Study: The high-rise means high risk when making professional decisions

By AT editor - 17 April 2018 at 2:58 am
Study: The high-rise means high risk when making professional decisions

The high rise can mean high risks when making professional decisions, according to an intriguing new study set for publication in the Journal of Consumer Psychology.

A team of U.S. researchers conducted experiments to measure the impact of elevation – commonly found in the high-rises of Nairobi, Cape Town, Cairo and cities around the globe – on objectivity when making key decisions.

“When you increase elevation, there is a subconscious effect on the sense of power,” says lead author Sina Esteky, an assistant professor of marketing in the business school at Miami University. “This heightened feeling of power results in more risk-seeking behavior.”

In the pilot study, the researchers analyzed data from more than 3,000 hedge funds throughout the world that accounted for assets over $500 billion. They correlated the level of volatility of the fund with the floor level of the firm, which ranged from the first to the 96th floor. The researchers found a slight but significant correlation between increased elevation and the volatility of the fund.

Esteky’s team also conducted experiments in which participants were asked to make a betting decision as they were in the glass elevator of a tall building. The participants who were going up to the 72nd floor were more likely to opt for the risky lottery that could result in either a small or significant win. Those who were descending preferred the conservative lottery with lower risk but modest wins.

In another experiment, participants were either on the ground floor or third floor of a university building, and they were asked to make 10 decisions with differing levels of risk and payoff. Again, the researchers found that participants on the third floor more frequently chose risky options than their ground floor counterparts.

Although this study was limited to financial decisions, further studies could show whether the subconscious effect of elevation influences other professionals like doctors who are choosing treatment plans for patients, Esteky says.

The elevation effect disappeared when participants were informed that floor level influences behavior, and it also disappeared when people could not see that they were on a higher floor level.

“The important lesson is that when people become aware of the potential impact of elevation, it doesn’t happen anymore,” Esteky says. “The brain is very susceptive to subtle situational factors, but also really good at correcting for such effects, so awareness can help us be more rational in our decisions.”

Image: Ethiopian News Agency file

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