The Role of Hope in Financial Risk Seeking

One construct validation study and four experiments showed that the relationship between hope and financial risk seeking depended on whether or not the possibility of a hoped-for outcome was threatened. Whereas high (vs. low) hope decreased financial risk seeking when the possibility of a hoped-for...

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Bibliographic Details
Published in:Journal of experimental psychology. Applied 2014-12, Vol.20 (4), p.349-364
Main Authors: Reimann, Martin, Nenkov, Gergana Y., MacInnis, Deborah, Morrin, Maureen
Format: Article
Language:English
Subjects:
Adult
Biological and medical sciences
Cognition. Intelligence
Decision Making
Decision making. Choice
Female
Finance
Fundamental and applied biological sciences. Psychology
Gambling - psychology
Hope
Human
Humans
Male
Motivation
Psychology. Psychoanalysis. Psychiatry
Psychology. Psychophysiology
Risk Taking
Threat
Young Adult
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Summary:One construct validation study and four experiments showed that the relationship between hope and financial risk seeking depended on whether or not the possibility of a hoped-for outcome was threatened. Whereas high (vs. low) hope decreased financial risk seeking when the possibility of a hoped-for outcome was not threatened, high (vs. low) hope increased financial risk seeking when the outcome's possibility was threatened. These effects were observed in different contexts (i.e., gambling, stock investing, bidding, retirement investing), when applying different operationalizations of hope and threats to possibility, and when controlling for alternative explanations. We also showed that individuals' motivations to either achieve gains or avoid losses mediated the effects of hope on financial risk seeking. This research, which is the first to study the role of hope in financial decision making, adds to the extant literature by underscoring the psychological impact of threats to the possibility of attaining a hoped-for financial outcome.
ISSN:1076-898X
1939-2192
DOI:10.1037/xap0000027