Today, I wrote a new “fear column” for Aalto EE’s Profile, and realized I probably hadn’t posted my previous one so here it is.
Fear is a survival mechanism. Fear keeps us alert, on our toes. And it’s primal. According to neuroscientific research, the neural circuitry underlying fear is highly conserved in mammalian species, from rats to humans. In other words, fear mechanisms and systems are so fundamental that they’ve been carried over through the biggest of changes, the many, many slow changes that have made us us: the evolution.
At the same time, change is life itself. Evolution is what takes us forward, and in a way, it’s what makes life worth living. Because change means welcoming the unknown, a potential danger, it’s natural that we’re afraid.
Yet, it seems possible for us to be unafraid, or stay unaware of change if it’s very big. Nobody’s worried about evolution. Not enough people worry about climate change. We worry about changes we can see, and we get scared when we stand at the door, just before we take the plunge.
Maybe we have to change “change” a little. Maybe it’s a fear of taking a chance that makes us stop. Taking a risk is by definition dangerous. Really. The dictionary defines “risk” as “a situation involving exposure to danger.”
All decisions include a level of uncertainty of the true probabilities of the alternatives, and we react to that in different ways.
People who have a high risk aversion, as it’s called in financial theory, are shy to take any chances, preferring the status quo. Given a choice between getting 40 euro and getting a chance to win a hundred euro in a coin toss, they’ll take the guaranteed money.
Of course, some people thrive on risk. Risk takers are admired, as we look up to their clinical take on decision-making. They’ll place bets, they’ll climb mountains, and they’ll get up and talk to the best-looking woman or man in the bar. But while we might like to think that risk taking is simple math, it’s not.
In a Stanford university study, 19 doctoral students were asked to choose stocks ten times in 20 separate games, and identify the good and the bad stocks simply by watching the market. During the experiment, the researchers looked at how two parts of the brain got activated. The kicker: both are linked to emotion.
The nucleus accumbens area gets activated when someone expects a reward of a primary nature. A hungry person getting food. It is an area rich in the dopamine – associated with “wanting”.
The other part is the anterior insula which is linked to anxiety and lights up when a person sees disgusting, repulsive stimuli or anticipates physical pain.
The nucleus accumbens kicked into action two seconds before subjects made a “risk-seeking” choice, investing in a stock even if it had a bad history. The anterior insula was activated just before they made a “risk-averse” decision.
It may not be a feeling in the gut, and it may take place in the brain, but handling risk comes down to emotion.
When the nucleus accumbens is already activated, people tend to be more risk seeking. So, if a person sees a piece of chocolate cake that stimulates it, she may be more likely to engage in risk-seeking behavior on her next phone call. In other words, to make truly educated and intelligent decisions, you may want to sleep on it.
And not only if you’re unsure. According to a study published in Decision Sciences journal, “subjects who are led to believe they are very competent at decision-making see more opportunities in a risky choice and take more risks”.
Life is a game of risk, from picking stocks, to crossing a busy street, to eating exotic food, to sky diving, even to choosing your life partner. In the words of an ABBA song:
Ba ba ba ba baa, ba ba ba ba baa
Honey I’m still free
Take a chance on me
Gonna do my very best, baby can’t you see
Gotta put me to the test, take a chance on me
(Take a chance on me)
ABBA also had another song about the motivation that pushes us forward. “The winner takes it all.”