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J.C. Penney Gets Increase in Line of Credit from $1.75 Billion to $2.25 Billion

Risk Is In The Brain of The Beholder

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Published: Monday, 10 Oct 2011 | 9:56 AM ET
By: Jeffrey Weiss, |Special to CNBC.com

Roy Baumeister is a psychology professor at Florida State University and the co-author of the new “Willpower: Rediscovering the Greatest Human Strength.” For Baumeister, willpower is to intelligence as the transmission is to a car’s engine: Without willpower, thinking can happen but can’t get anywhere.

Baumeister thinks the supply of willpower in the brain is as real as rocks, can be temporarily used up, and can be increased through practice, the way exercise makes muscles stronger. (Longtime fans of the superhero Green Lantern will understand exactly how Baumeister defines willpower.)

Taking a risk requires the willpower needed to force that first step. So even a temporary lack of willpower can affect our ability to take a successful risk, Baumeister says.

Risk & You - See Complete Coverage

“In a recent study on trust that we have done, people whose willpower was depleted from a previous, irrelevant task rated it riskier than other people to trust someone,” he says. “In that sense, it takes willpower to take the risk of trusting a stranger.”

Baumeister describes Jessica Alquist as “one of my smartest PhD students.” She offers an interesting speculation about how draining one’s willpower battery would affect people differently, depending on how they already feel about risk: “I'd predict that people who are

risk-averse normally use self-control to push themselves to take little risks and people who are risk-seeking use self-control to curb their risk-taking,” she says.

“When depleted, I'd predict that risk-averse people would tend to pass up on very good odds and risk-seeking people would be willing to accept very bad odds.”

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Scientists have discovered neural pathways that seem to correlate with the kinds of people who deal well with financial risk, but even the very definition of risk gets pulled apart by experts.

   
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