Putting your offices on the penthouse floor of a high-rise tower is a clear signal that your business is riding high figuratively as well as literally. But a new study suggests that while such heights might give you commanding views of the city below, they might also cloud your vision when it comes to risk-taking—the more physically elevated a person is, the more elevated their appetite for risk.
That finding comes from a study published recently in the Journal of Consumer Psychology. A prior study of global hedge funds had found a correlation between a fund’s volatility and how high the firm’s offices were in its building. But that merely proves correlation; researchers attempted to establish causation by conducting some field experiments.
When researchers asked subjects to make financial decisions with both hypothetical and real payoffs, the subjects were more likely to plump for riskier decisions if the experiments were conducted in a more heavenward location. The effects of the elevation were more pronounced when the experiments were conducted near a window, making them more salient to the subjects.
The study’s authors said that higher locations are deeply associated with power. Indeed, companies pay a premium to occupy the top floors, and some workers might well generate better work with their heads literally in the clouds. But the authors argue that industries which involve high-stakes risk-taking—and they mentioned lawyers specifically among those—should perhaps stay closer to the earth.