Tuesday, February 11, 2014

Risk Taking

Encountering uncertainty and managing risk is as fundamental as life itself. After all, aside from birth and death, little about life is certain. Understanding uncertainty and risk is relevant in various fields from study, from psychological counseling to investment undertaking. In an engineering context, it is important to understand the psychology behind decision making that affects the processes of capital projects, and their outcome as the projects come to fruition and enter usage.

It turns out that risk-seeking is somewhat hardwired in the brain. The neurological structure controls the actions of humans. Within the brain, the region of particular interest is the amygdala. Located within the temporal lobe of the brain, it is the center of emotion processing. It helps to configure emotional responses by storing memories, and recollections in turn help to determine the type of response elicited in new situations. Personality is largely determined by one’s reactions to various events, and not surprisingly, the amygdala plays a crucial role in shaping personalities. Scientific research has shown that people with damaged amygdala tend to exhibit a lack of fear and conscious. It also turns out that aside from neurology, evolution also plays an important role in risk. Historically men have been more risk-taking than women. Partial explanation comes from the historical fact that during human evolution, competition for social status and resources was predominantly focused among the males.

To the ordinary, risk takers are more inclined to engage in “dangerous” activities and gain more excitement from completing them. But research shows that they may suffer from boredom and lower job satisfaction. Constrained by the limits of society they reside in, they may also "have a hard time deriving meaning and purpose from everyday life." It is also consequential to recognize that more developed regions tend to foster more of these behaviors. For one, many of these risky activities, from skydiving to mountaineering, are not inexpensive hobbies. Secondly, for more developing societies, more efforts are needed to simply sustain some of the basic necessities, leaving out many opportunities to seek out additional challenges. As a result, a cultural irony develops in that as societies develop more and establish better and sustainably certain living conditions for the people, the more likely it is to indirectly foster uncertainty and risk-seeking.

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