Stress-related changes in financial risk taking: Considering joint effects of cortisol and affect

Many decisions under risk and uncertainty are made under physical or emotional stress. A recent meta-analysis suggested that stress reliably influences risk taking but did not find a relation between single measures of stress such as cortisol and risk taking. One reason for the conflicting findings could be that the influence of stress on risk taking depends not only on physiological but also on psychological stress responses, in particular affective valence. We tested this hypothesis in an exploratory empirical study: Seventy participants worked on a financial risk-taking task. In half of the participants acute stress was induced with a cold pressor task. For all participants we measured cortisol and α-amylase levels, blood pressure, subjective arousal, and affective valence before and after the task. The stress induction increased participants' levels of cortisol, subjective arousal, and systolic blood pressure but did not directly influence negative affect or risky decision making. Examining the interplay between physiological and psychological stress responses, a moderation analysis revealed an interaction between stress induction and affect valence: Negative affect predicted an increase in risk-seeking decision making in the stress condition, but not in the control group. A similar moderation was found with cortisol reactivity, that is, negative affect predicted an increase in risk-seeking decision making in participants with high cortisol reactivity but not in participants with low cortisol reactivity. These results suggest that the effect of stress on risky decision making depends on the interplay of affective valence and cortisol reactivity.