IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp17044.html
   My bibliography  Save this paper

Rank, Stress, and Risk: A Conjecture

Author

Listed:
  • Stark, Oded

    (University of Bonn)

  • Wlodarczyk, Julia

    (University of Economics in Katowice)

Abstract

A perception at the core of studies that consider the link between social rank and stress (typically measured by the so-called stress hormone cortisol) is that the link is direct. Examples of such studies are Bartolomucci (2007), Beery and Kaufer (2015), and Koolhaas et al. (2017). A recent and stark representation of this body of work is a study by Smith-Osborne et al. (2023), who state that "social hierarchies directly influence stress status" (Smith-Osborne et al. p. 1537, italics added). In the present paper, we reflect on this "direct" perspective. We conjecture that the link between social rank and stress involves an intervening variable: an indirect relationship arises when the loss of rank triggers a behavioral response in the form of risk taking aimed at regaining rank, and it is the engagement in risk-taking behavior that is the cause of an elevated level of cortisol. Smith-Osborne et al., as well as others whose papers are cited by Smith-Osborne et al. and who, like Creel (2001) and Avitsur et al. (2006), conducted comprehensive research on the association between rank (social standing) and stress, do not refer to risk taking at all. We present four strands of research that lend support to our conjecture: evidence that in response to losing rank, individuals are stressed; evidence that in response to losing rank, individuals resort to risk-taking behavior aimed at regaining their lost rank; evidence that there exists a link between engagement in risky activities or exposure to risk and elevated levels of cortisol; and an analytical perspective on incidence and intensity, namely a perspective that shows how the willingness to take risks responds to a change in rank, specifically, how a loss of rank triggers a greater willingness to take risks and how this trigger is stronger for individuals whose rank is higher.

Suggested Citation

  • Stark, Oded & Wlodarczyk, Julia, 2024. "Rank, Stress, and Risk: A Conjecture," IZA Discussion Papers 17044, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp17044
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp17044.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Stefan Grimm & Martin G. Kocher & Michal Krawczyk & Fabrice Lec, 2021. "Sharing or gambling? On risk attitudes in social contexts," Experimental Economics, Springer;Economic Science Association, vol. 24(4), pages 1075-1104, December.
    2. Christian Grund & Jan Höcker & Stefan Zimmermann, 2013. "Incidence And Consequences Of Risk-Taking Behavior In Tournaments—Evidence From The Nba," Economic Inquiry, Western Economic Association International, vol. 51(2), pages 1489-1501, April.
    3. Oded Stark & Grzegorz Kosiorowski, 2023. "A pure theory of population distribution when preferences are ordinal," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 71(2), pages 317-342, October.
    4. Oded Stark, 2017. "Migration when Social Preferences are Ordinal: Steady-state Population Distribution and Social Welfare," Economica, London School of Economics and Political Science, vol. 84(336), pages 647-666, October.
    5. Stark, Holger & Kosiorowski, Grzegorz, 2023. "A Pure Theory of Population Distribution When Preferences Are Ordinal," IZA Discussion Papers 15923, Institute of Labor Economics (IZA).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Graff, Frederik & Grund, Christian & Harbring, Christine, 2021. "Competing on the Holodeck - The effect of virtual peers and heterogeneity in dynamic tournaments," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 90(C).
    2. Oded STARK & Wiktor Budzinski, 2019. "Repercussions of Negatively Selective Migration for the Behavior of Non-Migrants when Preferences Are Social," JODE - Journal of Demographic Economics, Cambridge University Press, vol. 85(2), pages 165-179, June.
    3. Stark, Oded, 2022. "Risk-laden migration as a response to relative deprivation: A hypothesis," Discussion Papers 329580, University of Bonn, Center for Development Research (ZEF).
    4. Bilancini, Ennio & Boncinelli, Leonardo, 2019. "Wage inequality, labor income taxes, and the notion of social status," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 13, pages 1-35.
    5. Christoph Bühren & Philip J. Steinberg, 2017. "The impact of psychological traits on performance in sequential tournaments: Evidence from a tennis field experiment," MAGKS Papers on Economics 201705, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    6. Shamsuddin, Mrittika & Katsaiti, Marina Selini & El Anshasy, Amany A., 2022. "Income rank and income concerns: What correlates with international migration intentions?," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 490-505.
    7. Ruxanda Berlinschi & Jan Fidrmuc, 2018. "Comfort and Conformity: A Culture-based Theory of Migration," LICOS Discussion Papers 40518, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    8. Lackner, Mario & Stracke, Rudi & Sunde, Uwe & Winter-Ebmer, Rudolf, 2020. "Are competitors forward looking in strategic interactions? Field evidence from multistage tournaments," Journal of Economic Behavior & Organization, Elsevier, vol. 179(C), pages 544-565.
    9. Morgulev, Elia & Azar, Ofer H. & Bar-Eli, Michael, 2019. "Does a “comeback” create momentum in overtime? Analysis of NBA tied games," Journal of Economic Psychology, Elsevier, vol. 75(PB).
    10. Christoph Buehren & Marvin Gabriel, 2021. "Performing best when it matters the most: Evidence from professional handball," MAGKS Papers on Economics 202119, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    11. Stefan Jestl & Mathias Moser & Anna Katharina Raggl, 2021. "Cannot keep up with the Joneses: how relative deprivation pushes internal migration in Austria," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 49(2), pages 210-231, November.
    12. Harald W. Lang, 2016. "You Are Not Alone: Experimental Evidence on Risk Taking When Social Comparisons Matter," Working Papers tax-mpg-rps-2016-12, Max Planck Institute for Tax Law and Public Finance.
    13. Philipp Wegelin & Johannes Orlowski & Helmut M. Dietl, 2022. "The importance of high performing team members in complex team work: Results from quasi‐experiments in professional team sports," Economic Inquiry, Western Economic Association International, vol. 60(3), pages 1296-1310, July.
    14. Ulf Rinne & Hendrik Sonnabend, 2022. "Female workers, male managers: Gender, leadership, and risk‐taking," Southern Economic Journal, John Wiley & Sons, vol. 88(3), pages 906-930, January.
    15. René Böheim & Christoph Freudenthaler & Mario Lackner, 2019. "Do male managers increase risk-taking of female teams? Evidence from the NCAA," Economics working papers 2019-03, Department of Economics, Johannes Kepler University Linz, Austria.
    16. Stark, Holger & Kosiorowski, Grzegorz, 2023. "A Pure Theory of Population Distribution When Preferences Are Ordinal," IZA Discussion Papers 15923, Institute of Labor Economics (IZA).
    17. Christoph Bühren & Stefan Krabel, 2015. "Individual Performance after Success and Failure - A Natural Experiment," MAGKS Papers on Economics 201505, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    18. Bastian Kordyaka & Mario Lackner & Hendrik Sonnabend, 2022. "Can too many cooks spoil the broth? Coordination costs, fatigue, and performance in high‐intensity tasks," Southern Economic Journal, John Wiley & Sons, vol. 88(3), pages 1065-1085, January.
    19. Karol Kempa & Hannes Rusch, 2019. "Dissent, sabotage, and leader behaviour in contests: Evidence from European football," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 40(5), pages 500-514, July.
    20. Do, Truc & Zhang, Huai & Zuo, Luo, 2022. "Rocking the boat: How relative performance evaluation affects corporate risk taking," Journal of Accounting and Economics, Elsevier, vol. 73(1).

    More about this item

    Keywords

    social rank; level of stress; hormonal response; risk-taking behavior; elevated level of cortisol;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D87 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Neuroeconomics
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp17044. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.