Gamblers are more likely to take risks if a high-value reward is up for grabs, a new study has found.

According to research by the University of Warwick, published in Biology Letters, people are 35 per cent less risk-averse if a lucrative prize is on offer.

Dr Elliot Ludvig, who led the study, believes these actions are influenced partly by their memories of previous winning bets.

"Any big wins we've had in the past are memorable and stand out when we are making our decision to gamble again," he commented.

Interestingly, a similar conclusion was drawn in tests on pigeons, as they also used past experiences to inform their future gambling decisions.

Dr Ludvig suggested this could be due to the fact birds are distantly related to humans and have experienced similar evolutionary pressures.

He added that birds and people both seem to share the "same basic psychology that drives risk-taking".

Professor Philip Corr from City University London, a Chartered Psychologist, comments:

"Whereas animals are typically risk seeking when a reward (for example food) is on offer, humans tend to be risk averse when faced with a choice between safe and risky gains. This human risk preference has puzzled psychologists, especially as it often leads to sub-optimal decision making.

"For example, on the stock market, people tend to sell their shares too soon when prices rise as they want to lock-in gains – but it is an established principle among successful stock traders that gains should be left to run, and losses cut short. On the basis of evidence, pigeons would make better stock traders than the average human investor!

"What might account for these different risk profiles? Well, whereas humans are typically presented with described odds, animals have to learn about them through trial and error, so the two situations are different.

"What if human, like animals, had to learn the odds? This study found that ‘information format’ makes all the difference. Pigeons and humans were tested on an odds learning task; both species had to learn about four options: two that led to high-value rewards and two that led to low-value rewards (for each reward level, there was a safe option, a guaranteed fixed reward, and a risky option, 50/50 chance of a better or worse reward). Results showed that both pigeons and humans were less risk averse for the high-value options than the low-value ones – in other words, both species were more motivated by high potential reward.

"The researchers conclude that both species overweight extreme outcomes, which drives risky choice with experienced rewards. This significant ‘cognitive bias’ may account for many forms of ‘win-stay, lose-shift’ decision making previously seen in monkeys. In particular, this bias may help to explain why people’s experience of gambling strengthens their betting behaviour despite the odds not changing -- sometimes, it seems, learning through experience is not a good thing!"

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