The role of psychological resilience and positive affect in risky decision‐making

Past studies suggest that positive affect produces a wide range of desirable outcomes because it helps people build lasting resources. It may be assumed that these resources build on positive affect over time, which in turn may explain the beneficial effect of positive affect in stressful encounters. However, this assumption has not been directly tested by empirical studies. This question is important in that it helps clarify the underlying mechanism through which individuals with more positive affect might respond adaptively to adverse situations. Using a stressful task that included 20 rounds of risky investment choices, the current study examined whether psychological resilience, an important personal resource fuelled by positive affect, could account for the beneficial effects of positive affect. Specifically, we examined the relationship between individuals’ baseline levels of positive affect, their levels of psychological resilience, their choices in a risky investment decision task, and their levels of positive affect on the final investment task. The results demonstrate that psychological resilience could indeed help explain happier people's enhanced outcomes: They chose higher return although more risky investment options and experienced more positive affect at the end of the task. The current study supports the notion that individuals who experience frequent positive affect thrive through various challenges not simply because they feel good, but because they have resources that they can utilize to deal with these challenges. Findings from the present study support further investigation of the important relationship between specific positive affect, psychological resilience, and performance in risky investment tasks.