How to Feel Better about Risk-taking

Another psychological phenomenon is studied in the business world. Sometimes these concepts seem unsurprising, but until demonstrated by research, one might not think about them seriously. This is a good example. It suggests that by being in a risk-taking environment or by recently reading about a successful risk-taker, one is more likely to make riskier decisions. The underlying facts and rational considerations of course are unchanging. Another trap to avoid -- or at least factor in. On the other hand, if you are unduly risk averse, overcome it by hanging out with risk-takers.

The study has shown that a group of investment advisors and accountants who have read a story on successful risk-taking decisions rated a traded stock as more valuable for investment, in comparison to a group who read a story on successful results of risk avoidance. "Priming, the underlying psychological mechanism, is well known in psychology, but to date was not analyzed with regard to financial decision making the way we did," said Dr. Doron Kliger who carried out the study along with his student Dalia Gilad.