Power, Optimism, and Risk-Taking
By Cameron Anderson, University of California, Berkeley, and
Adam D. Galinsky, Northwestern University, Evanston, Illinois
Power fascinates. People spend an inordinate amount of time attending to, thinking about, and discussing the thoughts and behaviors of powerful and prestigious individuals—be they heads of state, CEOs, or prominent members of their local church, club, or community. Though typically viewed as frivolous and the province of gossip and gawking, this interest in powerholders is often important and useful. On a practical level, understanding the minds of those with power helps people appreciate how their leaders make decisions—decisions that impact people’s own lives. The behaviors of the powerful have inordinate pull, in that their actions have greater impact and matter more compared to those without power. On a theoretical level, understanding powerholders’ behavior can also provide a window into human nature more broadly; for only when people possess power do some of their deepest desires and motivations reveal themselves in the light of day.
Research on the possession of power has shown that power affects diverse psychological processes, from stereotyping to styles of dress. To help integrate these disparate findings, a recent theory proposed that power influences the relative activation of two broad and fundamental behavioral systems: the behavioral approach and inhibition systems. As we discuss below, these two behavioral systems help individuals pursue rewards and avoid threats, respectively, by coordinating diverse affective, cognitive, and behavioral processes. Although a number of recent studies have begun to provide empirical support for this theory, many of its tenets and implications have yet to be directly examined.
In the current investigation, we explore the implications of this Approach/Inhibition model by examining the effects of possessing power on risk perceptions and risk-taking behavior. Intuitively, it might seem that lacking power would be associated with more risky behaviors, and there is some empirical evidence to support this intuition. For example, low levels of socioeconomic status (SES) have been associated with higher rates of risky sexual behavior, drug use, and behavioral habits. Social exclusion has been shown to produce more risky, self-defeating behaviors. Some additional evidence emerges from primate studies in which lower-status male vervet monkeys tend to be more impulsively violent compared to their higher status peers. In fact, this violent impulsivity is one mechanism by which a low-status monkey can climb the status hierarchy. Thus, low-power individuals might be more risk-seeking because they are willing to do anything to get out of their disadvantaged position.
This notion also brings into sharp relief the fact that low-power individuals have less to lose by behaving in a risky manner. The powerful may lose access to and control over valued resources if the downside of risk is realized, and thus the powerful might fear losing what they have (i.e., their gains), and act more conservatively. This logic of the powerless having less to lose by taking risks would also appear to be consistent with prospect theory, which states that being in domain of losses produces risk-seeking behavior. If the lack of power puts people in the domain of losses and possessing power puts people into the domain of gains, then power should have a negative relationship with risky behavior.
However, based on the idea that possessing and lacking power differentially activate the behavioral approach and inhibition systems, we propose that power increases, rather than decreases, risk-taking behavior. As we will argue, possessing power should lead individuals to pay more attention to the potential payoffs inherent in risky actions and devote less attention to the potential dangers. And as we detail in Study 3, the value function of prospect theory is conceptually independent of the optimism people feel toward potential outcomes, and therefore our hypotheses are independent of those from prospect theory. Therefore, power should increase optimism when perceiving risks, which should lead to an increased propensity to engage in risks.
We tested the path from power to optimism to risky behavior in five studies, using multiple instantiations of the sense of power, and multiple measures of optimism, risk perception, and risk preference. Across these studies, we examined whether power leads to more optimistic risk perceptions and to a preference for riskier paths of action, regardless of how the sense of power is activated or assessed (semantically, through a recall task, with an individual difference measure, or a context-specific measure), or the nature of the risk involved (minor or major, relevant to self or not, controllable or uncontrollable). Further, we aimed to rule out alternative explanations for the findings, such as self-efficacy based accounts, and to identify boundary conditions—specifically, we aimed to show that when powerful individuals feel a sense of responsibility they become less risk-seeking.
Read the entire publication “Power, Optimism, and Risk-Taking,” with A. Galinsky. European Journal of Social Psychology: Special issue on social power 36: 511-536
Abstract of Power, Optimism, and Risk-Taking
Five studies investigated the hypotheses that the sense of power increases optimism in perceiving risks and leads to more risky behavior. In Studies 1 and 2, individuals with a higher generalized sense of power and those primed with a high-power mind-set were more optimistic in their perceptions of risk. Study 3 primed the concept of power non-consciously and found that both power and gain/loss frame had independent effects on risk preferences. In Study 4, those primed with a high-power mind-set were more likely to act in a risk-seeking fashion (i.e., engage in unprotected sex). In Study 5, individuals with a higher sense of power in a face-to-face negotiation took more risks by divulging their interests. The effects of power on risk-taking were mediated by optimistic risk perceptions and not by self-efficacy beliefs. Further, these effects were attenuated when the high-power individual felt a sense of responsibility. Copyright # 2006 John Wiley & Sons, Ltd.
About Cameron Anderson, Ph.D.
Cameron Anderson is the Lorraine Tyson Mitchell Chair II in Leadership and Communication at the Haas School of Business and an associate professor in the Management and Organizations department.
Cameron received his Ph.D. in Psychology from the University of California, Berkeley in 2001. He taught at Kellogg School of Management (Northwestern University) and at the Stern School of Business (New York University) prior to Haas. He was voted Professor of the Year by the MBA students at the Stern School in 2005 and won the top teaching award at Haas in Full-Time M.B.A. Program in 2008. He teaches in the Center for Executive Education and at companies around the country in addition to the MBA programs. His teaching focuses primarily on leadership, power and politics, teamwork, negotiation, and conflict management.