Risk propensity, or the degree to which a person is willing to take a chance with respect to possible loss, is viewed as a necessary attribute for successful entrepreneurs. But excessive or unnecessary risk-taking can have negative consequences, potentially leading to financial loss, gambling disorders, legal issues and strained relationships, among other things. 

Using brain scans, a new study has observed a link between connections in the brain and the ability of the person to tolerate economic risk. The paper titled "Amygdala Functional and Structural Connectivity Predicts Individual Risk Tolerance" was published in the journal Neuron on April 5.

Research had linked depression and other affective disorders to connections between two areas of the brain known as the amygdala and the medial prefrontal cortex (mPFC). In the new study, scientists from the University of Pennsylvania also observed individual differences in these structural and functional connections, which in turn, reflected varying degrees of risk propensity.

108 participants were recruited for the study. First, they were asked to answer questionnaires involving 120 different scenarios. The answers were used to classify where the individuals stood on a spectrum ranging from extremely risk-averse to extremely risk-seeking. "We assessed risk tolerance by giving people an opportunity to gamble. We assessed how willing individuals were of accepting the risk of getting nothing for the chance of getting a higher amount of money," said lead author Joseph Kable, an associate professor of psychology at the University of Pennsylvania.

Next, the researchers used MRI (magnetic resonance imaging) and DTI (diffusion tensor imaging) to examine connections between different parts of the brain, specifically the aforementioned amygdala-mPFC system. The size of the amygdala was also measured, including the volume of gray and white matter.

By analyzing the brain structures and the questionnaire data, it was found that participants with a higher tolerance for risk had more gray matter (a larger amygdala) and displayed more functional amygdala-mPFC connectivity than those with a lower tolerance for risk.

"The three measurements — structural and functional connections and the volume of amygdala gray matter — reinforce each other to suggest that there is something important about the function of this system related to differences in how tolerant people are to taking risk," says Kable. "Just by looking at these features of your brain, we could have a reasonable idea if you are someone who will take lots of risk or not."

The researchers expressed the desire to collaborate with financial planning organizations in the future, as they believe these findings can help measure risk tolerance in the face of larger economic-based decisions. "Perhaps we can get a better assessment for someone's economic risk tolerance to provide the best advice possible for that particular individual," says Kable.

But given the early stages of the research, it is too soon to understand whether a system could be designed and implemented with regards to business investments or gambling disorders. "Risk taking is a complex phenomenon that is likely influenced by many factors. It seems like a big leap to go from a lab study to using this technology to inform financial decisions," added Professor Timothy Caulfield, Canada Research Chair in Health Law and Policy, University of Alberta.