Abstract

The current investigation explores how power and stability within a social hierarchy interact to affect risk taking. Building on a diverse, interdisciplinary body of research, including work on non-human primates, intergroup status, and childhood social hierarchies, we predicted that the unstable powerful and the stable powerless will be more risk taking than the stable powerful and unstable powerless. Across four studies, the unstable powerful and the stable powerless preferred probabilistic over certain outcomes and engaged in more risky behaviors in an organizational decision-making scenario, a blackjack game, and a balloon-pumping task than did the the stable powerful and the unstable powerless. These effects appeared to be the result of the increased stress that accompanied states of unstable power and stable powerlessness: these states produced more physiological arousal, a direct manipulation of stress led to greater risk taking, and stress tolerance moderated the interaction between power and stability on risk taking. These results have important implications for the way social scientists conceptualize the psychology of power and offer a theoretical framework for understanding factors that lead to risk taking in organizations.

Citation

Jordan, J., Adam Galinsky, and N. Sivanathan. "Something to lose and nothing to gain: The role of stress in the interactive effect of power and stability on risk taking." Administrative Science Quarterly 56 (2011): 530-558.

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