New research shows that elevation in an office building can increase someone’s willingness to take financial risks because it makes people feel more powerful.
In a series of experiments, researchers found that people at higher elevations in an office building were more willing to take financial risks. lead author Sina Esteky, PhD, an assistant professor of marketing in the business school at Miami University says “When you increase elevation, there is a subconscious effect on the sense of power,”. “This heighted feeling of power results in more risk-seeking behavior.”
In a 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 suggests that elevation of an office building may be one reason certain hedge fund managers are willing to invest in risky assets such as Bitcoin, a cryptocurrency and worldwide payment system that is highly volatile. 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. In another experiment, he discovered that people were more open to taking a sensory risk by trying an unfamiliar fruit when they were at a higher elevation in a building.
“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.”
Source: Journal of Consumer Psychology