How hunger affects our financial risk taking

Now, for the first time, Mkael Symmonds and colleagues have shown that our animal instinct to maintain a balanced metabolic state influences our decision-making in other contexts, including finance.

Nineteen male participants performed the same gambling task on three occasions, a week apart: either after a fourteen hour fast; immediately after eating a standard two-thousand calorie meal; or one hour after eating a two-thousand calorie meal. The task simply required participants to choose repeatedly between pairs of gambles, one of which was always riskier but more lucrative than the other.

The immediate effect of the meal was to neutralise risk aversion. For the men with more adipose tissue and higher baseline levels of leptin (a hormone that suppresses appetite), who are generally more risk averse, this meant they became less risk averse when performing the task right after eating. By contrast, for men with less adipose tissue and lower leptin levels, who are generally low risk averse, their risk aversion was increased immediately after eating, just as you'd expect based on the behaviour of hungry animals.

An hour after eating gives time for hormonal effects to kick in. As expected, men who reported feeling less hungry an hour after eating, and whose levels of acyl-ghrelin (a hormone that increases appetite) in the blood stream had fallen, played the gambling game in more cautious fashion. 'This parallels findings in foraging animals,' Symmonds told the Digest, 'where changes in metabolic state promote changes in behaviour to maintain or reach a metabolic benchmark (to take more risk if intake rate is relatively low, and less risk if intake is relatively high), but here we see the effect in the economic domain.'

The researchers said their findings have implications for understanding the behaviour of dieters, the obese and people with eating disorders. 'Prandial ghrelin suppression is reduced in obesity,' Symmonds and his co-authors wrote. 'Thus we predict greater risk-seeking in obese individuals following feeding, augmented by larger immediate post-prandial effects on risk taking due to higher baseline adiposity. This mechanism may underpin a component of the aberrant decision-making seen in obese individuals, including impulsivity and reward-seeking behaviour. We also predict profound effects on decision-making for individuals operating at very low baseline energy reserves [i.e. dieters and people with eating disorders]'

Further reading

Symmonds, M., Emmanuel, J., Drew, M., Batterham, R., & Dolan, R. (2010). Metabolic State Alters Economic Decision Making under Risk in Humans. PLoS ONE, 5 (6) DOI: 10.1371/journal.pone.0011090