Anyone who's ever been in a corporate building knows that the CEOs always reside at the very top. It turns out, that's not just for symbolic purposes, or so they can enjoy the city skyline and purvey their kingdom. According to a new study published in the Journal of Consumer Psychology, people at higher elevations tend to make more financial risks because it actually make them feel more powerful.
For the study, researchers from the Society for Consumer Psychology analyzed the data of 3,000 hedge funds throughout the world that accounted for assets over $500 billion, and found a positive correlation between how many risks a person was willing to take and how high their office was in the building.
They then conducted an experiment in which participants were asked to make betting decisions while in a glass elevator going up and down a skyscraper, and found that those going up to the 72nd floor were more likely to gamble big then those going down to the lobby.
In the third experiment, researchers asked to make ten decisions on either the ground floor or the third floor, and found that those on the third floor were similarly more likely to make a riskier bet for the chance of a greater payoff. When asked to complete a series of unfinished words, participants on the third floor were also more likely to choose words associated with power than those on the ground floor.
A fourth experiment also found that people were more likely to try an exotic, unfamiliar fruit when on the upper levels of a building than on the lower ones.
All of the experiments led the researchers to draw one final conclusion.
"When you increase elevation, there is a subconscious effect on the sense of power," lead author Sina Esteky, Ph.D., an assistant professor of marketing in the business school at Miami University, said. "This heightened feeling of power results in more risk-seeking behavior."
These results don't just shed light on why so many big money-makers reside in the upper echelons of office buildings. It could have interesting implications for surgeons and politicians in evaluating how the elevation of their office affects their likelihood to make more impulsive decisions, not to mention make buying a penthouse loft an even more appealing prospect.
There's a catch to all this, however. According to Esteky, the association between elevation and power has to be subconscious to have the full effect on your psyche.
"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."
That might be good to keep in mind, since risky business doesn't always pay off. After all, that's why Warren Buffett doesn't believe in Bitcoin and believes it's crucial to do your research before making any investment.
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