Risk Taking

Risk Taking Definition

When people take risks, they engage in behaviors that could lead to negative consequences such as physical injury, social rejection, legal troubles, or financial losses. Behaviors that are more likely to lead to such outcomes are considered riskier than behaviors that are less likely to lead to such outcomes. Regardless of the degree of risk involved, however, behaviors of any type can lead to both positive and negative consequences.

People who take risks think about consequences in one of two ways. The first way involves an awareness that a behavior such as gambling could lead to both positive and negative consequences (e.g., their winnings could increase further or they could lose all of their money), but people engage in the behavior anyway because they assume that the positive consequences are more likely than the negative consequences. In contrast, people who think about consequences in the second way do not seem to consider both positive and negative consequences at the time when they are thinking about engaging in the behavior. Instead, they only seem to consider the possible positive consequences. If they had considered the negative consequences as well, they might not have taken the risk.

Major Issues in Risk-Taking Research

Risk TakingResearchers from a wide range of disciplines have been interested in risk taking for a variety of reasons. Economists and other financial experts, for example, have considered the implications of philosophical, mathematical, and psychological analyses of risk taking for making wise investment decisions. Given that nearly all financial decisions carry some degree of risk, the focus is not on how one can avoid taking risks. Rather, the focus is on how one can maximize financial gains while minimizing financial losses.

Cognitive psychologists, in contrast, have been less interested in financial decisions and more interested in the ways in which the human mind copes with all the information and possibilities that may be present in a risk-taking situation. People cannot consider all the possible positive and negative consequences of their choices because doing so would require much more memory ability and processing capacity than the human mind possesses. Instead, they simplify the task for themselves by only considering certain kinds of information, narrowing down their options to one or two, and relying on rules of thumb that are usually (but not always) useful guides to selection. Whereas many scholars (especially evolutionary psychologists) now argue that such strategies are highly adaptive and usually inconsequential, others have shown in experiments how simplifying tendencies can lead to systematic decision errors and inconsistent choices across similar situations.

For example, when presented with hypothetical health policy choices, people make different choices depending on how the information is “framed.” In one study, one group of participants was willing to implement a risky health policy involving a vaccination plan when they were told only that the vaccination would likely “save the lives of 600 people” in a particular town (population = 1,000). A second group, in contrast, was unwilling to implement the policy when they were only told that “400 people might die” if the plan were implemented. Thus, people made different choices even though the choices were formally identical. People presented with the first frame failed to realize that although 600 would be saved, 400 would not be. People presented with the second frame failed to draw the opposite inference.

Although studies of framing and other effects have been of interest to social psychologists as well, other issues currently predominate in the social psychological literature on risk taking. The goal of most studies is to identify the psychological factors that seem to predict who is likely to engage in unhealthy behaviors such as unprotected sex, reckless driving, or cigarette smoking. Some researchers argue that people engage in these unhealthy behaviors because the long-term, negative consequences of these behaviors are outweighed in their minds by the short-term, positive consequences that they produce.

Risk taking is particularly likely when the short-term positive consequences include reductions in both negative emotion and high self-awareness, combined with increases in physical pleasure or arousal. That is, people are drawn to risks that promise a quick positive outcome that will feel good, be exciting, help them forget themselves, and get rid of unpleasant emotions. Experimental procedures that increase negative emotion or self-awareness (e.g., leading people to believe they will never form close relationships; reminding them that they will die someday) increase tendencies toward risk taking. Further work has shown that risk-taking is more likely when (a) factors such as stress or alcohol decrease the number of consequences considered, (b) the risky behaviors serve a variety of goals and needs (e.g., need for intimacy; self-esteem), and (c) people have favorable stereotypes about the kind of person who engages in the behavior, believe that most people engage in the behavior, and their friends would approve of their engaging in the behavior.

Developmental (child) psychology often builds on scholarship in the fields of cognitive and social psychology. Developmental psychologists have given many of the same tasks and measures used by cognitive and social psychologists to children in an effort to document developmental increases or decreases in risk-taking tendencies. Although adolescents are more likely to engage in certain kinds of risky behaviors than are preadolescents and children (e.g., smoking, binge drinking, unprotected sex), age differences have not been found on a variety of other risk-taking measures. Hence, there does not appear to be a global increase in risk taking with age because age differences vary by topic. Similarly, there does not appear to be a general tendency for males to take more risks than females do. Although some studies have found that males engage in certain risky behaviors more than females (e.g., reckless driving), other studies have either found no gender differences or found that females engaged in certain risky behaviors more than males (e.g., females in their 20s smoke more than males in their 20s).

Hence, financial scholars and scholars in various subfields of psychology have had somewhat divergent interests. Nevertheless, several findings and issues have been of interest to scholars in all these disciplines. One issue pertains to the question of whether a person who engages in one kind of risky behavior (e.g., smoking) is also likely to engage in other kinds as well (e.g., binge drinking, reckless driving). Again, the findings seem to show that the degree of consistency depends on which behaviors are presented to participants in studies. Certain kinds of risky behaviors do tend to cluster together (e.g., smoking and binge drinking in teens), but other kinds do not (e.g., trying out for a sport and smoking). Whenever larger lists of risky behaviors are presented to participants, less consistency in the tendency to take risks emerges.

The second issue of interest to scholars in multiple disciplines pertains to the relation between risk taking and rationality. In classical terms, rational people are people who behave in ways that are consistent with their beliefs and values. To illustrate, people who drive recklessly with their children in their cars can be said to behave irrationally if they (a) believe that driving recklessly could lead to the injury or death of any passengers in their cars and (b) consider it very important to protect their children. Similarly, the act of smoking cigarettes is irrational for any person who believes that smoking causes premature death and considers it important to live a long and healthy life.

Several studies of risk taking have shown that adolescents and adults can deviate from the classical norms of rationality. Scholars have reacted to such deviations in one of two ways. Some have argued that the classical criteria for rational behavior need to be discarded in favor of other criteria. In other words, there is nothing wrong with the human mind; there is something wrong with the definition of rationality. These scholars suggest that millions of years of evolution could not have produced a mind that is designed for self-destruction. Other scholars, in contrast, have accepted the classical criteria and sought to determine the psychological and contextual factors that cause people to sometimes behave irrationally. As noted previously, for example, social psychologists have appealed to constructs such as negative emotion, self-awareness, social exclusion, lack of self-regulation, and positive views of risk-takers to explain irrational risky behavior. Developmental psychologists have also appealed to lack of self-regulation, but have added an emphasis on other factors such as impulsivity and sensation-seeking as well. In contrast, cognitive psychologists have focused on various cognitive processes that keep people from attending to, or recalling, the right kinds of information.

The issue of rationality also arises in legal settings. When adults or adolescents engage in criminal behaviors, the question arises whether they should be held accountable for their behavior. Are their beliefs in accord with reality? Do they value their own lives or the lives of others? Did psychological factors such as extreme emotion or uncontrollable impulsivity cause them to behave irrationally? If so, should they be held accountable for not controlling their emotions or impulses?


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