In a stressful situation, we are more likely to take risks

Usually, a person is more afraid of losing than they are happy to win. Losing a thousand rubles is psychologically harder than finding them. This effect is called loss aversion, and it’s built into our brains as a defense. But in a stressful situation, protection weakens.

“When I feel pressure, I try to postpone an important decision. Especially if it can lead to losses,” says the author of the study, Professor of psychology Grant Shields. His work, published in Psychoneuroendocrinology, proves that the higher the stress, the lower our fear of losing.

The study was simple but revealing. 147 volunteers were placed under controlled stress and allowed to make hypothetical financial decisions. It turned out that when stressed, people are more likely to choose risky options. They think less about the consequences and believe more in luck, even if the chances are few.

Interestingly, men and women reacted differently. Men were more likely to lose their caution and go all-in. Women, on the other hand, maintained a little more clarity — and predicted better how everything would end. But even they were not immune to perception distortions under pressure.

To more accurately measure exactly how stress affects choice, the team used a decision-making model called cumulative perspective theory. It takes into account four factors: risk appetite, fear of loss, distortion of probabilities, and randomness of choice. For example, why do we buy a lottery ticket, even though the chance of winning is negligible? Because stress and emotions reinforce our belief in successful exclusion.

So the next time you find yourself under pressure, take a break. Drink some water. Take a breath. Ask yourself about four factors. And remember: stress is a bad advisor, especially in financial matters.