Why some people take risks and some dont Research Paper

Why some people take risks and some dont - Research Paper Example They establish goals for themselves and started working toward achieving those goals. In the way, if they encounter a risky situation, they tend to take the risk rather than retreating from it because they do not want to compromise upon their plans. However, they undertake risks with a planned strategy so that they are able to mitigate the risks in case they encounter them. Such people are highly motivated. Motivation is one of the key drivers of the tendency to undertake risks. Motivated people cannot feel comfortable if they retreat from entering a risky situation, if that is what it takes to achieve their goal. A very important characteristic feature of the pro-risk people is that they are optimistic. A pessimistic person places too much emphasis over the possibilities of negative outcomes of a risk and thus feels discouraged to undertake it. People generally are not very optimistic about risks. Daniel Kaheman who has won Nobel Prize explained how the fear of loss is bigger for mo st people compared to the happiness of gain in these words, â€Å"For most people, the fear of losing $100 is more intense than the hope of gaining $150. [Amos Tversky and I] concluded from many such observations that ‘losses loom larger than gains’ and that people are loss averse† (Kaheman cited in Halvorson). ... Taking risk is related to self-actualization. Self-actualization sits at the top of the pyramid proposed by Maslow in his motivational theory, and can be described as the realization of the potential in an individual to fulfill themselves and make optimal use of their capabilities (Maslow 150). Why an individual takes a risk is explained by Maslow’s hierarchy of needs theory. Maslow categorized all sorts of needs an individual might have into five basic kinds of needs, namely physiological needs, safety needs, love and belongingness needs, self-esteem needs, and the need of self-actualization (Cherry). Maslow placed these needs on top of each other in the form of a pyramid with the physiological needs forming the base and the need to self-actualize at the top. According to Maslow, an individual does not feel a higher level need unless all lower level needs are satisfied. Hence, a person would only feel the need for love and belongingness if their safety needs are addressed. Ta king this philosophy, an individual only feels the need to self-actualize when all lower level needs have been addressed. Self-actualization is when an individual takes incentives in order to grow and progress, take chances, as well as risks. Describing the attitude and approach of a self-actualized person, (Wilson) says that such people approach life with newness and even appreciate the experiences they have already had treating them as new. In view of the Maslow’s hierarchy of needs theory, people that take risks in any aspect of their life have all their basic needs addressed. This suggests that they are capable of taking risks financially, mentally, emotionally, and physically. There are a range of factors that may stop a person from being adventurous.