How Luck and Fortune Shape Risk-Taking Behaviors

Andrea Y. Ranieri

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Decision-Making and Behavioral Economics Experimental Behavioral Economics Studies Gambling Behavior and Treatments

Abstract

The current study uses a lottery-based paradigm to examine how risk taking is affected by two specific types of good and bad experiences, luck and fortune. Though the terms are often used interchangeably, we suggest that they refer to two separate aspects of risk. Fortune refers to the overall positivity or negativity of the overall context, whereas luck refers to the probability of a better or worse outcome. To make the lottery context fortunate or unfortunate, a set of mixed-valence control lotteries were surrounded by all gain (good fortune) or all loss lotteries (bad fortune). To make the lotteries lucky or unlucky, the proportion of better outcomes received was fixed to be well above (good luck) or well below (bad luck) 50%. Results of the study suggest that, fortune, but not luck, had a significant influence on risk taking behaviors. Participants who experienced good fortune decreased risk taking, and those who experienced bad fortune increased risk taking. When asked, however, participants were unable to differentiate between the luck and fortune manipulations. Gains and losses due to fortune were undifferentiated from gains and losses due to luck. Yet, it was found that the number of gain outcomes received, which was determined by the luck-fortune combination, largely determined subjective experiences of luck and fortune. Consistent with the somatic marker and hedonic editing hypotheses, more gain outcomes led to a heightened sense of good luck and good fortune. Following on SPA (security/ potential aspiration) theory, we suggest that these differences in risk taking behavior in response to fortune may be due to increased attention to goals emphasizing security versus potential.

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