How hunger affects our financial risk taking!!!

Original source: SimoleonSense.com .

Introduction (Via BPS Research)

The hungrier an animal becomes, the more risks it’s prepared to take in the search for food. Now, for the first time, Mkael Symmonds and colleagues have shown that our animal instinct to maintain a balanced metabolic state influences our decision-making in other contexts, including finance.

Nineteen male participants performed the same gambling task on three occasions, a week apart: either after a fourteen hour fast; immediately after eating a standard two-thousand calorie meal; or one hour after eating a two-thousand calorie meal. The task simply required participants to choose repeatedly between pairs of gambles, one of which was always riskier but more lucrative than the other.

The immediate effect of the meal was to neutralise risk aversion. For the men with more adipose tissue and higher baseline levels of leptin (a hormone that suppresses appetite), who are generally more risk averse, this meant they became less risk averse when performing the task right after eating. By contrast, for men with less adipose tissue and lower leptin levels, who are generally low risk averse, their risk aversion was increased immediately after eating, just as you’d expect based on the behaviour of hungry animals.

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