ORGANIZATIONAL

BEHAVIOR

AND HUMAN

DECISION

PROCESSES

39, 14.5-154 (1987)

The influence of Positive Affect on Acceptable Level of Risk:

The Person with a Large Canoe Has a Large Worry
ALICE M. ISEN
University of Maryland, Baltimore County
AND

NEHEMIA GEVA
Tel Aviv University
A study investigated the influence of positive affect, induced by receipt of a
small bag of candy, on risk preference and on thoughts about losing. Results
indicated, compatibly with previous findings, an interaction between affect
and level of risk: Where stakes were high, persons in whom positive affect had
been induced, in comparison with those in a control group, set a higher level
of probability of winning as the minimum necessary for taking the bet. Where
stakes were low, persons in the positive-affect condition tended to be more
risk prone (to set a lower probability level) than control subjects. Results of a
thought-listing task paralleled those of the risk measure, indicating an interaction between affect condition and risk level, such that persons in the positiveaffect condition contemplating a high-stakes bet, but not those considering a
low-stakes bet, reported more thoughts about losing than control subjects.
0 1987 Academic

Press. Inc.

Recent studies have suggested that positive affect tends to increase a

persons inclination to take a small risk but to decrease the tendency
toward risk taking where risk is high, and meaningful loss is possible (Isen
& Patrick, 1983; Isen, Pratkanis, Slavic, & Slavic, 1984). For example, in
one study subjects who had received a free coupon placed larger bets on
a low-risk gamble in a game of roulette (83% chance of winning, 17%
This study was conducted while the authors were visiting at the Ohio State University.
The authors thank the Department of Psychology of the Ohio State University for its hospitality, and Elizabeth Mertz and Gregory Robinson for their excellent work as experimenters
in this study. This work was supported in part by Research Grant BNS 8406352 from the
National Science Foundation to the first author. The subtitle was adapted from an old native
American saying. Requests for reprints may be sent to Alice M. Isen, Department of Psychology, University of Maryland, Catonsville, MD 21228.
r Here, we are using the term risk in the common usage sense (chance of injury or loss;
Websters New World Dictionary of the American Language, 1980, p. 1228), rather than in
the technical sense (variability).
145
0749-5978187$3.00
Copyright
0 1987 by Academic Press. Inc.
All riehts of rearoduction
in any form reserved.

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ISEN AND GEVA

chance of losing) than did a control group, but bet less than persons in the
control group on a high-risk bet (17% chance of winning, 83% chance of
losing). Recently, another series of studies has found that, despite the
counterintuitiveness of this hypothesis, persons in whom positive affect
had been induced, relative to a control group, preferred a small bet ($1) to
a larger bet ($10) in a lottery, where the chance of winning was 50% (Isen
er al., 1984).

These findings have been interpreted as reflecting a tendency in

persons who are feeling good to protect the ongoing positive affective
state. This interpretation is compatible with the results of other studies
investigating the impact of positive feelings on behaviors other than risk
taking. For example, Isen and Simmonds (1978) found that subjects in a
positive affective state refrained from helping when the helping behavior
was likely to dispel their good feeling, although they tended to be more
helpful than control subjects when the required help posed no such
threat. Similarly, Mischel, Ebbesen, and Zeiss (1973, 1976) found that
persons who had experienced success, to a greater extent than those in a
control group, preferred to look at, and had better memory for, positive,
rather than negative, self-relevant information.
Another way to view these findings is in terms of utility or value functions. Subjective expected utility (SEU) theory (Edwards, 1961) holds
that the utility of a gamble is equal to the probability of Outcome 1 (winning) multiplied by the utility of that outcome (winning), plus the probability of the alternative outcome (losing) multiplied by the utility (in this
case, a negative utility) of that outcome (losing). Thus, in SEU terms,
because positive affect tends to promote risk aversion in situations where
loss is possible, it can be thought of as increasing the disutility (negative
utility) of a loss relative to the utility of a gain. That is, under conditions
of positive affect, an anticipated gain may not be as pleasant as it normally is, and/or a possible loss may seem more unpleasant than it normally does. To an extent, this is a restatement of the idea that a person
tries to maintain a positive affective state; but it focuses emphasis on the
process underlying the affect-maintenance motive.
In terms of SEU theory, it is possible that the influence of positive
affect on risk preference results from an impact of affect on probability
estimation rather than, or in addition to, one on utility estimation. Results of recent studies indicate, in fact, that positive affect can influence
the perceived probability of positive and negative events (e.g., Johnson &
Tversky, 1983; Nygren & Isen, 1985). However, these studies have
shown that positive affect tends to reduce the subjective probability of
negative events occurring. Thus, the relative risk aversion observed
among positive-affect subjects considering situations where meaningful
loss is likely cannot be explained solely in terms of any influence of affect
on probability estimation. The observed effect would seem to have to

AFFECT

AND RISK PREFERENCE

147

involve a change, in the opposite direction, in estimated utility of the

possible loss. Such an effect would be compatible with the hypothesis
that a person in a positive affect state becomes motivated to maintain that
state.
In the present study, we examine a proposition derived from the idea
that affect gives rise to a tendency to maintain the pleasant positive state
and influences the perceived utility of losses. That proposition is that a
person in a positive state who is deciding about a gamble in which a substantial loss is possible will think more about the possible loss than will a
person in a control condition. In contrast, where loss is not likely, or is
inconsequential, a happy person will be less likely to focus on loss.
In addition, this paper examines whether another method of assessing
risk preference will support the proposition that positive affect can make
people risk averse where the stakes are high. It has recently been pointed
out that seemingly minor changes in procedure can affect risk preference
and other types of decision making (e.g., Einhorn & Hogarth, 1981;
Payne, 1982; Tversky & Kahneman, 1981). Thus, it is important to extend the range of risk-assessment methods used in investigating the impact of affect on risk preference.
To date in studies of the influence of positive affect on risk preference,
risk preference has been measured in terms of amount bet (Isen & Patrick, 1983) or preference for a small, as contrasted with a large, bet (Isen
et al., 1984). In the present study risk preference is assessed in terms of
the probability level that subjects are willing to accept for bets of fixed
amounts. We expected a conceptual replication of the findings of Isen
and Patrick (1983), that persons in whom positive affect had been induced
would show risk aversion relative to a control group (i.e., a tendency to
set a higher required probability of winning, relative to a control group),
where the amount to be bet was moderate to high.
The following design was used to address these questions. The study
manipulated three levels of risk, in this case represented by stakes-low,
medium, and high-by
determining for the subjects the proportion of
their resources to be bet (10 out of 10 chips, 5 out of 10, or 1 out of 10).
The risk level (amount to be bet) was crossed with an affect manipulation
which had been found to be successful in previous studies, a gift of
candy. Risk preference was assessed by asking subjects to indicate the
probability level of the riskiest bet they were willing to make in a game of
roulette. In order to obtain additional information regarding the focus of
subjects attention while making the decision, subjects were asked to list
the thoughts they had had while deciding.
METHOD

Subjects
Subjects were 71 male and female college students in introductory psy-

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ISEN AND GEVA

chology who participated as part of a course requirement. There were

roughly equal proportions of males and females in each condition.
Procedure

Groups of two to six subjects were randomly assigned to one of the six
conditions of the experiment.
A#ect manipulation.
Before the experimenter began, subjects in the
positive affect conditions were given a bag of candies (15 assorted pieces
of wrapped, hard candy, in a sandwich bag decorated with cartoon
figures (a Glad Funtime Sandwich Bag), and tied with a brightly colored piece of yarn). The experimenter explained that the bag of candy
was a token of appreciation for participation in the experiment that they
were receiving in addition to their hours credit. Subjects in the control
conditions were not given the gift.
Risk manipulation.
The experimenter announced that the subjects
would be involved in a game of roulette. Subjects were given 10 poker
chips and were told that these 10 chips represented their credit for participation in the study. They were then told that they would have the opportunity to wager these chips (their credit for participating) in the game of
roulette. This was done, as in the previous research (Isen & Patrick,
1983), in order to create a situation where subjects would be risking
something actually of value to themselves, rather than deciding about
hypothetical resources. At the same time this technique allowed us to
avoid problems that might result from subjects having received money or
anything else unexpected from the experimenter, which might itself have
functioned as an affect manipulation. Subjects were read the following
instructions:
You are going to be involved in a game of roulette. The 10 chips in front of you
represent your credit for participation in the study. You are going to have a chance
to gamble these chips. You can win more chips, in which case youll have your
choice of prize as well as your credit for participation, or you may lose all or part
of the original 10 chips, in which case you wont get a full hours credit for participating in this experiment. You must have 10 chips in order to receive full credit for
this study. On the other hand, the more chips you have, over 10, the better the
prize you can win. If you do not want to gamble, of course, you dont have to. You
can play it safe and not risk your credit. Its up to you.

The experimenter then explained the game of roulette, and the betting
system, to the subjects. The following instructions (in which the risk level
was manipulated) were read:
Before the experiment, I placed all of the possible numbers of chips that can be bet
(I-10) into a box and randomly picked one. That is, I have already chosen how
much you can bet, if you choose to bet; but its up to you what kind of bet you
make. In your case your bet will be 10 chips (for the high-risk conditions, 5 in the

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AFFECT AND RISK PREFERENCE

medium-risk conditions, and I in the low-risk conditions). Now the question is
what kind of a bet you are willing to bet on.

The experimenter then explained the types of bet (numbers, colors,

columns, and rows) and the risk levels associated with these bets. A
chart and a miniature roulette tabletop were used in order to present the
probabilities associated with the various bets. After the explanation of
the probabilities associated with the different bets, the subjects were instructed to indicate on a scale ranging from 0.00 to 1.00, and marked at
intervals of 0.10, the riskiest bet that they were willing to take (that is,
what the probability of winning would have to be in order for them to
bet).
As soon as subjects had performed this task, they were asked to
record, on a separate page, all of the thoughts related to the situation that
they had had while deciding on their risk preference. Subjects were given
4 min to perform this task.
When this task was completed, the experimental session ended. (The
wheel was not spun, and thus subjects could neither win nor lose points.)
Subjects were given a full debriefing, and, of course, all received full
credit for participating in the study.
RESULTS

Risk Preference
Table 1 presents the mean probability level chosen in each condition.
(There was no effect due to gender, and therefore all analyses presented
were carried out on the data of the males and females combined.) These
data were subjected to a two-way analysis of variance with Affective
State (positive vs neutral) and Level of Risk (low, medium, high) the
factors.
TABLE 1
MEANPROBABILITYLEVELCHOSEN,ASAFUNCTIONOFAFFECTIVESTATEAND
LEVEL OFRISK~
Affective state
Positive
Levels of risk:
M

SD
n

Low

Neutral

Med

High

Low

Med

0.53

0.65

0.59
(0.14)
12

0.52

(0.18)
11

0.68
(0.25)

0.52

(0.W
13

(0.15)

(0.W
11

11

13

High

* Standard deviations in parentheses. Because of unequal variance in the cells, the data
were transformed (square root transformation) and an analysis performed on the resulting
transformed data. The nontransformed data are presented here for clarity.

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ISEN AND GEVA

The significant effects revealed by this analysis were a main effect of

affect, F(1,65) = 4.20, p < .05 (indicating that subjects in a positive state
tended to be more risk averse than control subjects), and the predicted
interaction between affect and Level of Risk, F(2,65) = 3.62, p < .04.
Planned comparisons revealed that subjects in the positive-affect condition set a higher minimum probability level (M = 0.68) than did control
subjects (M = 0.52) on the high-risk bet, where 10 chips were at stake,
t(22) = 2.10, p < .05 (one tailed), and on the moderate-risk bet, where 5
chips were at stake (0.65 vs 0.52 for affect and control, respectively),
t(22) = 1.90, p < .05 (one tailed). However, where risk was low (only 1
chip at stake), there was a tendency, of borderline significance, in the
opposite direction, for positive-affect subjects to set a lower minimum
probability level (M = 0.53) than subjects in the control group (M =
0.59), t(23) = 1.47, p < .l (one tailed). Stated in another way, the significant interaction between affect and level of risk indicates that mildly
elated subjects tended to be more risk averse than neutral subjects when
the risk was moderate or high, but not when the risk was low. In fact,
under that circumstance, there was a tendency, in the opposite direction,
for persons in the positive-affect condition to be more risk prone.
Thought Listing

Two independent judges who were not aware of the experimental condition of a particular subject while rating his/her protocol assessed the
number of thoughts related to losing, and the total number of thoughts in
each protocol. There was no disagreement between the two raters on
these judgments. Mean number of thoughts about losing, corrected for
total number of thoughts listed, were subjected to a 3 x 2 analysis of
variance (Level of risk x Affective state). These data are presented as
mean percentages of thoughts about losing, by condition, in Table 2.
(Again, because the males and females did not differ on this measure,
their combined data are presented and analyzed.)
TABLE 2
MEANNUMBEROFTHOUGHTSABOUTLOSS(CORRECTEDFORTOTALN~TMBEROF
THOUGHTSLISTED),ASAFUNCTIONOFAFFECTIVESTATEANDLEVEL
OFRISK"
Affective state
Neutral

Positive
Levels of risk:

Low

Med

High

Low

Med

High

M
SD
n

0.06
(0.11)
13

0.20
(0.32)
11

0.24
(0.34)
11

0.20
(0.21)
12

0.05
(0.13)
13

0.12
(0.18)
11

D Standard deviations in parentheses. Analysis on transformed scores (arcsin transformation) yielded parallel results. The original percentages are presented here for clarity.

AFFECT

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151

The analysis revealed only an interaction between affect and level of

risk, F(2,65) = 4.65, p < .02, paralleling the results found for risk preference. Since the moderate- and high-risk situations produced similar results on the risk measure, these two conditions were combined for the
specific contrasts investigating the obtained interaction on the thoughtlisting measure. Planned comparisons indicated that in the moderate- to
high-risk situations, persons in the positive-affect conditions reported a
higher percentage of thoughts about losing (22%) than did control subjects (8%), t(44) = 2.16, p < .05; but in the low-risk situation, they reported a significantly~ smaller percentage of thoughts about losing than
control subjects (6% vs 20%), t(23) = 2.06, p < .05. Moreover, in the
positive-affect condition, but not in the control condition, those considering a more substantial loss had significantly more thoughts about losing
than those considering a smaller loss, t(33) = 2.26; p = .03.
DISCUSSION
The results of this study indicate that positive affect tends to make
people cautious where risk (in this case the stake) is moderate to high,
but relatively risky where the potential loss is low. In this, these results
are compatible with the growing body of literature suggesting that happiness can lead to relative risk aversion under some circumstances (Isen &
Patrick, 1983; Isen e? al., 1984; Nygren & Isen, 1985). They are also similar to the results of the study by Isen and Patrick, which found positive
affect to be associated with risk aversion or cautiousness in a high-risk
situation, but with risk seeking in a low-risk situation. This study extends
the previous findings by demonstrating that the same effect holds when
risk preference is measured in a different way (acceptable probability
level instead of amount to be bet), and when risk level is represented by
the amount at stake rather than the probability level associated with the
gamble. Moreover, this study employed a slightly different method of affect induction, a gift of a small bag of candy rather than a coupon.
Results of the thought-listing measure suggest that persons in a positive
state who are considering a moderate to high risk tend more than control
subjects to think about the possible loss, despite the fact that they tend
less than control subjects to think about potential loss where the stake is
low. This finding parallels results of the risk measure itself, suggesting
that perhaps focus on loss or avoidance of loss plays a role in the process
underlying the association between happiness and risk aversion. Because
these results are compatible with the affect-maintenance interpretation of
the risk-averse preferences of positive-affect subjects, and because they
imply an influence of affect on perceived utility of losses, they suggest
that studies of the influence of affect on the perceived utility of gains and
losses would be of value.
At first, it may seem surprising that positive affect should lead to in-

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ISEN AND GEVA

creased focus on the possible losses in a situation. Surprising, because

the existing literature on the influence of positive affect on cognitive processes and behavior demonstrates effects that would suggest the opposite. For example, studies of the influence of positive affect on memory
find that positive affect tends to increase the accessibility of positive material in memory (e.g., Isen, Shalker, Clark, & Karp, 1978). This suggests
that persons who are happy might be more likely to think about positive
possibilities (and behave accordingly). The thought-listing results obtained in the present study, thus, contrast with what might be expected
on the basis of the findings regarding the influence of affect on memory.
We propose that this may occur because of the context, one of risk and
potential real loss. It should be noted that this effect (increase in thoughts
about loss) has been observed only for relatively high risk. Moreover, it
has been obtained primarily in situations involving realistic gambling decisions. We suggest that this situation of risky decision making, where
stakes are real and at least moderately high, may play a role in cuing fear
of potential loss. In the memory studies there is no particular contextual
factor influencing the priming of cognitions other than the affect induction; in the gambling situation, the genuine, immediate risk may also constitute a context and influence the type of thoughts that come to mind.
Thus, the affect induction in the context of this specific situation may
promote a focus on losing or a concern about losing, especially if, as we
think likely, it gives rise to a motivation to maintain the positive feelings
(alters the utility of losing).
Moreover, these results are compatible with others in the area of
helping and self-evaluation, which also suggest a sensitivity on the part of
happy persons to possible loss of positive affect (e.g., Isen & Simmonds,
1978; Mischel et al., 1973, 1976). Thus, the finding of a greater preponderance of thoughts about loss, among persons in whom positive affect
has been induced and who are contemplating the possibility of a meaningful loss, may suggest that, more generally, happiness may sensitize
persons to any genuinely possible or likely loss. Thus, it helps to support
the mood maintenance interpretation of the risk findings as well as those
in the helping and self-evaluation areas; and it suggests that positive affect may alter the perceived utility (the anticipated negative impact) of
loss, making potential losses seem more aversive.
All of these findings suggest that people who are feeling happy may
behave conservatively (possibly because they are concerned with preserving their happy feelings). Another way to view this state of affairs is
to say that people who have gained something or who have something to
lose may behave conservatively; and this formulation leads to several
interesting points. First, it renders this set of results compatible with
prospect theory and findings that peopIe who have already gained re-

AFFECT

AND RISK PREFERENCE

153

sources, or who are considering possible gains, tend to be risk averse

(Kahneman & Tversky, 1979). Second, viewed in this way, the results
indicating a link between positive affect and risk aversion extend the economic findings by showing that not only tangible resources, but also affective resources, can lead to conservatism or cautiousness. Thus, the
present results, together with other similar findings, may suggest that affective resources can in some instances function like, or perhaps substitute for, tangible resources.
This possibility of a relationship or interaction between affect and tangible resources in consideration of economic matters may, by extension,
have relevance for many settings and many aspects of behavior. It suggests that positive affect may influence types of economic decisions besides risk preference, and that it may influence, independent of objective
economic considerations, subjective feelings of wealth, poverty, wellbeing, or need. These, in turn, are important factors in a wide range of
human experiences, with implications for clinical phenomena, interpersonal and social interaction, and child development.
Still, it should be noted that the findings relating affect and risk aversion thus far do not speak directly to the mood maintenance interpretation of reactions to risk, nor to the relationship between affect and tangible resources. Other studies designed to investigate these possibilities
would be helpful. For example, in order to test the affect-maintenance
interpretation more clearly in future research it might be advisable to
assess risk preference in situations that afford only the possibility of one
outcome, either winning or losing (that is, situations in which subjects
have the possibility of gaining or breaking even, and situations where
they can either lose or break even). Such a technique might shed light
more directly on the role of avoidance of loss (and loss of affective state)
in the impact of positive affect on risk preference.
Furthermore, these results suggest that more fine-grained analysis of
the impact of affect on cognitive processes is warranted. For example,
the influence that positive affect has been found to have on memory (facilitating access to positive material) would seem to contrast somewhat
with that which positive affect has been shown to have on risk preference
or on thoughts that come to mind while deciding about a risky choice
(increasing the tendency toward thoughts about losing and conservative
choices). It is possible that these two effects are due to independent effects of feelings on probability and utility estimation. Thus, studies investigating the impact of affect on probability and utility estimations, specifically, would be useful. Moreover, it would be interesting to determine,
more specifically, whether any impact on utility estimation is due to a
reduction in the value of a potential gain, or to an increase in the negative
utility of a potential loss, or both.

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RECEIVED: December 9, 1985