontal dominant individuals had increased feedback error related negativity. Both of these dynamics emerged only when losses were contrasted with gains.

Taken together, the studies presented in this work demonstrated how the presence of losses in the situation increases the reliability of risk-taking behavior and the relation between the physiological (frontal asymmetry) predisposition to take risk and actual risk taking. The results further suggest that this is due to the effect of losses on attention. This stresses the merit of an interactionist approach to the study of risk taking behavior.