Recent social psychology researches reveal that power has various effects on human cognition and behavior. This paper aims at revealing how a sense of social power affects decision-making under uncertainty. Specifically, the following two elements have been predicted: (1) The individuals with high social power tend to be risk-loving; and (2) those with less power prefer moderate-risk alternatives, rather than being risk-aversive.
To verify these hypotheses, a psychological experiment was conducted in which 86 MBA students participated. To manipulate a sense of social power, participants were asked to recall and write their own personal events. They were also asked to make a choice on a vignette related to an investment decision by a private firm. The participants were told that these two tasks were independent studies with different research purposes. The results support the two aforementioned predictions. Some managerial implications from the findings are also discussed in this paper.