Risky Decision-Making Linked to Sleep Loss

Lack of sleep leads people to make overly optimistic decisions. When those decisions are financial, sleep-deprived people are more likely to engage in risky gambling, according to a new study by Duke University neuroscientists. The study is the first to track the effect of sleep loss on financial decision making.

Using MRI scans to measure brain activity, Duke researchers discovered that the areas of the brain that process positive outcome become more active with loss of sleep while the areas of the brain that process negative outcomes become less active. As a result, study participants over-emphasized potential monetary gain and failed to adequately consider risk factors when making financial decisions. 

The tendency to engage in risky financial behavior was evident after a single night of sleep loss. A good night’s sleep the next night seemed to reset the brain’s behavior-risk assessment ability. However, the tendency to engage in risky financial decision making increased with chronic sleep loss.  

Study leaders said the connection between lack of sleep and poor evaluation of financial risk is a factor in gambling behavior. As late night gamblers become increasingly sleep deprived, the potential reward of gambling increasingly outweighs the potential risk, causing them to gamble more recklessly. The results of the study have interesting implications for high risk and crisis environments, including medicine and defense, where critical decisions must often be made by people who are short on sleep.

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