Effects of Acute Stress on Risk Taking in Financial Decisions (Dissertation

The purpose of this study was to examine the association between acute stress and risk taking in financial decisions. The study includes 40 (31 women, 9 men) 18-22 year old university students. Half of the participants were assigned to a Socially-Evaluated Cold-Pressor task to elicit a physiological stress response, while the other half were assigned to the control (no stress) condition. Individuals then completed two computer tasks (risk propensity and risk premium) that assessed risk taking in financial decisions, both in the gain and loss domain. There was a significant increase in risk taking for participants exposed to an acute stressor in the loss domain and overall. Additionally, there was a significant effect of financial domain (gain vs. loss) on risk propensity across stress/non-stress conditions. Participants were more risk prone in the gain domain than in the loss domain. Our data suggests that acute stress may play a role in the way people assess risk in decision making, specifically within the financial decisions. This research will help us understand the interaction between stressful environments, and how individuals make risk related decisions under these conditions